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Market segmentation involves grouping your various customers into segments that have common needs or will respond similarly to a marketing action. Understanding the concept of segmentation is central to marketing because each customer group will require a different marketing mix strategy. Furthermore, each segment will offer differing growth and profit opportunities so the trick is to deliver the best offer to the best segment.

Some different ways you can segment your market include the following;

• Demographics: focuses on the characteristics of the customer. For example age, gender, income bracket, education, job and cultural background.

• Psychographics: the customer group's lifestyle. For example, the social class they belong to, lifestyle, personality, opinions, and attitudes.

• Behaviour: is based on customer behaviour. For example, online shoppers, shopping centre customers, brand preference and prior purchases.

• Geographical location: such as continent, country, state, province, city or rural that the customer group resides.