Market Segmentation Strategy & How to Create It

No one denies the significance of marketing segmentations and it does offer a lot of benefits like; niche-focused, high profitability, reallocation of budget, and higher customer engagement. Today, we’ll discuss the main steps and elements of market segmentation strategy; and how to create market segmentation.

What is Market Segmentation? 

Before jumping into the discussion of market segmentation strategy; it’s important to briefly define what it is. Marketing segmentation is the process of dividing the large target customer population into smaller groups and categories based on their traits, preferences, interests, and needs. All of your target customers are unique by having different preferences and needs. You can’t simply offer one solution for everyone. Marketing segmentations allow you to develop personalized and customized content specifically designed for your customers to meet their needs.

The top four main types of market segmentation are as follows;

  • Geographic Segmentations: dividing the market based on regional needs and geographic boundaries like region, elevation, climate, and cities
  • Demographic Segmentations: segmenting the market based on factors like; religion, income, job, occupation, family size, education level, marital status, gender, and age
  • Psychographic Segmentations: dividing based on factors like motivator, temperaments, opinions, lifestyles, interests, personalities, and values
  • Behavioral Segmentations: it follows the basis of the buying process and decision-making of the person like knowledge of the product, brand perception

Market Segmentation Strategy – Steps 

If you’re wondering why you need market segmentation; a plan or a strategy allows you to reach your destination in the most effective and efficient way. It’s important to mention here that there is no such thing as static; you have to keep on revising your markets segments;

Periodically During the Year

If you study your markets and develop market segments in the summer or spring; the same segments would have different traits at different times of the year.

For instance, there are various holidays in the winter and the Christmas season has a great impact on families. The holiday season influences the purchasing habits of your market segments like; where they would go for trips and tours, and how they’re going to behave in terms of shopping and spending. When you have such information, then you can prepare and predict for such a period.


Markets segments keep on changing throughout the year. It’s because the external factors impact customers and their responses and behaviors.

For instance, global warming is causing natural disasters, and it is influencing whether families should live in such area that is prone to the occurrence of such events. If your target customers are relocating away from your sales region, then you move your sales activities to such region that is more populated.

Rapid Changes Time

The recent pandemic crisis has compelled businesses and companies to reconsider and revise their business strategies that how they’re going to sell their products to customers. Brick and mortar physical stores are shifting the business to e-commerce and online stores; hotels and restaurants are offering drive-through service.

The marketing segmentations should change according to the change in customers. Therefore, you should clearly know the needs, wishes, and wants of your target customers.

Some of the main areas that you should consider while developing and updating the market segmentation strategy are as follows;

Recognize the Change

Determine what has been changing from one time to another and the main driving force that is causing changes. When you know the reason why your markets are different, then you can make the right decision about whether you should change your strategy or stay on track.

Start Planning, Don’t Wait

Businesses and companies are always following long-term trends; and the research on marketing segmentations would allow you to make the right changes at the right time. After developing the market segments, it’s important to keep in mind the risk factors and complications of every segment, and have got a plan if problems arise.

What to Why

Why the driving forces are coming; and why the risks are linked with the target markets. You should partner up with companies to comprehend why different areas of the target markets drive success or slow. It helps you to make a smart marketing segmentations strategy that is actionable and predictive.

How to Make Market Segmentation 

Some of the main steps on how to make market segmentation are as follows;

Markets Defining

You should know the need for your product or service in the market; and whether your target market is big or small. Most importantly, you should know the position of your company in the market.

Segmenting Markets

You should decide what types of segmentations you’re employing for your market division like behavioral, psychographic, demographic, or geographic. It doesn’t mean that you should choose only one type, it’s better to use all in combination. You should keep on experimenting and choose the best strategy.

Understanding Markets

It’s better to start by conducting the markets research through polls, focus group studies, or surveys. You should ask relevant and precise questions to your target audience; and use a combination of quantitative and qualitative question formats.

Customer Segments

You should the reaction and response of your target customers; and what types of market segments are relevant to your company.

Testing Marketing Strategy

After analyzing the response of your target audience; you should test your result on your target market, and keep tracking its effectiveness. If the result is not good, then you should revise your research method and your markets segments.

Conclusion: Market Segmentation Strategy & How to Create It 

After an in-depth study of what is market segmentation strategy and how to make market segmentation; we have realized that it’s significant to have a strategy and a plan. If you’re developing one, then you should follow and practice the abovementioned tips and guidelines.

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