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4 types of market segmentation and how to use them in your business

Targeting your product and service to the right market using the right message is absolutely critical, particularly when trying to reach customers with a marketing message or ad campaign.

If you aim too broadly without priorly analysing which market segmentation is the right fit for your message, it may still reach your target audience but keep in mind that it will also reach a lot of people who aren't interested in your products or services.

Market segmentation can help you target only the people who are most likely to become satisfied customers or enthusiastic content consumers. A market is segmented when it is divided into groups with comparable features. A segment can be based on one or more qualities. This method of segmenting an audience enables more precise marketing and customised information.

Market segmentation is the process of identifying a target market or group of individuals. Additionally, market segmentation could be also categorised as customer segmentation which is the process of dividing an existing customer base into several segments. While the research design, data collection, and analytic methodologies are all identical, they concentrate on distinct elements of segmentation.

There are four most common market segmentation techniques that you can already start implementing in your business. You can also create your own niche segmentations once you have understood and grasped the essence of the list of market segmentations below.


People with comparable features are assumed to have similar living patterns, tastes, and interests, which will influence their shopping habits. To build target populations with the highest possibility of buying their products, demographics are frequently combined with other segmentation tactics.

Demographics include factors like age, gender, occupation, income, and education. Surveys are one way to collect demographic information and may consist of these questions:

  1. What is your age?

  2. How many children do you have?

  3. Are you married/divorced/single?

  4. How many members are in your household?

  5. What is your nationality/race?

  6. Do you own or rent your home?

  7. What is your household income?

  8. In what zip code is your primary residence?

  9. What gender do you identify as?

  10. What is your highest level of education?

The advantage of demographic segmentation is that it is easy to collect. You can utilize demographics for your customer segmentation after implementing demographics analyses for market segmentation. You can identify the following using demographics and behaviours:

  1. How big is the size of the market where your target audience resides?

  2. How does their brand stack up against the competition?

  3. Which groups of people are most likely to purchase our product or service?

  4. Which advertising campaigns will have the most impact on their target audience?

When paired with behavioural features and other criteria, demographic segmentation can help companies better identify which customers within their target market are likely to buy items and how to reach them with the relevant marketing messages.


You can also categorize your market based on the habits of your customers, particularly when it comes to your goods.

You can build messaging that caters to the actions of your audience by segmenting them depending on their activities. Many of the behaviours you might examine have to do with how people connect with your product, website, app, or brand.

Behavioural segmentation analyses include:

1. You should look at a user's online shopping habits across all sites, since this may indicate how likely they are to make an online purchase on your site.

2. You can categorize users depending on their usage rate. Depending on whether someone is a heavy user, a medium user, a light user, or a non-user of your product, your messaging will be different.

3. Users' behaviours on a website can be tracked to learn more about how they engage with your online businesses. You might look at how long people remain on your site, whether they read articles all the way through, what kinds of information they click on, and other factors.

4. Customers frequently acquire brand loyalty after using a product for a period of time. Customers can be classified based on how loyal they are to your brand, and your marketing can be tailored accordingly.

Behavioural data is valuable since it directly connects to how people interact with your brand or products. As a result, you may be able to promote them more successfully.


Psychographic segmentation is similar to demographic segmentation, but it focuses on mental and emotional traits. These characteristics may not be as visible as demographics, but they can provide vital insight into the motivations, preferences, and demands of your target audience.

If you see that members of a demographic segment react to your material differently, you might wish to include some psychographic data. While demographics provide basic information about your target audience, psychographics provides insight into why people choose to buy or not buy your product, click on or ignore your ad and interact with you in other ways.

This information can be gathered in many of the same methods as demographic information. You can use surveys to ask your current consumers for this information. You can also look at how visitors interact with your website and what types of material they engage with to get a better understanding of their interests and preferences. You can also use second-party and third-party data to enhance your first-party data.


Geographic segmentation can take many forms. The most fundamental is identifying users based on their geographic locations, such as their nation, state, county, and zip code.

Consumers can also be identified based on the characteristics of their locality, such as climate, population density, and whether the region is urban, suburban, or rural. Because one county may contain rural, suburban, and urban areas, identifying features may necessitate more specificity.

Depending on the region you're targeting, you may need to adjust the language of your messaging. People from different countries may have a variety of hobbies. Baseball, for example, is extremely popular in the United States, although cricket is more popular in India. If you're selling sports equipment or writing articles about sports, you'll want to consider these distinct preferences.

If you need to target an ad to people in a specific area, such as if you're advertising a small local business, segmenting a market by location is crucial. It's particularly important if you're targeting a large area because it allows you to adjust your messaging to regional variances in language, interests, norms, and other characteristics, as well as people's various demands.

The advantages of having market segmentation

  • Enhances your campaign effectiveness

Market segmentation can help you increase the effectiveness of your marketing campaigns by allowing you to target the appropriate individuals at the right time with the correct message. You may use segmentation to learn more about your audience and personalize your messaging to their tastes and needs.

It is far more beneficial to target a specific section that is likely to be interested in your content or product rather than a large audience. If you advertise to the entire market, you will spend a lot of money on commercials, but only a small number of people will convert. Instead, target your marketing to a segment with the correct traits, and your campaign's conversion rate will skyrocket.

  • Gains a clear product development map

Market segmentation can also assist businesses in developing products that better fulfil their customers' needs. You can produce different items geared to different segments of your consumer base and create products to appeal to the needs of your key market segment.

Assume you manage an automobile manufacturer with a primary target market of middle-class families. To accommodate a family with many children, you would most likely design your automobile with plenty of seating, legroom, and space. You'd also make vehicles in the mid-price bracket.

  • Reveals potential growth areas

Market segmentation can also assist organizations in identifying audience categories that they are currently missing out on with their marketing efforts and then expanding into new areas.

You can discover interests that you didn't realize your consumers had when you look at your audience statistics. For example, a company's sales may be mostly made in physical stores. They might notice that many of their customers choose to shop online based on behavioural data. They might then either build an online store or increase the advertising of their online marketplace based on this information.

  • Strengthens business concentration

Market segmentation can also assist firms in concentrating their efforts, allowing them to build a brand identity and specialize in a specific product category. In their marketing, a brand that strives to appeal to everyone would come off as generic and unmemorable. It may also cause clients to be unsure of what the brand stands for and what type of business it represents. A company that tries to sell everything, on the other hand, is unlikely to make a significant effect in any one market, and its offers may be of lesser quality than those of companies that specialize. You can expand your offerings as your company expands, but it might be difficult to identify yourself when you're just starting out if your product options are too broad.

Market segmentation can also assist businesses in determining the best distribution tactics for their goods. Some people, for example, prefer to shop online while others prefer to shop at a store. Companies can also choose which stores to pitch their products to based on the shopping habits of their target market.

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