With innovative ideas, they can make their brand stand out and engage their audience better. An excellent example of market segmentation is the banking business, which includes companies such as Wells Fargo – Get Free Report and JP Morgan Chase – Get Free Report. Both are giant banks with a diverse range of goods that need market segmentation to be effectively marketed. JP Morgan Chase would not likely sell 401s or IRAs to college-aged consumers; instead, banks may target a year-old audience, or even older residents. This allows companies to create targeted marketing messages that are more likely to resound with specific segments of the population, leading to increased sales and revenue. Reaching these points is essential for any successful marketing campaign.

market segmentation theory

If you have anything in your mind that I can add, feel free to comment. It takes solid strategies to make it profitable as well as guest-centric. And when they are provided with guests’ segments, they get a clear picture of how they can up their sales; rather than relying on a generic pricing model. When you segment your guests, you get a clear picture of what their preferences are. Meaning, with demographic segmentation, you will be able to target these guests more efficiently. Hotel demographic segmentation is based on traits like age, gender, ethnicity, income, religion, family makeup, education, etc.

This segmentation is slightly more difficult to identify as it is subjective and it requires a lot of research to figure out. Here are some of the top benefits of leveraging market segmentation in the hospitality industry. Are to reduce the risk of marketing to an audience who may not be interested in your services or products. It also works to increase your marketing efficiency by reaching out to the right audience in a consistent manner.

Witness a significant boost in revenue

Production of these garments are mostly outsourced which are intended for daily occasion. The main aim is to connect the high end market to the mass market. Busniness Model is a representation of an organization in the fashion market which is based on different plans to fulfill their objectives and strategic goals.

  • Residing place or location of the consumer is a very powerful tool in market segmentation.
  • For example, you make water purifiers – so you address the problem of contaminated water quality.
  • This segmentation is slightly more difficult to identify as it is subjective and it requires a lot of research to figure out.

The term “Segmentation” indicates the process of dividing a large unit into smaller units. The process of dividing a broad target market into more defined smaller units or categories is known as Market Segmentation. When you have data of people from a different location, you can better understand that people from which region are more likely to accept your hotel. Designing your services and products according to the requirements of your customers will help increase your sales and also keep your customers satisfied and happy. It also makes customers feel like you understand their requirements and this can improve your brand’s reputation.

How do you get started with segmentation?

When you target specific segments that are more likely to show interest in your products or content, it’s more effective than trying to target a larger audience. You may end up spending too much money on marketing and advertisements, and only a few may convert. Directing your market to the right segment will help increase your conversion rate considerably. When you have proper market segments, you can create your product offerings based on those segments. For example, women versus men or low-income versus high-income groups.

market segmentation theory

Since, it allows you to adjust your messaging to regional changes in language, interests, norms, and other characteristics, as well as people’s various demands in different places. Demographic-based on age, gender, income, occupation, education, and nationality. By skipping the motions, you save on resources and use them where they are needed the most. Also, since your target’s needs are aligned with your product offering, the customer acquisition cost is low.


Guest Mr Jeff has visited your property several times in the past. And you have noticed that he only visits when there’s an offer going on. So, you can drop him lines routinely, suggesting personalized offers and making targeted recommendations based on the input. Not to mention, it also plays a crucial role in behavioural segmentation.

market segmentation theory

Pricing your product much lower than your competitor might fetch you immediate benefits but will be detrimental to revenue in the long run. You can segment the audience based on geography, demography, behaviour, or psychography, but ideally, a mix of all four can help you achieve clearly differentiated segments. The more segmentation layers or variables you add, the more delineated your segments would be. We can study about various customer group and their level of satisfaction from the current offerings. Customers dissatisfaction can be observed in case of gaps and organization can take this as an opportunity to improve products and fill gaps to meet consumer requirements.

Step 1: Define your market

Generally divide their market into more health-conscious consumers ready to pay a premium for organic or naturally-sourced food goods and groceries. Thus, they are more likely to respond positively to marketing messages that are sewer to their needs. Behavioral data is valuable since it directly what does noi stand for connects to how people engage with your brand or products. By segmenting your audience based on the behaviors they show, you can build messaging that responds to those patterns. Many of the activities you may consider are related to how people connect with your product, website, app, or brand.

You also discover that approximately 80% of the people in your chosen demographic are lactose intolerant. Segmenting the audience into smaller groups based on specific attributes gives you better clarity on who benefits the most out of your product and how. With this clarity, you can make your messages more focused and relevant to target groups.

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Knowing which audience segments to target comes from having all-around visibility of those segments in one place. This makes comparing segments and weighing the pros and cons of targeting some segments over others easier. A closer look at this formula tells us that the product positioning for each target segment is different. The above scenario is an apt use case for the segmentation, targeting, and positioning model of marketing. Now that we have some context, let’s dive deeper into what the segmentation, targeting, and positioning model is. The garments produced in this segment are of right value for money.

Brands can use market segmentation to help decide on the right pricing that will maximize their sales and also keep their customers happy. Businesses can look at demographic information like income levels to decide on the proper pricing of their products. You may also look at how pricing can affect purchase decisions and change them accordingly. Businesses can also look at festive and seasonal demand changes to roll out special offers and deals to boost their sales during a specific time. To perform audience segmentation, you first need to know about your audience. You can enrich this with first-party data from other platforms like social media, websites, customer forums, etc.


Check out Marketing Cloud and related products here to find the right solution that can help your marketing team ace their STP game. The message you use for these two segments is obviously going to be different from each other. Using tools like Data Studio, you can further segment the above two segments into groups that already use a competitor product and those that don’t. The company’s resources – budget and employees – get spread too thinly in chasing far-flung customer segments.

A male and a female would have varied interests and liking towards different products. A school kid would have a different requirement than an office goer. Market Segmentation helps the marketers https://1investing.in/ to bring together individuals with similar choices and interests on a common platform. Yet, good marketing segmentation initiatives may boost a company’s long-term profitability and health.