Market segmentation is an incredibly useful analysis method, to better understand a business’s target audience.
Depending on the size and scope of your audience base, it can be very overwhelming to look at them as one, big group. Instead, breaking the overall audience down into more manageable groupings — be that by age, location, need state, etc. — helps a business target and address their interests more effectively.
Market segmentation is essentially the making of smaller sub-groups from your overall audience, based on characteristics such as age, gender, income, or various other defining features that might have an impact on tastes, interests and purchasing behavior.
But don’t be afraid to segment by whatever characteristics work for your product, not just the standard attributes of age, gender, etc. And always be ready to reopen and reevaluate your segmentation down the line — after all, people change!
Market segmentation also allows organizations to more accurately track changes in customer behavior, and improve internal processes based on what particular customers respond well too.
But before you can jump into market segmentation, you need a really clear understanding of who your target audience is.
Defining a target market might seem simple, but it actually requires careful evaluation.
Knowing exactly who you are targeting with your products is vital, as very few businesses are able to offer something for absolutely everyone in the world. What’s more, trying to sell to the widest possible market can be problematic.
Defining your target market involves accepting that you can't please everyone. Instead, you should aim to engage the people who can bring the most value to your venture. Who, specifically, will benefit most from your product or service?