In the world of marketing, market segmentation is a familiar term. It is because market segmentation greatly influences product sales and its marketing strategy. So it is not surprising that currently, many companies are starting to implement this market segmentation.

What is Market Segmentation?

Market segmentation is a marketing strategy that divides the target market into smaller groups or segments. Segmentation can be split based on demographics, needs, priorities, interests, behaviors, etc. Through this market segmentation, you can better understand the targeted consumer group.

Market segmentation also helps companies answer customer needs, manage products, and minimize production errors. Thus, customers will feel more satisfied with the products and services provided.

Market segmentation is also closely related to implementing marketing and sales strategies. It can help you determine the right marketing strategy to reach customers. Moreover, each segment has different needs and marketing methods.

Market Segmentation Goals

Even though the primary purpose of market segmentation is to improve marketing efficiency by focusing on specific segments. But there are many other goals that you should know about. Here are some brief explanations:

1. Better Service

Market segmentation provides better service to customers. It can help you understand customer needs. Thus, you can give the best solution. In addition, good service is also proof that you can communicate products well to customers.

2. Designing More Suitable Products and Services

Market segmentation will help you in understanding the market demand. It allows you to design products and services according to these needs and desires. In other words, market segmentation has the purpose of assisting you in creating the right solution.

3. Optimal Utilization of Resources

Segmenting the market means providing details of the target market and their needs. It can assist the production team in producing products that meet customer needs so that there will be no waste of resources.

4. Effective Planning

The next goal of market segmentation is to make adequate plans. It can happen because you have specialized in the market and have detailed information about the target market’s needs. Therefore, the marketing strategy planning process can run more effectively.

5. Easier to Make Changes in the Market

Market conditions are dynamic because human desires are constantly changing. It is not surprising that updating product and marketing strategies must continue to be carried out. It can be done more quickly if the market is segmented. Because you have identified and analyzed customer needs, the change steps you take can be more efficient and organized.

Market Segmentation Terms

In conducting market segmentation efforts, certain conditions must be complied with. The following are some of the market segmentation requirements needed by every company.

1. Measurable

The requirements for segmentation are measurable. It means you have to have quantifiable data about customer profiles. This requirement is essential because it will determine the campaign or advertising process for the market. It would help to estimate how many customers will buy the product. Thus, you can calculate product stock to meet market needs.

2. Easy Access

Customers should be able to access information about the product quickly. These benchmarks will help you determine an advertising strategy that reaches the right target market. Thus, the ads you place can be more profitable.

Suppose you find that your main product segment relies heavily on newspaper advertisements to find out product promotions while another component uses mobile applications to get product information. So you need to prepare two different advertising media to reach these two segments.

3. Distinguishable

When segmenting the market, you can distinguish each segment clearly and precisely. Each part has different characteristics—for example, segments that are differentiated by age, gender, or lifestyle.

4. Substantial

You must ensure that your market segment is interested in your product and can buy it because the market segment must be able to benefit your business.

So you don’t have to be fixated on looking for large market segmentation. The most important thing is to make sure that the segmentation is willing to spend money on your product.

If your market segmentation can reach a large number of customers, you will likely sell products at low prices. For this reason, make sure you can choose the proper market segmentation.

5. Can be Implemented

The last requirement for market segmentation is to be implemented or followed up. It means you have to make sure that each of these segments can get the best service. The market segment must also be adjusted to the reach of your business.

Basic Market Segmentation

After knowing the goals, benefits, and requirements of market segmentation, you also have to know what are the things that form the basis of market segmentation. Here is the explanation:

1. Gender

It is one of the most straightforward market segmentation bases because gender will determine women’s and men’s different interests, needs, and desires. So, you will be more focused on marketing and communication strategies that match the data.

2. Age Group

The basis for the following market segmentation is the age group. By dividing customers based on specific age groups, you can create a personalized marketing strategy. Especially if the products offered cannot be used by all age groups.

3. Income

Income is substantial because it can determine the purchasing power of the target market. Each individual will be grouped into segments according to their income. Companies will usually divide market segments based on income into three categories, namely:

  • High Income Group
  • Middle Income Group
  • Low Income Group

4. Residence

The place of residence of the target market is also a factor that can influence purchasing decisions. A person’s needs will differ depending on where they live. For example, the demand for warm clothes will undoubtedly be less in the tropics than in cold areas.

5. Profession

Work is one of the basics of market segmentation that can influence customer decisions in buying something because the needs of each worker will, of course, be different. For example, entrepreneurs will prefer to purchase formal clothes than semi-formal clothes.

6. Lifestyle

In addition to these various factors, lifestyle is the basis of market segmentation that must be considered. The lifestyle itself includes hobbies, interests to marital status. All of these things can be taken into account in making decisions.


What is market segmentation?

-Market segmentation is a strategy carried out by companies to divide consumer groups into several categories, such as different needs, characteristics, and behaviors in a particular market.

What are the reasons why companies do market segmentation?

-One of the reasons a company does market segmentation is to increase the effectiveness of the planned marketing strategy and be more focused. The company’s resources can also be used effectively and efficiently.

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