Why Product Segmentation Is Important to a Service Provider?

Segmentation helps marketers to be more efficient in terms of time, money and other resources. Market segmentation allows companies to learn about their customers. They gain a better understanding of customer's needs and wants and therefore can tailor campaigns to customer segments most likely to purchase products.

What is product segmentation?

The core theory of product segmentation is that a company can produce a single product with relatively minor variations, market it to different customer groups -- sometimes under different brand names -- and thereby increase market share while reducing the cost of developing radically different products.

Why is customer segmentation important?

Segmentation allows businesses to make better use of their marketing budgets, gain a competitive edge over rival companies and, importantly, demonstrate a better knowledge of your customers' needs and wants.