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What is Segmentation? Types of market segments

The Marketing industry certainly does not know about Segmentation. It refers to the way a business uses to divide its customers into small groups. Each of those small groups, every customer has a common trait. So what is Segmentation ? What benefits does it bring to the business? Let's find out in the article below!

What is Segmentation?

Market Segmentation is understood as market segmentation. This is a way for store owners to separate visitors into different groups . This way, they can create their own experiences based on customer characteristics, behaviors, needs, and wants.

What is Marketing Segmentation and How You Can Create One

What is Segmentation?

Businesses that use market segmentation in their marketing plan are often more effective. Also, market segmentation, also known as customer segmentation. It is a great way to help users get this experience.

Each brand, business in reality does business and has different characteristics. Therefore, they also have ways of aggregating data and dividing customers into completely separate segments.

What are the benefits of Segmentation?

What are the benefits of Segmentation? With the above information, then Segmentation will have the following benefits:

Save time and money

For a business in the business field, it is extremely necessary to spend a large amount of money on marketing activities. However, with that amount of money, how much revenue the strategy brings to the business is the problem. If you have not learned carefully about each customer group, the implementation of a marketing campaign will not be effective. From there, leading to undesirable results is both time consuming and costly. Therefore, it is necessary to constantly update information to learn about  your potential customers. To make marketing campaigns more effective.

Data analytics in customer segmentation(P.2) - Big Data Uni

Save costs when learning market segments

Build good relationship with customers

When searching for potential customers and segmenting the market, businesses will understand customers better. From there grasp their needs and build a good relationship with them. Good relationships are often maintained for a long time, giving businesses the opportunity to have loyal customers.

What is Segmentation?  4 Types of Customer Segmentation that administrators need to understand

Build relationships with customers

Identify advantages and opportunities for businesses

When reaching  potential customers through advertising campaigns, businesses rely on the effectiveness of the campaign to determine which parts are effective and which need improvement. To enhance the competitive advantage of the brand. This is also the time when businesses have to look at market segments. As well as its advantages and disadvantages to improve for future marketing programs.

Types of Segmentation

Market Segmentation is an increasingly important part of a strong marketing strategy and can make all the difference for companies in a competitive market landscape , such as commerce. electronic.

When facing many online competitors, effective communication is the best way to set your business apart. Market segmentation offers the opportunity to pinpoint exactly what messages will drive your customers to buy.

The four basic types of market segmentation are:

  1. Demographic
  2. Mentality
  3. Geography
  4. Behavior

The purpose of market segmentation  is to identify different groups of your target audience so that you can deliver more targeted and valuable messages to them.

There are four main customer segmentation models   that should form the focus of any marketing plan.

For example, the four types of segments are Demographic, Psychogeographic, and Behavioral. These are common examples of how businesses can segment their market by gender, age, lifestyle, etc.

Let's explore what each of them means for your business.

1. Demographic segment:  People

Demographic segmentation  is probably the first thing people think of when they hear 'market segmentation'. This is probably the simplest way to identify customer groups, but it is still very effective. Demographic segmentation looks at identifiable non-characteristics such as:

  • Grow old
  • Sex
  • Ethnic
  • Earnings = earnings
  • Educational level
  • Religion
  • Occupation/role in a company

Eg. Demographic segments can target potential customers based on their income, so your marketing budget isn't wasted directing your message to people who can't afford to buy products. your product.

Luxury goods manufacturer  Montblanc worked with Yieldify  to feature a range of offers on their website. One person managed to increase conversions using a Father's Day deal that gives free gifts to those who spend over £200 - an amount that acknowledges Montblanc's target audience's spending expectations and sees an increase up to 118% conversion for targeted people.

Another offer that specifically targets corporate gift buyers – a market segment that Montblanc is particularly appealing to – and resulted in a +30% increase in that segment.

Segmentation isn't just about your business reaching customers more effectively – it's also about those customers seeing the message more relevant to them!

2. Psychographic Segmentation:  Why

Psychographic segmentation focuses on the customer's personality and preferences. Here, we can review customers and identify them by:

  • Personality traits
  • Interest
  • Life goals
  • Value
  • Faith
  • Style of life

Compared to demographic segmentation, this can be a more difficult set to identify. Good research is vital, and when done well, psychosegmentation can allow for extremely effective marketing that consumers will feel talking to them on a much more personal level.

For example, in our experience working with luxury resort company Omni Hotels & Resorts, we are aware that a large segment of the company's target audience always wants to get the best price. that they can. By targeting the message campaign specifically to comparison shoppers, Omni Hotels & Resorts achieved a 39% increase in conversion rates.

3. Geographic Segmentation:  Where

By comparison,  geographic segmentation  is often one of the easiest ways to identify and group customers in relation to their physical locations. This can be defined in any of the following ways:

  • nation
  • Area
  • City
  • ZIP code

For example, it might be possible to group customers within a certain radius of a certain location – a great option for  marketers of live events  looking to reach a local audience. Being aware of your customer's location allows you to consider all sorts of things when advertising to consumers.

Using Yieldify's tools, an online shoe store can display different products depending on where the customer visits: rural wellington boots, sidewalk-friendly walking shoes summer for city dwellers, sandals for resort guests, etc.!

Customer segmentation based on geography

In large countries like the United States, customers may be offered options tailored to local weather patterns. Geography is an important part of  seasonal segmentation  , allowing businesses to market products that match the season to customers.

Some recent examples of niche geosegmentation have come from e-commerce businesses' response to  the coronavirus pandemic  . During periods of lockdown, many businesses turn their focus to local communities to highlight how their services can still be accessed online.

In contrast, as public spaces begin to reopen, pure e-commerce brands must change their marketing plans to maintain the level of business they saw during the shutdown.

4. Behavioral Segmentation:  How

Behavioral segmentation  is perhaps most useful for e-commerce businesses. As with psychosegmentation, it requires a little data to be really effective – but much of this can be gathered through your own website. Here, we group customers related to:

  • Spending habits
  • Buying habits
  • Browsing habits
  • Interacting with the brand
  • Brand Loyalty
  • Feedback on previous products

Finnews: Segmenting customer behavior

All of these are data sets that may be collected from your use of the website. At Yieldify, we  use behavioral segmentation  to deliver   highly relevant and targeted campaigns based on several behavioral patterns:

  • Sessions to your site
  • Number  of pages visited
  • Time spent on site
  • Visited URLs
  • Types of pages visited
  • Cart Value
  • Campaign history
  • Reference source
  • Exit intention
  • Inactivity and more.

For example, we can distinguish between a first-time visitor and someone who has visited your website many times but has not made a purchase. Based on this behavioral data, we can tailor our messages accordingly:

First time visitor:  Hey, check out our latest collection!
Returning guests:  Join our loyalty program and start saving!

Working with  the online wine club Vinomofo  , we used behavioral segmentation to target three distinct audiences: new, returning, and returning customers.

Vinomofo behavior segment example | Customer segment

One of the best examples of this type of segmentation is showing new visitors a $15 incentive in exchange for joining the community. Returning visitors who signed up but hadn't redeemed the coupon were reminded of their first order offer. While old customers have seen the campaign about Vinomofo's premium  services .

This targeted approach focused on buying habits saw a 34.02% increase in conversion rate with new CR lift and 29.24% with returning visitors!


If you are oriented to pursue Marketing, then the concept of Segmentation is an essential element that cannot be ignored. Let's grasp it carefully to have the most successful strategies for yourself!