Market Segmentation. Types and benefits

Market segmentation is the marketing term that refers to grouping potential buyers into groups or segments with everyday needs that respond similarly to a marketing action.

7 Benefits of market segmentation

Market segmentation offers several advantages to developing your marketing strategies. For example:

1. Create more vital messages

You can develop more solid marketing messages when your company has defined the buyer persona. This way, you will avoid generic and “vague” language aimed at a broad audience. Instead, you can use direct messages that talk about your target audience’s unique needs, wants, and characteristics.

2. Identify the most effective marketing tactics

Knowing what will appeal to the ideal audience can be tricky with various marketing tactics available. Using different types of market segmentation guides the marketing strategies that will work best. So when you know your target audience, you can determine the best solutions and methods to reach them.

3. Design hyper-targeted ads

With digital advertising services, you can target audiences by age, location, shopping habits, interests, etc. When you use market segmentation to define your audience, you need to know these detailed features and use them to create more effective and targeted digital advertising campaigns.

4. Attract (and convert) quality leads

When marketing messages are clear, direct, and targeted to the right audience, they attract the right people. By attracting users within your buyer persona, you will be more likely to convert them into buyers.

5. Differentiate your brand from the competition

Being more specific in the value propositions and messages you emit also allows you to differentiate yourself from the competition. Instead of mixing with other brands, you can determine your brand by focusing on customers’ specific needs and characteristics.

6. Build a deeper connection with the customer

When you know what customers want and need, you can offer and communicate offers that uniquely serve and resonate. This distinct value and message builds stronger bonds between brands and customers and creates a lasting brand affinity.

7.- Identify niche market opportunities

A niche market is a segment that encompasses specific characteristics and is often neglected. When the target market is segmented, underserved market niches can be found for which new products and services can be developed.


Although there are many ways to create a good market segmentation, some of the most used segmentation characteristics can be divided into these four types.

1 Demographic segmentation

Demographic segmentation is one of the most popular and utilized types of market segmentation. It refers to statistical data about a group of people.

  • Age
  • Sex
  • Revenue
  • Nationality
  • Occupation
  • Marital status

This data type is easy to collect because it is observable or easily accessible through surveys and customer interactions.

While B2C companies may find personal trait tracking more beneficial, B2B businesses typically look for features based on the company or organization. This type of market segmentation is also known as firmographic segmentation. Key demographic traits include

  • Industry
  • Company size
  • Number of employees

2. Psychographic segmentation

Psychographic segmentation classifies audiences and customers by factors related to their personality. These factors are more challenging to identify than demographic factors because they are subjective. They are not data-centric and require research to discover and understand.

  • Personality traits
  • Values
  • Attitudes
  • Interests
  • Lifestyles
  • Psychological influences
  • Subconscious and conscious beliefs
  • Motivations
  • Priorities

3. Behavioral targeting

While demographic and psychographic segmentation focuses on who the customer is, behavioral segmentation focuses on how the customer acts. It requires knowing your customers’ actions, as these activities may be related to how a customer interacts with your brand or with other activities that occur outside of it.

  • Rate of use: the user is frequent or infrequent
  • Shopping habits
  • Brand awareness
  • Knowledge of the product or service
  • Purchase history

4. Geo-targeting

When used proactively, geographic segments can be studied to answer the following questions:

  • Where do my clients usually come from?
  • Which branch is performing best?
  • What are the traits associated with a particular geographic location?
  • What place-specific messages should I use to appeal to local audiences?
  • Is marketing different between the city and rural areas of the same country?
  • What is the best type of media to appeal to local audiences?

How do we create a market segmentation strategy?

To create an optimal market segmentation strategy for your business, you can follow these steps:

1. Analyze your current customers

If you already have customers, start your market segmentation process by performing an analysis of your audience. This analysis lets you know your customers and start identifying trends in your current customer base.

2. Create the buyer persona and Customer Journey

Once you’ve analyzed your audience, you’ll know your current customers. Use your data to create a buyer persona describing the exact customer you’d like to attract.

A buyer persona is a semi-fictitious description of the ideal customer. It allows you to visualize the person the brand is trying to attract and know who you want to work with, making it easier for you to find the right opportunities for the market segment.

3. Identify market segment opportunities.

Once we have a buyer persona that describes the ideal customer, we must start looking for opportunities in market segments.

A market segment opportunity is a trend that can drive new marketing tactics or offerings. To find them, you must first ask yourself questions about your brand.

What problems does your brand solve?

What problems can you solve better than your competitors?

What do you know a lot about, or what do you excel at?

Who would you like to focus on for you and your team?

4. Research your potential segment

Before launching a marketing campaign for a new market segment, you must check that this is a good option. Research should be done to see what competition exists and whether the public is interested in your new market.

Research the competition.

If there is interest in the market, investigate to see what competition is already present and analyze them to get as much information as possible about them.

What kind of service or product do they offer, and what can they be better or worse than yours?

How do customers acquire?

Do you use digital marketing?

What marketing strategies work?


Using market segmentation to create better marketing campaigns helps your brand be clear about its audience and goals. You can get to know your audience, see how to serve best and reach them, and find new markets to grow.

Do you need to have better market segmentation to reach the ideal customers? Our digital marketing team can help you. Contact them without obligation!

About the author
Andrew Smith

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