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The Power Of Segmentation

The Power of Segmentation

As a business owner you may ask, “how important is segmentation and should I try to understand it?!”

Segmentation is an important business strategy that should be taken into consideration quite seriously. Organizations must succinctly manage market segmentation strategies and should understand the importance of delivering successful market segmentation. Ensuring that such a strategy has been carried out thoroughly will only impact your organization positively. Segmentation allows businesses to further divide their target market, as a way to easily manage each segment. While creating distinct segments, consumer profiles are also being created through the examination of surveys, and the tracking of websites.

The 4 Types of Market Segmentation

There are 4 types of market segmentation that are used as a form to cluster groups and market any product or service accordingly. Each distinct approach can be used to try and identify the best target market for your product or service. Nonetheless, it is essential as a business that you follow a market segmentation strategy. The four types of market segmentation are:

  1. Geographic: this approach targets customers based on regions.
  2. Demographic: this is one of the most common and simplest approaches that sorts customers according to age, gender, race, ethnicity, education, income, and family size.
  3. Behavioral: this approach organizes the basis of buying patterns of customers like usage frequency, brand loyalty, online behaviors, choices, and product usage.
  4. Psychographic: this approach dives further into the consumers’ psychological aspects of their buying behaviors. In consideration are their lifestyles, interests, values, opinions, personality traits, temperament, etc.

Market Segmentation as a Whole

Segmentation is not a difficult approach to follow or to comprehend; nonetheless, market segmentation is a key approach for organizations to fully understand their consumer base. Organizations should decide whether they will engage in, differentiated (segmented) marketing, undifferentiated (mass) marketing, or concentrated marketing. It is important to select the approach taken, especially when considering the marketing budget for marketing campaigns and materials.

If a technique is to be used out of the three it should be the differentiated approach. This approach tends to appeal to particular market segments. By doing this there are precise marketing campaigns directed to those specific groups.  

Organizations should only choose undifferentiated (mass) marketing if they are looking for less intense research and they are seeking to appeal to a mass market. Which is rather difficult to do unless you are only promoting a product that many most likely already use. Most often this approach is counterproductive, as everything tends to be overgeneralized.

Lastly, an organization should only use a concentrated approach when focusing on only one target market. This approach is ideal when focusing on the promotion and selling of one specific product.

The Benefits of Market Segmentation

Once organizations have a target market, they must use the data that they have in order to — ideally — create appealing and engaging content. Moreover, segmenting customers allows for a smoother and more personalized marketing campaign. ­

As organizations segment their markets according to the necessary categories, they can target those who are actually interested in their product or service. Segmentation forces you to learn more about your customers, by doing this you are better able to serve them through your marketing efforts.

The Challenges of Market Segmentation

Market Segmentation is a very powerful strategy that organizations can utilize, as long as the segmentation is done properly. Most often organizations must have the correct customer data to be able to conclude a significant find. Otherwise, there are various other options that an organization can follow. For instance, an organizations research and development team can most often begin analyzing consumers, otherwise organizations can hire agencies to conduct such research.

Creating a “segment” may sound easy, however, there are many factors that arise when trying to segment consumers. Consumers are not all alike nor do they all follow similar buying patterns. Each consumer is unique, however they are not going to be identical to each other even when put into a segment.  

Once market segmentation is performed and analyzed, a brand can begin their marketing efforts to their segmented customers and approach the ideal target market. Nonetheless, there are still problems that can arise such as sending the wrong message and even losing market share as a result. Segmentation must be treated as an art.


If you are a business seeking to promote your brand accordingly, while obtaining a substantial growth and engagement, Give us a call and let’s grab a cup of coffee and chat!

Also, if you haven’t already, check out our Podcast Palooza Playback blogs. You can find those here.

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