The Advantages of Marketing Segmentation

by Neil Kokemuller ; Updated September 26, 2017
A group of people with shared interests is useful in market segmentation.

Market segmentation is a commonly used process in marketing to define and create distinct market segments from a larger target market, according to Business Dictionary. Market segments are groups with clear and distinct needs and characteristics relative to the larger market. Segmenting markets offer tremendous advantages to companies and marketing firms.

Stronger Positioning

In her Strategic Market Segmentation article "Four Benefits of Market Segmentation," 30 year marketing and communications professional Linda P. Morton, Ed.D., explains that market segmentation helps companies achieve stronger positioning. Positioning is creating a distinct perception in your customers' mind about what makes your products different and better. Having more narrowly defined segments makes it easier for marketers to deliver effective messages that convey the benefits and value desired by that distinct segment.

Improved Efficiency

Marketing efficiency is a major emphasis of market segmentation. By breaking customers into defined segments, companies can remove prospects from consideration when selecting media for message delivery. Advertisements are typically paid for based on the number of people reached by a message. Messages delivered to people not in a given segment have little business benefit and wastes money. Segmenting markets and selectively distributing marketing messages improves the value of the message.

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Competitive Advantages

Morton points out that carefully and accurately defined market segments gives you a competitive advantage over competitors. Essentially, the company that best understands what makes customers unique within a segment, and different from one segment to the next, wins. By better knowing your customer segments, you are most likely to deliver an effective value proposition that entices the customer to your brand. When you know who you are trying to reach, you can perform more targeted research to learn more about customers and deliver messages that best match your brand strengths to their needs and wants.

Targeted Media

Selecting the best media class and vehicle to deliver your marketing messages is crucial to efficient marketing. When you have well-defined market segments and know who you are targeting, it is easier to find the right medium to communicate. If you sell camping equipment, for instance, presenting an add in an outdoor or adventure magazine might make sense given likely interests of the market. In another article on "Market Segmentation: Media," Morton notes that different generally defined market segments are known for utilizing certain types of media more often.

About the Author

Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.

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