The market segmentation definition is the right starting point to quickly and accurately understand the meaning of the market segmentation topic. In general, the definition creates a common ground for concepts and terminology related to the topic so that you can go to understand the entire topic on a correct basis easily.
Market segmentation refers to a marketing strategy that divides prospective customers into groups according to specific criteria, such as everyday needs or specific income levels, to help target customers achieve the best return on investment.
This is the complete and ideal marketing segmentation definition. Because it contains all the important terms related to the market segmentation process, we will discuss each term within this definition in the remainder of this article. Then it will be apparent to you why we called it the complete and perfect definition of market segmentation. Let’s go
Table of Contents
Market segmentation definition parts details
Marketing strategy:
The marketing strategy refers to the overall plan to reach prospective customers and get the best possible return on investment by selling your product and services to them.
This means that market segmentation is one of the ways (or strategies) to reach customers quickly and efficiently to achieve the best return from them. This is the first benefit of defining market segmentation.
Divided prospective customers into groups
In the previous part of the definition, we knew that market segmentation could reach customers.
This part shows us how market segmentation works: Market segmentation works by dividing prospective customers into specific groups. So that each group can be targeted individually and more effectively
You cannot do everything for everyone. Your resources will not help you. That’s why you need to define a specific group of customers whom you can serve well.
Specific criteria
This part of the definition explains how to target customers are divided into groups. Prospective customers are divide depending on specific factors that collocate these customers together into groups.
This part of the definition explains how your target customers are divided into groups. Prospective customers are divided based on specific factors that bring these customers together in a homogeneous way.
Here are some examples of these criteria or factors:
- Geographic factors: These factors divide customers according to their geographic location as region or area.
- Demographic factors: These factors divide customers according to their age, gender, family size, income, or life cycle.
You can read Market Segmentation by Income for more details
- Psychographic factors: These factors divide customers according to their social class, lifestyle, or personality
- Behavior factors: these factors divide customers according to their benefit from the product or services, use of product or services, or response to the market promotions.
These are the most important factors and elements in which market segmentation relies on its work.
To help to target the customers and achieves the best return on investment
The last part shows the goal of the market segmentation process “Help to target customers and achieves the best return on investment.”
You cannot do everything for everyone. Your resources will not help you. Even if you can provide a service to a large number and variety of people, this service will be of bad quality. Then, in a short time, competitors in the market will overcome you.
Therefore, market segmentation aims to focus and direct resources in a specific direction so that competitors can easily overcome through this process.
In other words, Market segmentation allows you to increase the business efficiency by focusing limited resources to produce the best return on investment (ROI).
Market segmentation definition importance
By analyzing the market segmentation definition in the previous paragraphs, we see how great the benefit can get from just starting to understand the definition.
The definition clarifies the overall picture of the market segmentation to go deeper and study in more detail if you want. The definition represents such a tree of knowledge of the market segmentation topic.
The market segmentation definition is one or two short sentences. So, through understanding them, you can shorten a lot of time and effort in research and analysis about the topic.
A person who doesn’t start with understanding the definition will be lost and will find it challenging to understand the topic.
That is a sample of the importance of studying market segmentation definition as an input to the topic.
Other market segmentation definitions
There are many other definitions of market segmentation. Taking into account that all these definitions aim to describe the process of segmentation, but from a different perspective
In the following paragraphs, we will show you some of them:
- The process of the divide of the market into different homogeneous groups of customers. (By quickmba.com)
- The process of identifying specific customers within a broad marketplace (By yourbusiness.com)
- The process of dividing a heterogeneous market into relatively more homogenous segments based on certain parameters. (By Wikipedia)
These are some of the different definitions of market segmentation, and you may encounter several of them while you are going around the Internet. As previously mentioned, they all aim to describe the process of market segmentation, but from a different perspective.
Because of this difference and the great diversity of definitions, this article provided the best definitions of market segmentation, which describes this process in its entirety without shortening in simple and easy words.
Conclusion
The definition is the correct starting point for understanding the meaning of the market segmentation topic.
A person who doesn’t start with the definition will be losing time and effort in research and analysis. And finally will find it’s challenging to understand the topic.
Market segmentation refers to a marketing strategy that divides prospective customers into groups according to specific criteria, such as everyday needs or specific income levels, to help target customers achieve the best return on investment.
In the market segmentation definition, the term “marketing strategy” refers to the overall plan for reaching your prospective consumers and getting the best possible investment return.
The part “Dived prospective customers into groups” shows how market segmentation works.
The “Specific criteria” term shows how to target customers are divided into groups—these criteria such as age, gender, income, etc.
The last part, “To facilitate targeted and achieve the best return,” shows the goal or the aim of market segmentation.
Finally, The market segmentation definition clarifies the overall picture of market segmentation. So after understanding the definition, you can, if you want, go deeper and study in more detail.
References: Marketing
