How Market Segmentation Benefits Companies

An advertising and marketing company focused on the timeshare marketplace, Bay Tree Solutions exclusively serves private owners rather than resort developers. To support the sales process, Bay Tree Solutions has developed a clear understanding of various segments of timeshare resale buyers and targets the top candidates with its advertising outreach. As marketing experts note, this type of market segmentation allows firms to focus their resources on the highest-potential audiences.

When segmenting and analyzing a market, a company divides customers into similar groupings based on perceived needs and wants. Since most companies have finite marketing resources, segmentation allows them to make strategic choices about which customer groups to pursue. As a consequence, segmentation allows companies to reduce risks and achieve greater efficiency, while delivering valued products and services to the clients who desire them.

In addition, market segmentation helps a company avoid trying to serve too many customers. In attempting to be too broad, companies may dilute their message and fail to differentiate themselves in any specific market.