Segmentation primarily means to segment the set of target audience ( division of the target audience) according to various needs and preferences. These segments are divided in such a way that according to the target audience it can be divided and do the necessary needings accordingly.
For example a shampoo company wants to target female customers, and only the customers who are between the age of 18-35. Segments will be made according to age or area where they live urbal or rural. Etc.
The segmentation of your market is the first step in the STP process. You divide your market into groups (segments) depending upon certain criteria in this step. You can segment your market using a variety of characteristics, including:
Demographic: dividing your market by age, gender, income level, education level, marital status, occupation, ethnicity, and other factors.
Geographic: Sorting your market by country, region, state or province, city or metropolitan area, neighborhood, and so on.
Psychographic: People are divided into groups based on their lifestyles, hobbies, activities, opinions, religious beliefs, political affiliation, entertainment preferences, personality traits, attitudes, and other factors. Psychographic data says “why” your potential consumer buys, whereas demographic data explains “who” they are.
Behavioral: This segmentation breaks down your market based on how they use the goods, such as how they paid for it, brand loyalty, usage level, major benefits sought/key features used, and so on.
When you segment your market and then target your marketing on a specific segment based on the data you’ve obtained about that group, you’re much more likely to succeed than if you just established a one-size-fits-all generic marketing campaign.