3.1.6—Market segmentation

Market segmentation divides a broad market into groups with shared characteristics or needs, such as demographic, geographic, psychographic or behavioural features.

A useful segment is identifiable, reachable, sufficiently large or valuable and responsive to a distinct offer. Segmentation helps allocate scarce marketing resources rather than assuming one message fits all.

A sports brand might separate beginners and elite runners by experience and desired performance, then vary product design, price and communication.

A category label is not automatically a useful segment; the group must differ in needs or response in a way the business can serve.