Target Market Segmentation Basics

No matter how great a product or service is, you’ll need to find its target market in order to succeed. That’s where market segmentation comes in. This important strategy allows sellers to identify their ideal existing and future customers and to reach them with the right marketing messages and products. In this guide, we’ll review the basics of market segmentation and how it can help you find your target audience.


Basic demographics, such as age, income level, and educational status are some of the most important data points to gather on potential and existing customers. Demographic segmentation is an easy way to carve up a target market, and it’s the foundation of any good marketing initiative.

Geographic Segmentation

A person’s geographic location can significantly change the way they interact with your company. By learning where your target market lives, you can tailor marketing efforts to their local methods and values.

Psychographic Market Segmentation

Some of the best but most subtle marketing insights can come from this type of research. Surveys are particularly useful, as they allow business owners to classify customers based on their opinions, values, habits, and attitudes. Psychographic segmentation helps small business owners decipher the otherwise mysterious elements of the consumer decision-making process.

Behavioral Classification

This kind of market research shows how consumers interact with a company’s products and services. For instance, how often do your customers buy from you, and from where do they make those purchases? Position your efforts differently for those who use your products out of necessity compared to those who only buy them occasionally.

Reaching Your Target Audience With Market Segmentation

The above market segmentation types can be quite useful in various business efforts, including product development, marketing campaigns, and customer support and experience initiatives. Here are two ways this strategy may help your small business.

  • Market research. When you interview prospective customers, it provides a segmentation opportunity. For instance, if you send a questionnaire to a diverse group, adding a demographics section will help you understand why a product appeals to certain groups, who you may want to focus a marketing effort on, and the problems you’ll need to solve in order to succeed. Segmentation is a useful strategy in branding, product development, and concept testing.
  • Customer satisfaction. Whether you’re dealing with business or individual customers, not everyone will have the same experience with your company. Adding segmentation questions to post-purchase surveys simplifies the process of detecting issues and resolving them.

Market segmentation is not limited to the above scenarios. The most important thing is to think about how you’ll segment the target market before asking any questions.

The Takeaway

It’s impossible to please everyone, and business owners can’t be all things to all people. With these basic market segmentation concepts, you can feel more confident as you define the company’s target market and adjust your marketing strategies accordingly.