What is the purpose of market segmentation?

Market segmentation involves dividing a target market into distinct groups of consumers who share similar characteristics, needs, or behaviors. This process allows businesses to better understand their customer base and tailor their marketing strategies to specific segments. By identifying and characterizing these groups, companies can create more targeted and effective marketing campaigns that resonate with each segment's unique preferences and demands.

For example, by segmenting the market based on demographics, psychographics, geographic location, or buying behavior, a company can optimize its product offerings, promotional messages, and overall marketing approach, ultimately leading to a more efficient allocation of resources and increased customer satisfaction. Thus, the purpose of market segmentation is primarily to organize the market into defined groups that can be strategically targeted, enhancing the chances of meeting customer needs and driving business success.