What is market segmentation and what are the types

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One of the ways to make the best use of efforts in a business is to segment the market. Competition is a force that rarely decreases and to remain in profit, some companies expand into related markets.

The practice of segregating the market emerged as a reaction to mass marketing, in which Produced and distributed to all buyers. Segmentation, however, opened up a huge range of specific niches, prepared to meet different tastes and habits. Therefore, it is up to the companies to choose which segment they will adopt.

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What are the types of market segmentation?

The concept of market segmentation is “to divide markets into groups of potential consumers with similar needs and/or characteristics, who are likely to exhibit similar buying behaviour”.

What does this imply?

It means that it is easier to discover what each customer really wants from a product: their personal expectations and desires. This reduces spending on goods that are not suitable for the public and makes it possible to launch more and more specialized items — which contributes for the company to take the lead in the market in question.

Now imagine that you have an accounting education platform. To segment the current and broader market, it is necessary to first think about the variables.

So, ask if all your customers agree with the following reflections:

  • Product

Is it easy to access the platform? Is there a tutorial? Is the support quality? Is the visual identity adequate?

  • Folks

Are you, as an expert, demonstrating competence and authority? Can you deliver humanized and courteous content in class? Do you pay attention to feedbacks?

  • Channel

Is it possible to access classes in different formats (pdf, audio, and video)? Is the platform secure and stable?

Starting from elements present in your business, you can specialize some to please a certain audience. Now, understand how to segment your audience.

Ways to segment the audience

Geographic targeting

Here, you divide your customers by regions: x Northern customers, y Northeast customers, z Southeast customers, etc. Customs and values ​​vary between the states of this very territorial country and respecting local behavior can be a brand’s differential. Also record the number of inhabitants in each region, whether it is a rural or urban area, and also information about the climate, regional dates, among others.

An example of geographic targeting was what McDonald’s did. Brazil is one of the few where the chain offers juice, due to our food preferences.

If your audience is present in all regions — and it probably is, even more so when it comes to a digital business — look for opportunities like these.

Psychographic segmentation

In this segmentation, you must gather data about the style and personality of your customers.

Using the right data collection tools, you’ll understand who’s bolder and who’s more conservative, who values ​​quality over quantity, and so on.

A possible example of this would be what Coca-Cola does with the energy drink Monster. There are several flavours, but note that, while Monster Absolutely Zero has the differential of having minimal calories, Ultra Violet brings flavours and packaging that refer to the 70s. Identify with that time.

Behavioural segmentation

Behavioural segmentation separates customers by the level of knowledge, attitude, brand loyalty status, and so on.

For example, those who sell orange juice tend to think of customers who usually have the attitude of having it for breakfast. One type of segmentation would be for those who drink juice for dinner.

Thinking about our example of the online accounting course: by convention, the competition must supply knowledge about Income Tax well for those who meet the annual income criterion. But what about those who only buy stocks and funds on the stock exchange? It’s another example of segmentation.

Demographic segmentation

In this segmentation, you should have customer groups based on data like these:

  • Age;
  • Genre;
  • Social class;
  • Religion;
  • Income;
  • Educational background.

Market segmentation: advantages and limitations


For all these reasons, we can understand the benefits of segmentation:

  • Greater product suitability

Investing in market research and segmentation brings as a main consequence the possibility of delivering a product, or infoproduct, more personalized and assertive to the customers’ tastes.

  • Identification of market gaps

When doing the research, you may notice another universe. A sub-niche that already existed but was not explored by any other competitor.

  • More proximity to the final consumer

Segmentation helps to plan communication channels that directly reach the defined segments, increasing the identification of these consumers with the brand.

  • Less expenses with campaigns

If you bring a product best suited to the customer who is really interested, you won’t need to guide them through a sales funnel and consume time and money with a complete process.


On the other hand, there are also limitations of this practice, such as:

  • The unpreparedness of the team in dealing with different customers

Do your teams know how to identify and serve customers who, although they are a single business, have such different traits from each other? In the age of user experience, this limitation can be very impactful.

  • Lack of interest in bespoke products 

Consider the possibility that your lead base is simply not interested in such specific products.

  • Search failed

Research and market segmentation is not so common. The testing culture is still not widely applied in entrepreneurship — whether due to lack of technology or lack of knowledge of how to deal with the data collected. Research cannot be limited to age and income, for example, which is a common mistake, and knowing the relationship between cost and return for each segment is essential.

Market segmentation can open up new opportunities for a business, while not everyone has the profile for it. The starting point is to know your audience and, together with your teams, decide if the segments are worth creating.