fbpx

Know what is Market Segmentation

Know what is Market Segmentation header
/

In the business world, you are certainly no stranger to market segmentation. This is because market segmentation has a big influence on selling products or services and implementing the right marketing strategy for your business. But what is market segmentation? Is it really that important for a business? We will discuss it in full in this article!


Quick View

What is Market Segmentation?

market segmentation writing surrounded by various writings of a segmentation

Market segmentation is a marketing strategy that divides the target market into a segmentation group, such as based on characteristics, needs, behavior, and purchasing power so that companies are able to recognize consumers better.

By implementing this market segmentation, companies can find out customer needs, manage products, and minimize failures in marketing the products or services offered. This will make it easier for companies to find the right customers for their business. It is expected that businesses can provide optimal results and have high effectiveness in marketing, so that consumers are more satisfied with the products and services provided.

Importance of Market Segmentation for Your Business

The application of market segmentation is not without reason, but there are several benefits if you apply this marketing strategy to your business.

  • Communicating directly with consumers that match your product or service segmentation, it can strengthen the marketing message
  • Market segmentation helps you to know and understand consumer characteristics. That way you can implement the right marketing strategy
  • Knowing the right marketing strategy for your business, this will help your business attract consumers who want to buy the products or services that your business offers
  • Facilitate financial management, especially for the allocation of business marketing funds
  • Grouping consumers by applying market segmentation can make you provide the best service to them. Therefore, your business branding will increase
  • Increase sales
  • You will more easily understand the needs of consumers, especially on the lack of products or services that your business offers. So that you can develop your business better in the future. That way, you can also build consumer loyalty to your business.

Types of Market Segmentation

As a businessman, there are at least 5 types of market segmentation that you need to know. Here’s the discussion!

types of market segmentation

Behavioral Segmentation

Behavioral segmentation focuses on consumer habits in buying the products or services offered. These habits or behaviors are usually grouped based on behavior towards the products or services offered, attitudes, knowledge, responses, and consumer loyalty. This segmentation tends to consumer decision making, it allows you to develop a more targeted marketing strategy because of knowing the personal habits of consumers.

Psychological Segmentation

This segmentation usually focuses on the personality of the customer. It is measured by hobbies, interests, lifestyle, and also social status. This requires you to do more in-depth research on consumers. By knowing these consumer personas, you can adapt the right marketing strategy to suit their tastes.

Demographic Segmentation

This type of segmentation further details consumer personas, such as age, income, gender, and others. This is the most common type of segmentation used for marketing strategies and can be combined with other types of segmentation to narrow down the target market.

Geographic Segmentation

As the name, this segmentation groups the target market based on the location of the consumer. It should be noted that the needs of consumers in each location will vary depending on the surrounding conditions and the weather, for example. The application of this strategy is especially important for small businesses, as you can tailor advertising and marketing strategies that are more specific to consumers.

Price Segmentation

And the last is price segmentation, this is no less important for business people. Knowing the economic strength of consumers can be your benchmark in pricing your business products or services. This is very important, so that the products or services offered are sold to the target market.

How to determine Market Segmentation

Knowing what market segmentation is isn’t enough, right? You should also know how to determine the right market segmentation for your business. Here we will discuss!

a woman telling a man how to define market segmentation

Define target market

Determination of this target market must be in accordance with the needs of your business. You should pay attention to these 3 types of target market:

  • New Consumer, this is a new and important consumer determination for businesses that are just starting out.
  • Focused Consumers, these consumers are consumers that your business already has but are focused on becoming loyal consumers.
  • Supported Consumer, this consumer refers to the supporting products or services that your business offers.

Determination of this target market can refer to the segmentation that has been previously described, such as demographics, nutrition, and consumer attitudes towards the products being sold.

Find out consumer problems and needs

Customize your business products or services based on customer problems and needs. You can do this by conducting a market survey. Knowing this, you can classify the problems, needs, and wants of consumers. This is useful in order to improve the quality of your business products or services.

Understand consumer behavior

Observing and analyzing consumer behavior can be done by paying attention to how consumers respond before and after buying your business product or service. Also keep in mind, each product or service has its own trend, so make sure to always follow this trend so that your business doesn’t lose out to competitors.

Analysis of the data obtained

After all the data you need is collected, process all the data that you have observed. By processing this data, you will find out whether your product or service is selling well or not in the market. In addition, data analysis is also a determinant of the right marketing strategy for your business.

Define business marketing strategy

After choosing the market segmentation to use, of course the strategies applied will be different. So, adjust the target market with the strategy you will use!

For example, refer to demographic segmentation: What types of drinks are suitable for consumers who are in locations with hot weather.

Evaluate the strategies that have been carried out

If you have implemented a marketing strategy, you need to know the response from consumers regarding the products or services you offer them. This way you will know the shortcomings of the business and can evaluate regularly to get the expected sales.


Market segmentation needs to be done for your business, this is important in order to know whether the marketing strategy you have implemented is effective and optimal for the target market. Besides that, each marketing campaign requires a different segmentation analysis in order for the marketing campaign to be successful. If you are still confused in determining market segmentation, you can consult SATUVISION. We know exactly what marketing strategy your business needs!

Let’s Work Together!

Let's connect with us and get a free quote.

SATUVISION is a full-service digital agency in Bali providing digital marketing, advertising, web development, SEO and creative services.

2022 PT. Media Group Asia. All rights reserved.