Market segmentation aims to identify target consumer groups in order to tailor products and branding in a way that is attractive to this group.
Markets can be segmented in several ways, such as geographic, demographic or behavioral.
Market segmentation helps companies minimize risk by identifying which products are most likely to earn a target market share, as well as the best ways to promote and bring those products to market.
By minimizing risk and increasing clarity around marketing and product delivery, a company can then focus its resources on efforts that are likely to be most profitable.
Market segmentation can also increase a company’s demographic reach and help it discover products or services it may not have previously considered.