Remember What Market Segmentation Is For

Market segmentation is a business strategy that divides a broad market into subsets of buyers with common needs and priorities in order to target them more effectively.

All too often, however, marketing departments get all tied up in the challenge of segmenting their markets, but they forget why they are doing it. They need to remember the reason for the exercise. The end game—increasing sales—is the purpose.

When you think of segmentation in terms of sales territory management, it refers to dividing up territories into common units so that sales within that territory are more efficient and effective. Territories can be segmented according to a variety of criteria:

  • Geographic
  • Customer needs
  • Product offerings
  • Sales potential

They can be sliced many ways but keep in mind why you are doing this. You want to increase sales profitably. Keep segmentation simple, keep it logical, keep it fair and monitor the plan regularly.