Market segmentation is the process of dividing a target market into smaller, more defined categories. It segments customers into groups that share similar characteristics. Using different types of market segmentation allows you to target customers based on unique characteristics, create more effective marketing campaigns, and find opportunities in your market.

The four types of Marketing Segmentation are Demographic, Psychographic, Behavioral, and Geographic. Today we’ll review Demographic Segmentation.

Demographic segmentation divides the market into smaller categories based on demographic factors, such as age, gender, or income. Instead of reaching an entire market, this method is used to focus resources into a defined group within that market.

Dividing the market into smaller segments, each with a common variable, allows companies to use their time and resources more efficiently. They can better understand the prospective market, and use advertising personalization to ensure the needs of the targeted group are fulfilled:

Some Demographic Segment Examples include:

• • Age
  • Gender
  • Income
  • Location
  • Annual Income
  • Education
  • Ethnicity

Where the above examples are helpful for segmenting B2C (Business to Consumer) audiences, a business might use the following to classify a B2B (Business to Business) audience:

• • Company size
  • Industry
  • Job function

Demographic information is statistical and factual.