What is market segmentation?

Market segmentation is the process of dividing a market into distinct sub-groups based on various characteristics such as demographics, psychographics, geography, or behavior. This approach allows marketers to tailor their strategies and offerings to meet the specific needs and preferences of different segments, ultimately leading to more effective marketing efforts.

By focusing on specific segments, businesses can design targeted marketing campaigns that resonate more with potential customers, improving engagement and conversion rates. For example, a company may segment its market by age, thereby creating different messages for children, teenagers, and adults, which increases the relevance of their marketing initiatives.

Other choices refer to different aspects of market analysis but do not define market segmentation itself. Analyzing market trends involves looking at how a market shifts over time, studying consumer purchasing habits examines individual behavior without grouping them into segments, and evaluating market opportunities assesses potential growth areas but does not involve dividing the market into sub-groups. These processes are vital for comprehensive market understanding but are distinct from the segmentation process.