Market segmentation is the process of dividing a broad consumer or business market into subsets of consumers who have common needs, characteristics, or behaviours. It allows companies to target specific groups with tailored products and messages.

Common bases for segmentation include demographic (age, gender, income), geographic (region, climate), psychographic (lifestyle, values), and behavioural (usage rate, loyalty). Effective segmentation produces groups that are measurable, accessible, substantial, and actionable. It is a foundational step in marketing strategy.

Key points

• Dividing a market into subsets
• Based on common needs or traits
• Includes demographic, geographic, psychographic, behavioural
• Foundation of targeting and positioning