What is "market segmentation"?

Market segmentation refers to the process of dividing a larger target market into smaller, more defined categories to better meet the needs and wants of specific groups of consumers. This approach allows marketers to tailor their products, services, and marketing strategies to the preferences and behaviors of different segments, resulting in more effective marketing and higher customer satisfaction. By understanding distinct consumer characteristics, such as demographics, psychographics, geographic locations, or behavior, businesses can create targeted campaigns that resonate with each segment, ultimately leading to increased sales and brand loyalty.

Focusing on specific market segments helps organizations allocate resources more efficiently and develop products that are more likely to fulfill the needs of those segments. This tailored approach is crucial in today's competitive marketplace, where consumers expect personalized experiences.