Income segmentation is the division of a market into different groups based on the income of consumers. This type of demographic segmentation is often used for products and services such as automobiles, clothing, travel, financial services, and luxury goods.
Companies can target high-income segments with luxury and expensive products or lower-income segments with more affordable products that still provide good value. Marketers need to be careful, as income is not always the best predictor of behavior—spending is often more important than absolute income.
