Benefits of Segmentation

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Benefits of Segmentation

Segmentation is an important aspect of marketing in the contemporary world. Here, a company divides its market into various portions, depending on the needs and other factors such as physical location. These factors lead to a variety of segmentation types, including, demographic segmentation, geographic segmentation, psychographic segmentation, and behavioral segmentation. Philip Kotler, an American professor is popular for his knowledge and experience in marketing and segmentation. Therefore, this essay on segmentation will largely draw from Kotler’s ideas in explaining the importance of segmentation to both the consumer and the company.

Segmentation is the dividing of the market into specific parts depending on different variables. This is mainly to boost effective marketing and sales. Depending on the variables used, segmentation is divided into various types. In demographic segmentation, the market is divided according to variables such as education, religion, income, social status, occupation, nationality, family size, gender, and age. The main advantage of this segmentation is that it is easy to identify and measure the variables involved. Demographic variables enhance the sale of goods and services, since they describe the target customers, hence making it easy for the company to make its sales (Kotler and Armstrong, 2010).

Geographic segmentation depends on customers’ geographical locations including towns, nations, regions, neighborhoods, and counties. An organization may target more than one geographical location; however, bearing in mind that data may not be uniform because of the different population capacities. This segmentation is beneficial since the geographical location of consumers influences their purchasing power. According to Kotler and Armstrong (2005), most companies advertise their products to fit the geographical locations of consumers. Products are also customized to accommodate the geographical locations of the consumers. This segmentation is useful when there are differences in the market where a company wants to market the same product. These differences could be cultural or political, and sometimes negligible or vast.

In psychographic segmentation, personality profiles and lifestyle types of the consumers are considered. These serve as a supplement to the demographic and geographic variables, in case they do not present customer behavior sufficiently. Behavioral segmentation mainly bases on the responses and attitudes of consumers toward specific products. Behavioral variables are considered the most appropriate for formulating market segments.

Segmentation has many benefits to both the consumers and companies. First, it allows for a consumer-oriented kind of marketing. This is useful due to its specificity, and therefore makes it easy for marketing goals to be achieved by companies. Segmentation enables companies to understand the needs of their consumers better. This benefits customers as their needs are met in a satisfactory way, companies are able to achieve their customer satisfaction goals. This further leads to product development to meet specific needs of customers (Kotler and Armstrong, 2010).

Through segmentation, the most suitable markets are chosen. It therefore becomes easier to meet sale targets as the market is guaranteed. Segmentation offers an opportunity to explore suitable markets. Lastly, segmentation enables companies to utilize their resources efficiently. This is because the company is guaranteed that its target segment will yield fruit. In addition, segmentation facilitates advertisements, which are results-oriented.

After segmentation, companies should evaluate the selected segment. According to Kotler, five important factors must be considered. In measurability of the segments, their size is determined using the available data. The accessibility or reachability of segments will tell if the segment can be easily accessed and made sales to. Thirdly, substantiality of the segment determines the profitability of the segment; this depends on the segment size. Actionability of the segments will determine if the company through developing programs fit for the segments can sustain the segments. Finally, basing on responsiveness, a company will determine if it will satisfy the market needs of the segments in the best way possible.

Conclusively, segmentation characterizes modern marketing, and is beneficial to customers as well as marketing firms. It enhances effective marketing and appropriate utilization of resource. Companies should therefore aim at investing in market segmentation. Nonetheless, segmentation provides an answer to; “Who are our customers, and what products do we sell them?”


Works Cited

Kotler, P. and Armstrong, G 2010, Principles of Marketing, Prentice Hall, Pennsylvania State



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