
What is Market Segmentation? (Three Types)
You can segment your potential market using standard techniques to group people together with shared characteristics. You can apply the same approach to business clients by segmenting them in terms of their industry, number of employees, turnover, and types of owners. By focusing on the specific shared characteristics, you can generalize about expected group behavior and attitudes. It’s crucial to work with facts and not stereotypes. We will be discussing three types of segmentation and how they can be applied to your segmentation process.
Demographic Targeting

Demographics means information about a population. The concept peaked in the 1980s and is now widely used to describe information relating to gender, age, education, zip code, religion, race, marital status, and any distinguishing feature that distinguishes one group of people from another like hair or eye color.
Demographic information is readily available because governments across the world collect this type of information through census surveys. For example, if you are thinking of setting up a business that sells baby blankets, then a median age of 75 is not the area for you – unless you are targeting great grandparents.
Your product or service may be right for all ages, but you still need demographic information when marketing in an area. The language you use with retired people is different from the words that resonate with teenagers. Even products with widespread appeal need market segmentation to shape the communication style for the best effect.
Demographic data is useful in understanding who your customers are and what they are likely to want. Understanding the demographic information gives you the tools to shape your approach. People buy from people like them – demographic targeting influences the choice of images, words, and music in your marketing.

Location is as important in business as it is in real estate. If you are a business selling handcrafted fresh bread still warm from your oven, you are selling primarily to a local market. You are more interested in reaching the people in your corner of the globe.
Suppose you have a global product, geo-targeting matters because every area, state or country has different nuances. Even down to the name of your product – translation can turn a charming product into a PR nightmare. American beer – Coors got their message messily wrong when their successful “Turn it loose” slogan transferred to Spanish.
Social media with a global reach highlights the importance of geotargeting in placing marketing messages to audiences that live in your geographic target area.
Geo-targeting allows you to focus your messages in a culturally appropriate and effective way, ideal for promoting local business and vital if trying to increase sales in a new geographical area. Geotargeting is more than just pins on a map – combine it with demographics, and you have a powerful tool to build a rich field of potential customers in geographical hotspots for your ideal customer.
Psychological and Behavioral Targeting

Every person on the planet has needs (or drives), holds beliefs (values), and behaves in patterns arising from their needs, values, habits, upbringing, society, and status. Psychological and behavioral google targeting gets a bad press because no one likes to feel that they have been manipulated or tricked.
But psychological targeting is a powerful tool to help the customer by allowing a deep and rewarding interaction with the products and services they need. Everyone has an innate response to what they see, hear, and experience. Understanding why people are attracted to some messages rather than others is not manipulative if done honestly and authentically.
When marketing a product or a service, you want to persuade a potential customer to reach and pass the buying point—people who like to keep fit share a set of behaviors and habits – exercise, for example. If your product is high-tech running shoes, you are targeting people who run. You need to understand why people run and what their needs and drives are for running shoe features.
Mass personality testing needs consent, but in the digital age, your footprint reveals useful information about what you like to do – your interests. People who wear high tech running shoes want to run – you’d expect to find these potential customers signing up for fun runs and marathons, posting pictures of their medals and details of the places they’ve trained.
Psychological profiling with big data is growing more detailed, and this behavioral information allows targeting audience interests with powerful marketing tools. You place your message to people who are already interested in your product or service – a warm market.