How to use market segmentation: Developing a target market

Market segmentation is one of the most important steps a business can take to increase its profits. By refining marketing messages for their target market, companies can create a stronger relationship with customers and increase sales and product demand.

Market segmentation helps your business set goals and make better decisions about who you should be selling to, and it lets you decide where to advertise and how best to reach each market segment or group. An excellent way to develop a target market is to look for your competitors’ weaknesses. How can you take advantage of their mistakes? How can you exploit their weaknesses?

How to do market segmentation

Segmentation can be helpful for companies that want to be more responsive to the needs of their target audience and improve customer relationships. Here are some steps to follow when using market segmentation:

Define your overall market

Your overall market is the total number of potential buyers for a product or service in a given geographic area. The first step in developing a target market is to define your overall market. If you are selling to the general public, then your overall market is everyone who can afford and wants to buy your product or service.

If you are selling to businesses, your overall market is all businesses with similar needs and resources to your prospective customers. For example, if you’re selling accounting software for small businesses, your general market includes all small businesses in any industry, e.g., restaurants and retail stores.

Set market segmentation objectives

Once you know who you want to sell to, it’s time to outline your goals for each target audience segment. These goals must be realistic and achievable. If they’re not, measuring success or failure at the end of each quarter or year will be difficult for you to measure sales results against objectives.

Set market segmentation variables

The first step in market segmentation is identifying the variables used to segment your market. The variables can be demographic, geographic, psychographic, or behavioral characteristics. For example, you might decide to segment your market by geographic area, age group, and gender; these variables can be used in most businesses.

Assign variables to market segments

Once you’ve identified the relevant variables for your market segmentation analysis, you’ll need to assign those variables to each segment. For example, if you’re targeting middle-aged women living in Chicago with incomes above $100,000 who attend yoga classes regularly and love travel writing as much as they love food blogs. Then this would be an appropriate target audience for an online cooking school website or magazine subscription service that focuses on healthy recipes that don’t require too much time in the kitchen.

Make sure each segment is viable.

To create a viable target market, you must ensure each segment is large enough to support your business. If you’re planning on selling to consumers, then the most critical factor is their income level. The higher the income level, the more likely they will buy your product or service.

If you’re working with a business clientele, consider factors such as company size, number of employees, annual revenue for each company, and industry trends when considering viability for your target market.

Create a profile for your segments

Once you’ve identified your target market segments and determined they are viable, it’s time to create profiles. These profiles will help you understand what motivates consumers in each segment and what drives their behavior to better tailor your marketing efforts towards them.


In marketing, targeting a specific market can be a powerful strategy. You can reach your consumers more directly and effectively, increasing the possibility that they’ll buy your product or service. Targeting a particular market is also less intimidating than trying to grab a large chunk of the consumer population. While defining who you want to target may take a bit of time, it’s worth it when you find that one group that virtually guarantees success for your company.

Social Media Marketing by Glen Huff

Hi, I'm Glen Huff!

Blogger, marketer, and coffee addict. I constantly have my head involved with the inner workings of the internet. I have a love-hate relationship with Social Media, SEO, PHP, and algorithms. With the industry constantly changing, it's hard to know what works.

This blog aims to take my 13 years of marketing experience and give you a clear path to success. My passion is helping business owners thrive online. I hope this blog becomes a valuable resource to you. May your funnels and social media campaigns shower you with leads.

It can be a difficult task to plan social media posts. What should you share with your followers? What will you post today, tomorrow, or the next?

I recently updated my article on this topic. It’s called: 121 Social Media Post Ideas – Never Get Writer’s Block Again! 

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