The Purpose of Segmentation and Targeting

Market segmentation and targeting^[1] help organizations identify and reach the right audience by dividing the broad market into smaller, more manageable segments and then focusing on the specific groups most likely to respond positively to their offerings.

Understanding Segmentation and Targeting

Market segmentation is the process of dividing a larger market into smaller segments based on shared characteristics, such as demographics, behaviour, or geography. This allows businesses to tailor their products, services, and marketing strategies to meet the specific needs of each segment.

Targeting involves selecting one or more of these segments to focus marketing efforts on. The goal is to reach the most attractive segments that align with the company’s objectives and resources.

Imagine the market as a large pie:

• Segmentation is like slicing this pie into smaller pieces, each representing a different group with specific tastes.
• Targeting is choosing which slice to serve based on who is most likely to enjoy it.

Objectives of Segmentation and Targeting

Segmentation and targeting are used to:

• Improve an organization’s understanding of who their prospective customers are and how to serve them.
• Reduce risk in deciding where, when, how, and to whom a product, service, or brand will be marketed.
• Increase marketing effectiveness by directing effort toward segment(s) in ways that are consistent with that segment’s characteristics.

Media Attributions

• Figure 1: “A Delicious Sliced Fruit Pie” by sold_sha (2021), via Pexels, is used under the Pexels license.