Definition, Purposes, and Benefits of Market Segmentation

Market segmentation is a very important aspect of business and provides many benefits for the company. However, do you know what market segmentation is and its goals and benefits? Check out the article below.

What is Market Segmentation?

Market segmentation is the division of a market into distinct groups of buyers who have different needs, characteristics, or behaviours. Effective market segmentation must be measurable, attainable, profitable, distinguishable, and enforceable. This method is carried out by certain companies, businesses, or agencies so that it can facilitate the marketing process. Through company market segmentation, businesses or agencies are able to identify consumer groups and can identify the right target consumers. That way, consumers will be more satisfied with the products or services provided by the company, business, or agency.

Purposes of Market Segmentation

After knowing what market segmentation is, also know its purposes, they are:

1. Identifying Business Competitors

Business competitors are competitors in businesses that offer similar products or services and target the same market. When you know which segment to choose, also know who and how many competitors are in it. This is to determine the right marketing strategy and study, imitate or evaluate various marketing tactics in attracting customer interest.

2. Improving Service for the Better

After knowing the market segmentation for the business, the company can implement the best and most suitable service.

3. Increasing the Effectiveness of Marketing Strategy

Marketing strategy is a strategy used by companies on an ongoing basis to win the market competition. The purpose of market segmentation is also to increase the effectiveness of marketing strategies. That way, knowledge of target consumers and the marketing process will be much more focused, on promotion, production, distribution and others.

4. Make It Easier to Differentiate the Market

By doing market segmentation, businesses will more easily understand the needs and interests of consumers. So the market will be easier to distinguish from other market groups.

5. To Evaluate and Plan the Business

Evaluation is a planned activity to measure and assess the success of a business. Market segmentation is also intended as material for evaluation and business planning. Because the company will more easily understand and learn the marketing strategies that have been carried out, and they can make good and smart business plans in the future.

Benefits of Market Segmentation

Market segmentation has a very important role for businesses because of the various benefits it provides. The following are the benefits of market segmentation:

1. Helping to meet consumer needs.

2. Increasing consumer attractiveness.

3. Making it easier to manage the products or services offered.

4. Helping focus on certain target consumer groups.

5. Opening up great opportunities for business growth.

6. Helping better and focused marketing.

7. Easier to manage finances.

8. Increase competitiveness.

9. Help to get market segmentation.

10. Gain a favourable position.

11. Increase business profits.

12. Retain more customers.

13. Designing advertisements according to the target market.

14. Developing an effective marketing strategy.

15. Better response rate.

16. Improving brand loyalty.

17. Differentiating brands.

18. Improving business branding.

19. Developing better products.


Those are explanations of the meaning, purpose, and benefits of market segmentation. From this explanation, it can be concluded that market segmentation is very helpful for companies to reach appropriate and appropriate target consumers based on certain groupings. I hope this helps.

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