Segmentation - GCSE Business Definition

Segmentation is the process of dividing a whole market into sub-groups of consumers based on shared characteristics, needs, or behaviours. Businesses can effectively target their products and marketing efforts to specific groups, ensuring they meet the unique needs of each segment.

For example, a clothing brand may segment its market by age, gender, income level, or lifestyle preferences. By understanding these segments, businesses can tailor their products and advertising to appeal directly to those most likely to purchase, ultimately improving sales effectiveness and customer satisfaction. Segmentation helps maximise business resources so firms can compete better in the marketplace.