What does customer segmentation involve?

Customer segmentation involves dividing a target market into groups based on shared characteristics. This process allows businesses to tailor their marketing strategies and product offerings to meet the specific needs of different segments, thereby increasing effectiveness and efficiency.

Segmentation can be based on various factors, including demographics, psychographics, behavioral patterns, and geographic attributes. By understanding the unique preferences and behaviors of distinct groups, companies can create more personalized and relevant marketing messages, enhance customer satisfaction, and drive higher engagement and loyalty.

This approach differs significantly from simply dividing a market based on geographic factors alone or assessing competitors' strategies and marketing expenditures, both of which do not fully encapsulate the comprehensive nature of customer segmentation. Therefore, the focus on grouping customers with similar attributes provides the most accurate understanding of what customer segmentation truly involves.