What is market segmentation?

Market segmentation is the division of a market into segments with distinct and identical characteristics.
Based on the characteristics and needs, the objects are classified into a group to help businesses easily
research and meet the needs of customers better.

Enterprises cannot meet all the needs of each customer, but can only offer policies for a group of
customers. The same target market, but different businesses can have different ways of segmenting the
market. There are many ways to segment the market, but the type of segmentation is commonly used
by businesses based on customer characteristics. Market segmented by consumer income: high-income
customers, low- and medium-income customers. Some businesses also divide into VIP customers,
regular customers, new and potential customers.

Benefits of market segmentation for businesses

Customers often do not agree on product needs, so businesses cannot meet each person individually.
Market segmentation helps businesses save effort and time as well as budget.

Objects grouped into a market segment have many similarities in characteristics and needs, so the
implementation of marketing strategies is also faster and more effective. By narrowing the research
object, businesses have more accurate information and data related to customers.

Besides, departments also easily manage and track their customers. Each department should be
assigned to focus on a certain audience to serve its customers satisfied with the service the business
provides.

In addition, when implementing market segmentation in the marketing strategy, enterprises also
identify their strengths and weaknesses. From there, give appropriate strategies into each segment to
achieve the best effect, be able to compete with competitors and find potential customers.

Market Segment includes 4 types: geographical division (region, region), social factors, customer
behavior and psychological factors.

Distribution according to regional geography

Based on the characteristics of the region, the enterprise segmented the market such as mountainous
areas, plains, rural areas or cities. If businesses move to the international market, they can segment by
region and continent. Usually, communities in an area often have quite similar characteristics, so it is
easier and more convenient to do market research by geographical location.
For example, a fashion brand when implementing a marketing strategy will research each region to
determine where there is the most potential for growth. People in the north have different fashion and
style of dress than people in the south, and partly because of the different weather.

Through the characteristics of each region, businesses will develop and implement more effective
strategies. The competitiveness between businesses in the same area is extremely high, so businesses
need to research and implement a reasonable plan.