Importance of Market Segmentation1

Why is Market Segmentation Important?

Market Segmentation Guide

Understand customers’ needs & deliver a best-in-class experience.


Table of Contents

To grow your business it should resonate with your target audience’s needs. This means it is important that your message target the right audience. Creating imprecise marketing campaigns will reach lots of people who aren’t a good fit for your offerings. 

Tailoring your marketing efforts is important to target the right audience, boost brand perception, and also grow ROI. This is where market segmentation fits into the puzzle. In this blog, we will focus on why market segmentation is important. 

What is Market Segmentation?

Market segmentation refers to the categorization of the target population into groups or segments based on shared characteristics. It helps you to determine exactly what messaging will drive customers to make purchases. 

Market segmentation also allows businesses to manage their time and money, among other resources, in a better way. When you segment the consumers, you can identify which consumers are most likely to make a purchase and which are not. This allows you to focus marketing efforts on the most valuable customers, reducing the number of resources spent on marketing.

Get started today. Request a free 15 min product consultation call.

The Importance of Market Segmentation

The data collected using market segmentation helps marketers personalize the campaigns. This also helps you to utilize their time & resource efficiently. You can avoid offering products and services that would never interest the audience. Thus saving brands from running unsuccessful campaigns and wasting their resource. 

Market segmentation offers a suite of advantages some of which we have mentioned below: 

Create appealing marketing campaigns: 

Segmenting your target market can help you discover opportunities to create personalized campaigns. 

The data enables you to understand the needs, preferences, and reasons for customer behavior. This way you can build strategies that market towards the need of different segments instead of a one-size-fits-all. 

Serving customers better:

With a better understanding of your customers, you can focus on tailoring efforts that satisfy a particular segment of customers. You deliver the right product/ service/ content to the right audience making their journey with you smooth thus facilitating satisfaction. 

Effective use of time & resources: 

Running 1 or 2 targeted campaigns is better than aiming at a broad population with a one-size-fits-all campaign. It helps you create effective strategies that target the right segment and resonates with their needs. Thus saving time and resources from offering products and services your customers don’t want. 

Designing products: 

Having knowledge of each segment can help design better products. Your brand can design a product that matches the demand and needs of each segment. Products with high market potential can be personalized and targeted to cater to the specific target market. 


[Related read: How to Segment the Market for a New Product in 5 Steps]

Start creating targeted segments with our market segmentation survey template.

Types of Market Segmentation

Importance of Market Segmentation2

Geographic Market Segmentation

Geographic segmentation involves segmenting consumers based on geographic location such as by county or by city. Divisions can be made in terms of:

  • City
  • Country
  • State
  • College
  • Region 
  • Area, etc.

Demographic Market Segmentation

Demographic segmentation involves segmenting consumers based on demographic information as mentioned below:

  • Age
  • Gender
  • Education
  • Income
  • Religion
  • Race

Behavioral Market Segmentation

Behavioral segmentation involves segmenting consumers based on behavioral traits such as loyalty and spending habits. This method of segmentation groups consumers in the following ways:

  • Occasion-Oriented 
  • Benefit-Oriented 
  • Usage-Oriented 
  • Loyalty-Oriented 

Psychographic Market Segmentation

Psychographic segmentation involves segmenting consumers based on psychological traits. It helps in gaining a better understanding of customers’ purchase intent. 

  • Social Status
  • Activities, Interests, and Opinions
  • Lifestyle
  • Hobbies
  • Personality
  • Attitudes
  • Values

[Related Read: Ultimate Guide to Market Segmentation]

Market Research toolkit to start your market research surveys and studies.

Benefits of Each Type of Market Segmentation

Benefits of Geographic Segmentation

  • It facilitates appealing to a market based on language and culture, among other geographic characteristics, which allows you to tailor marketing strategies that effectively target local consumers.
  • Geographic market segmentation gives your brand a competitive edge in new localized markets and helps provide better customer service in these markets as well. 
  • You can create niche-specific campaigns to appeal to the local taste and purchase behavior and grow your market by getting in touch with the local market tendencies.

Benefits of Demographic Segmentation

  • As government censuses are available in most countries, this method of segmentation is relatively easy to employ.
  • It helps effectively identify a target market as demographic segmentation focuses on who is most likely to buy a product.
  • Knowing the demographic category of customers can help you avoid offering them products or services they don’t like or will never like. 

Benefits of Behavioral Segmentation

  • Helps to understand consumer needs on a granular level by focusing on the behavior displayed by consumers.
  • Uncover the reason behind customers’ purchase tendencies. 
  • You can create personalized promotions, discounts, price structures, and products that drive customers’ purchase behavior. 
  • Can build brand loyalty in like-minded consumers.

Benefits of Psychographic Segmentation

  • Is more effective than geographic or demographic segmentation as it provides details about factors such as interests, activities, and values.
  • Is a useful method of segmentation especially when the customization of products is involved.
  • You can tailor to their needs and show that your brand truly cares for them, thus creating brand awareness and brand loyalty. 


Summing Up;

Market segmentation makes planning marketing efforts easier. It helps you to concentrate on a particular group instead of targeting a wide market. It uncovers the key factors about who your target audience is and how to sell to the right audience. 

Market segmentation helps you make data-driven decisions to perfect your efforts, identify marketing opportunities and efficiently use resources. If you want to learn more about how you can create targeted segments and cater to their needs, contact us. 


Psychographic segmentation tries to understand consumers’ lifestyle and their key values. Behavioral segmentation, on the other hand, focuses on customer behavior, such as their purchasing habits. 

The goal of market segmentation is to help businesses understand distinct groups of consumers that make up their market. By grouping people with similar characteristics and attributes, marketers can effectively target the segments that are most valuable to their business.

Buyer persona, also known as customer persona, is a fictional character created to represent key traits and characteristics of a sizable segment of an organization’s target audience.

Read more

Violin Plot

Violin Plot SHARE THE ARTICLE ON Table of Contents A violin plot is a combination between a box plot and a kernel density plot that

Read More »
Shopping Basket
Great Research
Fast Insights
Best-in-class ROI

Voxco’s platform helps you gather omnichannel feedback, measure sentiment, uncover insights and act on them.

Join 500 + global clients across 40+ countries

Great Research
Fast Insights
Best-in-class ROI

Voxco’s platform helps you gather omnichannel feedback, measure sentiment, uncover insights and act on them.

Join 500 + global clients across 40+ countries