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Segmentation studies identify the consumer segments that comprise a market. Segmentation offers a better understanding of consumers by identifying their similarities and differences. By breaking markets into segments with unique wants and needs, companies are able to more carefully target product development and marketing programs to the needs of individual segments, thus providing keys to growing share in a category.
Segmentation studies often uncover consumer groups with unmet needs. The brand that is able to identify such segments and introduce product that meet those needs is the brand that wins the segment. Sophisticated brands track market share by segment as well as in total. Sophisticated brands also know that competitiveness and profitability vary by segment, which is why having a working knowledge of segments is invaluable.
It is also worthwhile to note that the same techniques that help to place consumers in segments can also be reversed to identify which segments consumers are in. This is very useful in conducting research on new product and programs to identify whether those concepts resonate with the target segments.