What is Segmentation?

Segmentation is the process of buyer-based marketing which separates customers, or prospects, into groups, or target audiences / markets, according to preferences or personas. The goal is to reduce product or service marketing decision risk while increasing marketing efficiency. It allows resources to be better allocated by attracting the right customer to the corresponding product, based on target group interest. Segmentation may use either a concentration strategy, which focuses all marketing efforts on the preferences of only one target group, or a multi-segment strategy, which further divides the marketing focus and efforts among two or more target groups.