Market segmentation: what it is, examples, types and strategies

Wasabi Team
Wasabi Team

Market segmentation is a basic strategy of optimized marketing. In fact, you may have already seen that it is possible to do segmentation in many digital marketing tools as part of their functions.

However, segmenting a market does not just involve grouping a set of data from your customers, it really requires time and analysis. In other words, it has its art.

To master it you have to know what market segmentation is, how it is applied in marketing, the types of segmentation there are, what you should take into account when performing it, and finally, how to carry it out.

In the following lines I will answer all these questions. And as a bonus to your preparation, I will show you some examples applied to each type of market segmentation.

Market segmentation: what it is, examples, types and strategies

What is market segmentation?

Market segmentation is the action of grouping customers or target audiences into sets and, in some cases also into subsets. To do this, a series of factors are determined that identify them within that group, such as age, sex, and location, among others.

The main objective pursued by any appropriate market segmentation is to be able to reach the specific and important audience that could be a consumer of the offer. Then, within this larger goal, more specific ones can come; For example, they buy through the app instead of through the web.

Other specific objectives that are important are:

  1. The right choice of price.
  2. Define the style of presentation of the offer.
  3. Identify the best channel or platform to publish.
  4. Adapt the product or service to the public.

On the other hand, it is important that, when carrying out segmentation, there are indeed enough differentiating elements between the groups, but that there are also enough unifying factors between the people within that group.

Let’s clarify it with an example:

  • Imagine that you want to sell a product to your young audience between 15 and 17 years old. Is that information enough to prepare the announcement? Of course not, because it could be that within the group not everyone has the same purchasing power or communicates in the same way, or with the same style.

Making a proposal without taking into account these last factors will undoubtedly reduce the effectiveness of the campaign.

What is market segmentation in marketing?

Applied to marketing, market segmentation pursues two main objectives that are slightly different from what we mentioned before.

What happens is that, when creating the marketing plan for the company or brand, you not only have to think about selling, but also how to do it.

That is why these 2 objectives are kept in mind when doing market segmentation in marketing:

  1. Identify and classify the target audience: this is very similar to the normal segmentation process, since you want to group the audience to separate and differentiate them more easily. Remember that marketing strategies must be specific and not generic.
  2. Create a standout and attractive value proposition: this is the consequence of achieving the previous objective. Once you know who you will target, you can prepare the ad in a way that stands out from the competition’s proposals and is attractive to the public.

Types of market segments

There are 4 clearly identifiable types of market segmentation, in fact, they are the most used.

However, it may be that hybrids of these 4 are created that give way to others, but that depends on each company. We are going to focus on the most recognized, and they are:

Segmentation by demographics

This type of segments groups together individuals who share the same characteristics such as age, ethnicity, gender, profession, level of education, purchasing power, religion, marital status, family size, and so on.

As you can see, it is possible to make subgroups according to these parameters, but it can also be done by considering more than one at a time (which is the most common and advantageous for marketing).

Segmentation by geography

Geography is another important factor when separating clients, and the most common thing is to do it by country, and then by states (departments), municipalities or by larger regions that include several of the above.

This type of segmentation is the most used and the easiest to outline, since it does not require as much research.

Behavioral segmentation

The way consumers react to products is also an indicator that serves to separate them.

For example, those who come to the website through ads in Google Ads, Facebook Ads or Twitter Ads, or if they rather subscribe to the newsletter.

This behavior is a relevant aspect for the preparation of the content.

Psychographic segmentation

It refers to the grouping of customers according to their psychological traits such as opinions, personality, lifestyle, priorities, and so on.

As they are intangible aspects, it is difficult (if not impossible) to measure them through software tools, so the effective way to do a psychographic segmentation is through interviewing the buyer persona; Failing that, through in-depth studies and analysis of the Big Data that you have available.

What are the variables to segment the market?

Regardless of the type, or types, of segmentation that you prefer to apply, all must be governed by basic variables when defining and applying them. These are:


One of the fundamental characteristics of all marketing actions is that they are measurable. A market segment must be able to be quantified, that is, determining the specific number of people who belong to that group.

In certain specific cases, you cannot have a specific amount, but you must at least work with a realistic estimate.

On the other hand, it is also important to be able to measure all (or at least most) of the criteria of each segment.

For example, if it is an age segment, then the exact age of each person must be able to be identified; If it is a segment by income, then you have to be able to precisely define how much each person earns.

Cost effectiveness

For a business to be profitable, it must have a sufficient consumer audience, and that also applies to market segments.

So you cannot work with a small group since, in general, this decreases the chances of there being a good return on investment.

Of course, there is no specific amount to define a group or segment as “reduced,” since each market moves differently.

For example, an eCommerce selling skin care products does have a large audience to segment, perhaps up to thousands of people.

But a B2B company might target only a few dozen potential customers, so your segments would be a few targets, maybe 10 to 15 companies/customers.


It is essential that it is possible to work on the chosen segment, otherwise, it will be of no use to know that it exists and to define it.

In practical terms, this means that it will not be of any use to you to segment the Italian audience that is visiting your website if you cannot offer your products or services there.

It is true that knowing this information will tell you where to invest in the expansion of your business, but if you are not able to internationalize, then it will only be interesting information.

It is best to focus your investment in marketing strategies in the areas you can reach.


In line with the previous variable, it is also relevant that you segment your audience according to stable criteria, which although they may register some change, perhaps for certain seasons, it is at least possible to have a viable minimum of people within that group and that its characteristics are homogeneous to be able to work with it.

How to do market segmentation step by step

It’s time to get into practice and see how to do market segmentation by following a series of steps.

Step 1: Make a general segmentation of your audience

Logically, you are not targeting each and every person on this planet, since not everyone has the same interest. So you have to generally define what your target audience is. And for this you have the 4 main types of segmentation.

Within this first analysis, you will surely find a lot of audience, and this is good since it means that there is plenty of data to discard and to choose from.

Step 2: Choose the target audience

Now that you have separated your audience into groups, you have to choose those you can competently address, that is, those you can appropriately serve with your proposal.

For example, if it is a new product launch, it is best to target a specific audience, that is, those from a certain country, because then you only have to attend to a few cultural elements.

It is valid that you work on more than one segment at a time, in fact, that would be phenomenal for your ROI, but always make sure that you work well on each one, both from preparing the content of the proposal to the ability to meet demand.

Step 3: Delineate your buyer persona

Within the group you chose to work with, there are real people, human beings who have real tastes, behaviors, ideas and needs. In order to reach them with your proposal you have to make an effort to know them in detail to see if you really have a chance of them buying from you.

Of course, that doesn’t mean you have to interview them one by one, but you should find a way to find out what their priorities are, what they like to do in their free time, how much they earn at their job if they have one, if they’re happy. with him, if he has a family… well, you have to get a realistic idea of who your potential consumers are.

Step 4: Prepare the appropriate strategy

Based on the specific data of your buyer persona, it is time to prepare the content of the proposal, this includes:

  • The communication style: if it will be fresh and informal (youthful) if it will be formal and technical, and so on.
  • The publication channel: the web, the blog, Twitter, Facebook, Instagram, etc.
  • The elements: if it will have static images or a video, it will have a presenter or a narrative voice.

You have to do all this with each buyer persona that you are going to work with with the specific campaign since it is totally valid to include several. This means that it may be necessary to create different proposals, although fundamentally related, that adapt to each segment.

For example, you can create an infomercial for your Baby-boomer audience, a Facebook Ads ad for Gen Xers, and a short TikTok video that appeals to Millennials.

Step 5: Track the strategies

After implementing the strategies, you have to follow up on them and see if you have to modify and adjust them based on the results you have.

In addition, collecting interaction data will help you for future campaigns about what you should or should not do.

Examples of market segmentation strategies

Every day we see examples of how companies segment their markets and adapt their proposals so that consumers feel that the brand is addressing them specifically. Here are 3 short examples:

  • Coca-Cola: The globally recognized soft drink brand has a history of advertising appropriate by region and even by season. For example, in America, their Christmas propaganda with Santa has become a classic.
  • Starbucks: To make customers feel that the brand thinks about each individual, the coffee cups come with the name of their buyer. So when they call them directly to pick up the drink, they feel the exclusivity of the service.
  • Ferrari: have you ever seen an advertisement for a Ferrari car? Probably not. This happens because the luxury car brand targets and deals with a hyper-segmented audience, which prioritizes appearances and has the economic potential to buy.


Market segmentation is another marketing strategy that you absolutely have to apply to be successful. And the good results of working with a specific audience far exceed those you could achieve by targeting the general audience.

Now that you have an idea of how to separate your target audience, always keep the variables in mind to make sure you don’t make a mistake. And remember that there are many tools that will make the process even easier for you.