What is Market Segmentation, Types and Complete Examples

Rancakmedia.com – Check out this full review of what market segmentation is, from the definition of types and examples that you should know, and to get the information, read the article below.

Market segmentation is one method of satisfying your target market, not everyone needs your product, so you have to target some individuals who clearly need your product to get customers.

You can narrow your target audience to individuals who are most likely to become loyal customers or fans of your brand's content through market segmentation. If you're trying to segment, divide the market into subsets of comparable quality.

What is Market Segmentation?

Market segmentation is the practice of dividing the target market into smaller groups with more defined characteristics. The target market itself is a group of customers who are the target of the product offering.

This method divides potential customers or audience into smaller groups based on things such as interests, demographics, geographic location, or other unspecified requirements or wants. Segmentation

Benefits of Market Segmentation

Company segmentation has a number of benefits and objectives. Here's an explanation:

More Targeted Marketing Strategy

Marketing plans become more targeted once you identify the customers you want to target. You'll be able to figure out what type of marketing will work best for that demographic, as well as the language to use and the media to use. Advertising on social media makes it easy to determine the intended audience for your ad.

Optimization and Cost Efficiency

When marketing efforts are more concentrated, expenses can be reduced. Due to the potential for significant revenue from high sales, marketing spending becomes more ideal and efficient.

Since most of the people who read your ad do not need the goods offered, your prospects for attracting customers are significantly reduced if the ad has clear segments.

Easier to Manage Products

Segmentation provides companies with more in-depth information about customers. When we know the target audience better, we can also make goods according to what the audience wants.

Products tailored to specific market groups are another option for businesses. As a result, customers will be more likely to be satisfied as a result.

Creating Market Opportunities

The next step in market segmentation is to identify and develop new markets. When defining segments, the organization will learn about the demands of each segment based on existing competitive products.

Businesses will be able to gauge how satisfied their customers are with the current state of affairs using this information. Low satisfaction with existing goods on the market is an opportunity for new companies.

Instead of competing with lesser home cleaning services that only offer a few choices, you might come up with a more comprehensive service that will catch the attention of customers.

Get to Know Your Customers Better

Knowing your customers better is another advantage. If you want to build goods that suit your clients, a company must be able to put itself in the customer's perspective.

A solid understanding of the needs and wants of its customers is essential for any business. The chances of a marketing campaign failing are reduced thanks to this level of knowledge.

A successful campaign with a low chance of failure, as said earlier, will undoubtedly reduce marketing costs.

Increasing Customer Satisfaction

The greater the consumer's happiness, the better the product. Customer happiness is undoubtedly one of the main goals of the company. This can be achieved by marketing to selected target segments.

Maintaining Customers

The greater the level of customer satisfaction, the more likely the client is to consider buying the product again in the future. This segmentation can be claimed to be able to retain customers and gain loyal customers.

It is also possible that this customer will be interested in trying additional items from the same company or recommending the brand to people around him.

Terms of Effective Market Segmentation

There are various conditions that must be considered for a segment to be successful. Here are some examples:

Must be Measurable

Segmentation can only be successful if it is assessable. Market size and consumer purchasing power are some of the metrics used. For example, one of your company's segments is a "promo hunter", meaning they will shop when you offer promotions in the form of discounts, cash back, or other promos.


Understanding the demands of a segment is not enough; you also have to think about how to reach them. Customer attributes and behavior can be used to determine which approach is most effective.

There are customers who are easier to contact through social media or e-mail, and there are also those who can only be reached through mass media such as television or radio.

Big Enough (Substantial)

The purpose of segmentation is to classify customers into smaller groups. However, a segment must be large enough to serve as a target market. Of course, the smaller the group, the lower the probability of attracting customers.


The same marketing mix will elicit various responses from different market segments. If both segments respond in the same way, they must stay together as one segment.


A segment must be actionable or serviceable by business personnel. Of course, if the segment has wants or expectations that exceed the company's capabilities, the transaction will fail.

Types of Market Segmentation and Examples

There are several forms of market segmentation. An example of each type follows:

Geographic Segmentation

This particular segmentation is perhaps considered one of the oldest and most basic. Generally, people who live in one place tend to have different shopping patterns from other areas. People in towns and villages, for example, exhibit a wide variety of behaviors.

In metropolitan areas, lifestyle goods have a very large market, but in rural areas, they tend to be less attractive. Another example is in the banking sector, where banks provide various types of savings specifically for rural areas.

Demographic Segmentation

Age, gender, income, occupation, family status, and education are some of the most used characteristics in demographic segmentation.

Teenagers, adults, and the elderly are examples of market segmentation based on age. Students, housewives, business women, farmers, and office workers are examples of jobs that fall into the broad categories of “male” or “female”.

Apart from that, you can also divide it depending on the amount of income, for example income below 5 million rupiahs per month, income 5-10 million rupiahs per month, and income above 10 million rupiahs per month. A person's purchasing power will definitely be greatly influenced by this income.

One segment can consist of many separate variables. For example, skin care products aimed at young women with a household income of under 5 million rupiah are aimed at this market.

Psychographic Segmentation

In this kind of consumer segmentation, customers are divided into groups based on various psychological characteristics such as their way of life, personality traits and personal preferences. Due to its ambiguous character, demographic segmentation is said to be more difficult than this one.

Even so, do not rule out the possibility of using it. If the segment is done correctly, business people still have the possibility of making significant money.

Psychological segmentation includes things like marketing pet food to animal lovers or gym memberships to athletes.

Behavioral Segmentation

Segmenting the market according to the level of product knowledge, attitude and their actual use is what we mean by this segmentation.

This is a good way to find out who is most likely to buy, how much they will buy, and when they will buy it.

An airline, for example, can differentiate between business and leisure passengers.

Benefit Segmentation

Generally, customer behavior depends more on the benefits sought in a product than on demographic considerations. Every customer wants something different from their purchase, and that's understandable given the competitive nature of the market.

For example, while some soap customers are more interested in the scent and texture of the soap, others are more concerned with soap that cleans well.

It is recommended to capitalize on the current segment when using this segment, and then build a new segment next. It may be that a company needs many product alternatives to provide all the benefits that customers demand.

Stages in Market Segmentation

There are various procedures to follow to develop the right segmentation for your organization. Following are the steps that you must follow:

Take a Survey

The first thing to do is to do some research to get to know your customers better. Conducting surveys through interviews or by distributing questionnaires is one option.

To make group formation easier, general survey questions may be followed by more specific questions. The purpose of conducting a survey is to find out people's motivations and attitudes towards a product or service.

Determine the Type of Segmentation

The second step that must be completed is to choose the type of segmentation you want. Do you want to segment your customers by demographic, regional, psychographic, behavioral, or something else?

Create Market Segmentation

The next step that can be taken is to develop market segmentation based on the data received from the first stage.

You can use statistical tools to create segments from the raw data, or you can analyze the data yourself. Later, the company will have various segment groups to market.

Perform a Segmentation Test

The next step is to see if the segment can be put to good use in the company and deliver the expected results.

If the segment is not related to the product and does not bring in sales, it indicates that an assessment must be made and the segment must be developed based on other criteria.


Below is an example of a question and answer about what market segmentation is, as follows:

Why is the Most Selected Demographic Variable in Making Market Segmentation?

Many companies use demographic information as a basis for segmentation because of various benefits. The first thing to note is that most of the wants and demands of customers can be classified according to their respective demographics. This means that partitioning the market based on demographic factors is the most common practice.

How Companies Do Market Segmentation?

Market segmentation is the target or target customers who will become buyers of the goods you provide. The way to determine this market segment is to classify the goods to be offered, and modify them according to the interests, similarities and demands of customers.


Segmentation market is the practice of breaking down a target market into smaller groups with more defined characteristics, such as interests, demographics, geographic location, or other unspecified requirements or wants. Company segmentation has a number of advantages and goals that make marketing more precise and targeted.

That's information about what market segmentation is that we can convey, I hope it's easy for you to understand!

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