Market segmentation is used as a strategic marketing tool for defining markets and thereby allocating resources, and is a technique that is widely accepted as a cornerstone of successful marketing. Segmentation studies use statistical techniques to combine attitudinal and demographic data to develop segments that are easier to target. The purpose for segmenting a market is to allow marketing and sales programs to focus on the subset of prospects that have the highest probability of purchasing the product offering rather than targeting a broader audience with a general message.

Market segmentation is concerned with individual or group differences in response to specific market variables (e.g. preferences, lifestyles, media habits, etc.). The strategic presumption is that if these response differences exist, can be identified, and are reasonably stable over time, and if the segments can be efficiently reached, the company may increase its market share beyond that obtained by assuming market homogeneity.

From a marketing management viewpoint, market segmentation is the act of dividing a market into distinct groups who might be attracted to different products or services. By dividing the market into relatively homogenous subgroups or target markets, both strategy formulation and tactical execution can be more effective, and can result in more efficient marketing spend. SportsEconomics’ Associates have performed such studies for clients in sports, packaged goods, media, and retail industries.