Copywriteroffice

Serp data

Request Result Detail

The request result help you to show your API requests results.

Copywriteroffice - market segmentation serp result detail
Keyword market segmentation
Search Urlhttps://www.google.com/search?q=market+segmentation&oq=market+segmentation&num=30&hl=en&gl=US&sourceid=chrome&ie=UTF-8
Devicedesktop
Languageen
LocationUS
Search Enginegoogle.com
No. Of Results118000000
RelatedSearch
market segmentation pdfhttps://www.google.com/search?num=30&hl=en&gl=US&q=Market+segmentation+PDF&sa=X&ved=2ahUKEwiT84H9v6z1AhU1oFsKHbJeD3sQ1QJ6BAhJEAE
what are the benefits of market segmentationhttps://www.google.com/search?num=30&hl=en&gl=US&q=What+are+the+benefits+of+market+segmentation&sa=X&ved=2ahUKEwiT84H9v6z1AhU1oFsKHbJeD3sQ1QJ6BAhIEAE
market segmentation exampleshttps://www.google.com/search?num=30&hl=en&gl=US&q=Market+segmentation+examples&sa=X&ved=2ahUKEwiT84H9v6z1AhU1oFsKHbJeD3sQ1QJ6BAhGEAE
market segmentation in entrepreneurshiphttps://www.google.com/search?num=30&hl=en&gl=US&q=Market+segmentation+in+Entrepreneurship&sa=X&ved=2ahUKEwiT84H9v6z1AhU1oFsKHbJeD3sQ1QJ6BAhFEAE
market segmentation processhttps://www.google.com/search?num=30&hl=en&gl=US&q=Market+segmentation+process&sa=X&ved=2ahUKEwiT84H9v6z1AhU1oFsKHbJeD3sQ1QJ6BAhEEAE
market segmentation variableshttps://www.google.com/search?num=30&hl=en&gl=US&q=Market+segmentation+variables&sa=X&ved=2ahUKEwiT84H9v6z1AhU1oFsKHbJeD3sQ1QJ6BAhAEAE
homogeneous market segmentationhttps://www.google.com/search?num=30&hl=en&gl=US&q=Homogeneous+market+segmentation&sa=X&ved=2ahUKEwiT84H9v6z1AhU1oFsKHbJeD3sQ1QJ6BAg6EAE
criteria for market segmentationhttps://www.google.com/search?num=30&hl=en&gl=US&q=Criteria+for+market+segmentation&sa=X&ved=2ahUKEwiT84H9v6z1AhU1oFsKHbJeD3sQ1QJ6BAg3EAE
Result 1
Title
Url
Description
Date
Organic Position1
H1
H2
H3
H2WithAnchors
Body
Topics
  • Topic
  • Tf
  • Position
Result 2
TitleMarket Segmentation: The 4 Types & 10 Benefits With Examples
Urlhttps://www.yieldify.com/blog/types-of-market-segmentation/
DescriptionLearn about the 4 types of market segmentation: demographic, psychographic, geographic, and behavioral & their benefits with examples from top brands
Date
Organic Position2
H14 Types of Market Segmentation With Real-World Examples
H2The 4 types of market segmentation with examples
Other types of market segmentation with examples
10 Benefits of Market Segmentation
In conclusion
Market Segmentation FAQs
Join 1000+ brands & businesses worldwide winning with Yieldify
H31. Demographic segmentation: The who
2. Psychographic segmentation: The why
3. Geographic segmentation: The where
4. Behavioral segmentation: The how
Technographic segmentation
Generational and life stage segmentation
Transactional segmentation
Firmographic Segmentation
1. More effective marketing
2. More efficient spending
3. Higher quality leads
4. Identifying niche markets
5. Improved customer retention
6. Differentiating your brand
7. More focus
H2WithAnchorsThe 4 types of market segmentation with examples
Other types of market segmentation with examples
10 Benefits of Market Segmentation
In conclusion
Market Segmentation FAQs
Join 1000+ brands & businesses worldwide winning with Yieldify
Body4 Types of Market Segmentation With Real-World Examples When you’re looking to improve the effectiveness of your marketing, segmentation should always be one of your first ports of call. Learn about the 4 most common types of market segmentation, plus some other ones that you may have missed. Market segmentation is an increasingly important part of a strong marketing strategy and can make all the difference for companies in competitive market landscapes, such as e-commerce. When up against a range of online competitors, effective communication is the best way to differentiate your business. Market segmentation offers an opportunity to pinpoint exactly what messaging will drive your customers to make a purchase. The 4 basic types of market segmentation are:1. Demographic2. Psychographic3. Geographic4. Behavioral We’ll go into there 4 types in a lot more detail below. In this article, we’ll cover1. Demographic segmentation2. Psychographic segmentation3. Geographic segmentation4. Behavioral segmentation5. Other types of segmentation6. The benefits of segmentation7. Conclusion The 4 types of market segmentation with examples. The purpose of market segmentation is to identify different groups within your target audience so that you can deliver more targeted and valuable messaging for them. There are four main customer segmentation models that should form the focus of any marketing plan. For example, the four types of segmentation are Demographic, Psychographic Geographic, and Behavioral. These are common examples of how businesses can segment their market by gender, age, lifestyle etc. Let’s explore what each of them means for your business. 1. Demographic segmentation: The who. Demographic segmentation might be the first thing people think of when they hear ‘market segmentation’. This is perhaps the most straightforward way of defining customer groups, but it remains powerful. Demographic segmentation looks at identifiable non-character traits such as: AgeGenderEthnicityIncomeLevel of educationReligionProfession/role in a company For example. demographic segmentation might target potential customers based on their income, so your marketing budget isn’t wasted directing your messaging at people who likely can’t afford your product. Luxury goods manufacturer Montblanc worked with Yieldify to present a selection of offers across their website. One sought to raise conversions using a Father’s Day deal that offered a free gift to those spending over £200 – an amount that acknowledged the spending expectations of Montblanc’s target audience and saw a +118% uplift in conversions for those targeted. Another offer was aimed specifically at corporate gift buyers – a market segment that Montblanc particularly appeals to – and resulted in a +30% uplift for that segment. Segmentation isn’t just about your business reaching customers more effectively – it’s also about those customers seeing messaging that is more relevant to them! 2. Psychographic segmentation: The why. Psychographic segmentation is focused on your customers’ personalities and interests. Here we might look at customers and define them by their: Personality traitsHobbiesLife goalsValuesBeliefsLifestyles Compared to demographic segmentation, this can be a harder set to identify. Good research is vital and, when done well, psychographic segmentation can allow for incredibly effective marketing that consumers will feel speaks to them on a much more personal level. In our experience working with luxury resort business Omni Hotels & Resorts, for example, were aware that a big sector of the company’s target audience was always keen to get the very best price they could. By targeting a notification campaign specifically towards comparison shoppers, Omni Hotels & Resorts achieved a 39% conversion rate uplift. 3. Geographic segmentation: The where. By comparison, geographic segmentation is often one of the easiest to identify, grouping customers with regards to their physical location. This can be defined in any number of ways: CountryRegionCityPostal code For example, it’s possible to group customers within a set radius of a certain location – an excellent option for marketers of live events looking to reach local audiences. Being aware of your customers’ location allows for all sorts of considerations when advertising to consumers. Using Yieldify’s tools, an online shoe store could show different products depending on where the visiting customer was based: wellington boots for someone in the countryside, pavement-friendly trainers for a city-dweller, strappy sandals to resort visitors, and so on! In large nations like the United States, customers could be presented with options that match with local weather patterns. Geographical identification is an important part of seasonal segmentation, which allows businesses to market season-appropriate products to customers. Some recent examples of proper geographic segmentation came from the response by e-commerce businesses to the coronavirus pandemic. During lockdown stages, many businesses shifted their focus to local communities to highlight how their services could still be accessed online. Conversely, as public spaces began to open up again purely e-commerce brands had to shift their marketing plans to maintain the levels of business they had seen over the lockdown period. 4. Behavioral segmentation: The how. Behavioral segmentation is possibly the most useful of all for e-commerce businesses. As with psychographic segmentation, it requires a little data to be truly effective – but much of this can be gathered via your website itself. Here we group customers with regards to their: Spending habitsPurchasing habitsBrowsing habitsInteractions with the brandLoyalty to brandPrevious product feedback All of these are datasets that can be harvested from a customer’s usage of your website. At Yieldify, we utilize behavioral segmentation to deliver highly relevant and targeted campaigns based on a number of behavioral patterns: Number of sessions to your websiteNumber of pages visitedTime spent on siteURLs visitedPage types visitedShopping cart valueCampaign historyReferral sourceExit intentInactivity, and more. For example, we can distinguish between a first-time visitor and someone who’s already been on your site multiple times but haven’t purchased. Based on this behavioral data, we can tailor our messaging accordingly: First time visitor: Hey, learn about our latest collection!Returning visitor: Join our loyalty program and start saving! Working with online wine club Vinomofo, we used behavioral segmentation to target three distinct audiences: new visitors, returning visitors, and returning clients. One of the best examples of this type of segmentation is showing new visitors a $15 incentive in exchange for joining the community. Returning visitors who had already subscribed but have not redeemed their coupon yet were reminded on their first order incentive. Whereas returning customers saw a campaign about Vinomofo’s premium services.  This targeted approach focused on purchasing habits reached a 34.02% conversion rate uplift with new and 29.24% CR uplift with returning visitors! Other types of market segmentation with examples. Though the most common types of market segmentation are demographic, psychographic, geographic, and behavioral, there are other types that are also worth considering and can offer excellent opportunities in the right context. Technographic segmentation. Technographic segmentation identifies and groups customers with regards to the role technology plays in their lives. This might mean recognizing groups of early adopters when marketing new technologies. It might also be as simple as recognizing the device users access the site from and presenting deals differently. With personalization, it’s easy to target adverts at specific groups like this. Consumers accessing an online phone store via the Safari internet browser might be more interested in Apple products – and can be shown these as a result. Generational and life stage segmentation. Generational and life stage segmentation both expand on aspects of the demographic approach. Identifying customers by generation allows for broad but distinct approaches depending on age. Life stage segmentation, however, works similarly whilst divorcing life experience from age itself. Instead, it groups customers by factors including marital status, home-ownership, and whether or not they have children (and more specific still by considering the ages of their children). Bank of America, for example, has successfully used life stage segmentation in their digital marketing strategy. Medialogic details BoFA’s “Family Life Banking” program that invited customers to segment themselves by clicking on a relatable tab within and email. From there, the customer would land on a custom microsite designed specifically for their segment. Transactional segmentation. Transactional segmentation is based on previous interactions your customer has had with your brand. Whilst it can draw on behavioral elements, it also has a much wider scope – considering the initial source of their registration with your business, how long it has been since their last order, and how many orders they’ve made overall.  Yieldify worked with clothing retailer Turnbull & Asser to boost conversion rates on their online store. Offering free shipping to all their customers would have been too expensive, so Yieldify targeted a specific transactional segment of their userbase – offering free shipping to those with a set value of items already in their carts. The shipping offer encouraged many of those targeted to make the extra purchases necessary to claim it, and drove over £22,000 of extra revenue for the brand. Picking up on information like this is a particularly effective strategy across multiple industries, including top competitors to mass global retailers like Amazon, presenting e-commerce businesses with the best understanding of their customers, and encouraging return visits. Firmographic Segmentation. Whilst the above marketing segmentation strategies mainly focus on B2C organizations, Firmographic segmentation can be extremely useful to those in the B2B world. Firmographic segmentation is the process of analyzing and classifying B2B customers based on shared company or organization attributes & characteristics. This segmentation strategy allows B2B companies to better understand and target their audience and marketing campaigns. This process is very similar to the way B2C marketers would use demographic segmentation. This type of market segmentation predominantly uses 7 factors to identify customer segments. IndustryLocationCompany SizeStatusNumber of employeesPerformanceExecutive TitleSales Cycles Stage This market segmentation process can help form an effective B2B marketing strategy by identifying target customers and tailoring marketing efforts to these specific customer segments. 10 Benefits of Market Segmentation. There are many benefits of market segmentation, our top 10 are below. 1. More effective marketing. This is the biggest and most obvious benefit to well-implemented market segmentation. By better recognizing the needs of your customers, you can identify more effective tactics for reaching them and improving their interactions and experience with your business. 2. More efficient spending. After all, your targeted marketing is going to allow for better returns on investment, and you’ll waste less money on marketing that reaches the wrong audience. 3. Higher quality leads. You’ll also notice that the more targeted more marketing is, the better your leads become. You’re reaching the right people, and they’re starting to notice you! 4. Identifying niche markets. Similarly, your research into segmentation may help you recognize areas of the market you’d not considered before. This might even lead to the development of new products that are aimed specifically towards these markets. 5. Improved customer retention. By identifying your customers by their needs, you can put out marketing that offers irresistible reasons for a return visit. This is proven to increase customer retention, customer loyalty and lifetime value. 6. Differentiating your brand. The purpose of market segmentation is not only to help you reach your audience but also to allow your customers to see the true value of your brand via marketing that speaks to them – and in doing so puts you head and shoulders above your competitors. 7. More focus . Ultimately, thoughtful customer segmentation will allow your business to focus every element of its activity to better reach those that it serves. Your marketing becomes focused on your customers’ needs, your research and development may focus on meeting those needs, your spending will be focused on achieving these, and not wasted on mistargeted marketing and planning. Everything becomes better suited to giving your customers what they need, and as a result, your business becomes exactly the sort of business they want to be buying from. This can greatly help with the return on investment of all your marketing activity. In conclusion. So, as you can see there are different types of marketing segmentation you can choose from to find and define your target market to effectively promote your product or service. Your customers’ every decision is judged on whether the result is what they want, or whether it is what they need. Market segmentation allows you to recognize these needs and market directly to them, without any wasted messaging. Whether it’s telling new drivers about the best car insurance for them, or sharing offers on barbeques and sun-chairs to those living in the middle of a heatwave, market segmentation offers you thousands of ways to ensure your customers see you as exactly what they want, and exactly what they need. Market Segmentation FAQs. What is meant by market segmentation? Market segmentation builds a subset of a market. This can be based on demographics, needs, priorities, common interests, and other psychographic or behavioral criteria. What are the 4 types of market segmentation? The 4 basic types of market segmentation are:1. Demographic2. Psychographic 3. Geographic4. Behavioral What are the advantages of market segmentation? By segmenting your market you’ll be able to understand your customer’s needs better and how you can fulfill these better than your competition. Join 1000+ brands & businesses worldwide winning with Yieldify. Get Started
Topics
  • Topic
  • Tf
  • Position
  • segmentation
  • 64
  • 2
  • customer
  • 43
  • 2
  • market
  • 36
  • 2
  • market segmentation
  • 25
  • 2
  • marketing
  • 22
  • 2
  • type
  • 20
  • 2
  • business
  • 19
  • 2
  • behavioral
  • 15
  • 2
  • type market
  • 12
  • 2
  • demographic
  • 12
  • 2
  • example
  • 12
  • 2
  • psychographic
  • 11
  • 2
  • target
  • 11
  • 2
  • type market segmentation
  • 9
  • 2
  • audience
  • 9
  • 2
  • visitor
  • 9
  • 2
  • yieldify
  • 8
  • 2
  • effective
  • 8
  • 2
  • product
  • 8
  • 2
  • offer
  • 8
  • 2
  • group
  • 8
  • 2
  • targeted
  • 8
  • 2
  • segment
  • 8
  • 2
  • demographic segmentation
  • 7
  • 2
  • geographic
  • 7
  • 2
  • focu
  • 7
  • 2
  • based
  • 7
  • 2
  • life
  • 7
  • 2
  • commerce business
  • 6
  • 2
  • target audience
  • 6
  • 2
  • strategy
  • 6
  • 2
  • online
  • 6
  • 2
  • messaging
  • 6
  • 2
  • identify
  • 6
  • 2
  • stage
  • 6
  • 2
  • brand
  • 6
  • 2
  • psychographic segmentation
  • 5
  • 2
  • behavioral segmentation
  • 5
  • 2
  • commerce
  • 5
  • 2
  • life stage segmentation
  • 4
  • 2
  • geographic segmentation
  • 4
  • 2
  • group customer
  • 4
  • 2
  • life stage
  • 4
  • 2
  • stage segmentation
  • 4
  • 2
  • marketing segmentation
  • 3
  • 2
  • marketing strategy
  • 3
  • 2
  • segmentation demographic
  • 3
  • 2
  • customer based
  • 3
  • 2
  • segmentation business
  • 3
  • 2
  • conversion rate
  • 3
  • 2
  • returning visitor
  • 3
  • 2
  • customer segment
  • 3
  • 2
  • firmographic segmentation
  • 3
  • 2
Result 3
TitleMarket Segmentation Definition
Urlhttps://www.investopedia.com/terms/m/marketsegmentation.asp
DescriptionMarket segmentation refers to aggregating prospective buyers into groups with common needs and who respond similarly to a marketing action
Date
Organic Position3
H1Market Segmentation
H2What Is Market Segmentation?
Understanding Market Segmentation
Examples of Market Segmentation
Market Segmentation FAQs
H3Key Takeaways
What Is the Definition of Market Segmentation?
What Are the Types of Market Segmentation?
What Are Some Market Segmentation Strategies?
Related Terms
Related Articles
What Are Companies That Use Segmentation?
Why Socially Responsible Marketing Matters
Similarities Between Product Differentiation and Product Positioning
Porter's 5 Forces vs. PESTLE Analysis: What's the Difference?
The Economics Behind Sneakers (NKE, ADDYY)
How Smartphones Changed Advertising
H2WithAnchorsWhat Is Market Segmentation?
Understanding Market Segmentation
Examples of Market Segmentation
Market Segmentation FAQs
BodyMarket Segmentation By Evan Tarver Full Bio Evan Tarver has 6+ years of experience in financial analysis and 5+ years as an author, editor, and copywriter. Learn about our editorial policies Updated April 05, 2021 Reviewed by Khadija Khartit Reviewed by Khadija Khartit Full Bio Khadija Khartit is a strategy, investment, and funding expert, and an educator of fintech and strategic finance in top universities. She has been an investor, entrepreneur, and advisor for more than 25 years. She is a FINRA Series 7, 63, and 66 license holder. Learn about our Financial Review Board Business Business Essentials Marketing Essentials Business Leaders Corporate Finance & Accounting Small Business Company Profiles What Is Market Segmentation? . Market segmentation is a marketing term that refers to aggregating prospective buyers into groups or segments with common needs and who respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. Key Takeaways. Market segmentation seeks to identify targeted groups of consumers to tailor products and branding in a way that is attractive to the group.Markets can be segmented in several ways such as geographically, demographically, or behaviorally.Market segmentation helps companies minimize risk by figuring out which products are the most likely to earn a share of a target market and the best ways to market and deliver those products to the market.With risk minimized and clarity about the marketing and delivery of a product heightened, a company can then focus its resources on efforts likely to be the most profitable. 1:40 Market Segmentation. Understanding Market Segmentation . Companies can generally use three criteria to identify different market segments: Homogeneity, or common needs within a segmentDistinction, or being unique from other groupsReaction, or a similar response to the market For example, an athletic footwear company might have market segments for basketball players and long-distance runners. As distinct groups, basketball players and long-distance runners respond to very different advertisements. Understanding these different market segments enables the athletic footwear company to market its branding appropriately. Market segmentation is an extension of market research that seeks to identify targeted groups of consumers to tailor products and branding in a way that is attractive to the group. The objective of market segmentation is to minimize risk by determining which products have the best chances of gaining a share of a target market and determining the best way to deliver the products to the market. This allows the company to increase its overall efficiency by focusing limited resources on efforts that produce the best return on investment (ROI). Companies can segment markets in several ways: Geographically by region or areaDemographically by age, gender, family size, income, or life cyclePsychographically by social class, lifestyle, or personalityBehaviorally by benefit, use, or response The objective is to enable the company to differentiate its products or message according to the common dimensions of the market segment. Market segmentation allows a company to increase its overall efficiency by focusing limited resources on efforts that produce the best return on investment (ROI). Examples of Market Segmentation . Market segmentation is evident in the products, marketing, and advertising that people use every day. Auto manufacturers thrive on their ability to identify market segments correctly and create products and advertising campaigns that appeal to those segments. Cereal producers market actively to three or four market segments at a time, pushing traditional brands that appeal to older consumers and healthy brands to health-conscious consumers, while building brand loyalty among the youngest consumers by tying their products to, say, popular children's movie themes. A sports-shoe manufacturer might define several market segments that include elite athletes, frequent gym-goers, fashion-conscious women, and middle-aged men who want quality and comfort in their shoes. In all cases, the manufacturer's marketing intelligence about each segment enables it to develop and advertise products with a high appeal more efficiently than trying to appeal to the broader masses. Market Segmentation FAQs  . What Is the Definition of Market Segmentation? . Market segmentation is a marketing strategy in which select groups of consumers are identified so that certain products or product lines can be presented to them in a way that appeals to their interests. What Are the Types of Market Segmentation? . Types of segmentation include homogeneity, which looks at a segment's common needs, distinction, which looks at how the particular group stands apart from others, and reaction, or how certain groups respond to the market. What Are Some Market Segmentation Strategies? . Strategies include targeting a group by location, by demographics—such as age or gender—by social class or lifestyle, or behaviorally—such as by use or response. Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Service Name Description Related Terms. What Is a Market Segment? A market segment is a group of people who share one or more common characteristics, lumped together for marketing purposes. more Micromarketing: Advertising Focused on a Specific Group of Customers Micromarketing is an approach to advertising that tends to target a specific group of people in a niche market. With micromarketing, products or services are marketed directly to a targeted group of customers. more What Is Demographics Analysis? Demographic analysis is the study of a population based on factors such as age, race, sex, education, income, and employment. more What Is a Segment in Business? A segment is a business unit that generates its own revenue and creates its own products or services. Read how segments help companies make a profit. more Understanding How Companies Use Product Lines A product line in business is a group of related products under the same brand name manufactured by a company. Read how product lines help a business grow. more Understanding Product Differentiation Product differentiation is the process of identifying and communicating the unique qualities of a brand compared to its competitors. more Partner Links Related Articles. Marketing Essentials What Are Companies That Use Segmentation? Socially Responsible Investing (SRI) Why Socially Responsible Marketing Matters. Marketing Essentials Similarities Between Product Differentiation and Product Positioning. Financial Analysis Porter's 5 Forces vs. PESTLE Analysis: What's the Difference? Sectors & Industries Analysis The Economics Behind Sneakers (NKE, ADDYY). Marketing Essentials How Smartphones Changed Advertising. About Us Terms of Use Dictionary Editorial Policy Advertise News Privacy Policy Contact Us Careers California Privacy Notice # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Topics
  • Topic
  • Tf
  • Position
  • market
  • 38
  • 3
  • product
  • 27
  • 3
  • segmentation
  • 20
  • 3
  • segment
  • 18
  • 3
  • market segmentation
  • 17
  • 3
  • group
  • 15
  • 3
  • company
  • 15
  • 3
  • marketing
  • 12
  • 3
  • market segment
  • 9
  • 3
  • consumer
  • 8
  • 3
  • business
  • 8
  • 3
  • analysi
  • 7
  • 3
  • target
  • 6
  • 3
  • identify
  • 6
  • 3
  • product line
  • 5
  • 3
  • essential
  • 5
  • 3
  • common
  • 5
  • 3
  • advertising
  • 5
  • 3
  • appeal
  • 5
  • 3
  • brand
  • 5
  • 3
  • marketing essential
  • 4
  • 3
  • age
  • 4
  • 3
  • demographic
  • 4
  • 3
  • strategy
  • 4
  • 3
  • enable
  • 4
  • 3
  • service
  • 4
  • 3
  • understanding
  • 4
  • 3
  • include
  • 4
  • 3
  • line
  • 4
  • 3
  • market segmentation market
  • 3
  • 3
  • segmentation market segmentation
  • 3
  • 3
  • khadija khartit
  • 3
  • 3
  • segmentation market
  • 3
  • 3
  • product service
  • 3
  • 3
  • targeted group
  • 3
  • 3
  • group consumer
  • 3
  • 3
  • resource effort
  • 3
  • 3
  • segment market
  • 3
  • 3
  • product differentiation
  • 3
  • 3
  • person
  • 3
  • 3
  • manufacturer
  • 3
  • 3
  • related
  • 3
  • 3
  • micromarketing
  • 3
  • 3
  • differentiation
  • 3
  • 3
Result 4
TitleMarket segmentation - Wikipedia
Urlhttps://en.wikipedia.org/wiki/Market_segmentation
Description
Date
Organic Position4
H1Market segmentation
H2Contents
Definition and brief explanation[edit]
History[edit]
Criticisms[edit]
Market segmentation strategy[edit]
Segmentation, targeting, positioning[edit]
Identifying the market to be segmented[edit]
Bases for segmenting consumer markets[edit]
Selecting target markets[edit]
Developing the marketing program and positioning strategy[edit]
Basis for segmenting business markets[edit]
Use in customer retention[edit]
Segmentation: algorithms and approaches[edit]
Companies (proprietary segmentation databases)[edit]
See also[edit]
References[edit]
External links[edit]
Navigation menu
H3Geographic segmentation[edit]
Demographic segmentation[edit]
Psychographic segmentation[edit]
Behavioural segmentation[edit]
Other types of consumer segmentation[edit]
Criteria for evaluating segment attractiveness[edit]
A-priori segmentation[edit]
Post-hoc segmentation[edit]
Statistical techniques used in segmentation[edit]
Data sources used for segmentation[edit]
Search
H2WithAnchorsContents
Definition and brief explanation[edit]
History[edit]
Criticisms[edit]
Market segmentation strategy[edit]
Segmentation, targeting, positioning[edit]
Identifying the market to be segmented[edit]
Bases for segmenting consumer markets[edit]
Selecting target markets[edit]
Developing the marketing program and positioning strategy[edit]
Basis for segmenting business markets[edit]
Use in customer retention[edit]
Segmentation: algorithms and approaches[edit]
Companies (proprietary segmentation databases)[edit]
See also[edit]
References[edit]
External links[edit]
Navigation menu
BodyMarket segmentation From Wikipedia, the free encyclopedia Jump to navigation Jump to search Process of dividing a broad consumer market into sub-groups with shared characteristics Marketing Marketing Marketing management Key concepts Distribution Pricing Retail Service Activation Brand licensing Brand management Co-creation Dominance Effectiveness Ethics Promotion Segmentation Strategy Account-based marketing Digital marketing Product marketing Social marketing Influencer marketing Attribution Annoyance factor Horizontal integration Vertical integration Promotional content Advertising Branding Corporate anniversary Direct marketing Loyalty marketing Mobile marketing On-hold messaging Personal selling Premiums Prizes Product placement Propaganda Publicity Sales promotion Sex in advertising Underwriting spot Promotional media Behavioral targeting Brand ambassador Display advertising Drip marketing In-game advertising Mobile advertising Native advertising New media Online advertising Out-of-home advertising Point of sale Product demonstration Promotional merchandise Promotional representative Visual merchandising Web banner Word-of-mouth Research Market research Marketing research Mystery shopping vte In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics. In dividing or segmenting markets, researchers typically look for common characteristics such as shared needs, common interests, similar lifestyles, or even similar demographic profiles. The overall aim of segmentation is to identify high yield segments – that is, those segments that are likely to be the most profitable or that have growth potential – so that these can be selected for special attention (i.e. become target markets). Many different ways to segment a market have been identified. Business-to-business (B2B) sellers might segment the market into different types of businesses or countries, while business-to-consumer (B2C) sellers might segment the market into demographic segments, such as lifestyle, behavior, or socioeconomic status. The STP approach highlights the three areas of decision-making Market segmentation assumes that different market segments require different marketing programs – that is, different offers, prices, promotion, distribution, or some combination of marketing variables. Market segmentation is not only designed to identify the most profitable segments, but also to develop profiles of key segments in order to better understand their needs and purchase motivations. Insights from segmentation analysis are subsequently used to support marketing strategy development and planning. Many marketers use the S-T-P approach; Segmentation → Targeting → Positioning to provide the framework for marketing planning objectives. That is, a market is segmented, one or more segments are selected for targeting, and products or services are positioned in a way that resonates with the selected target market or markets. Contents. 1 Definition and brief explanation 2 History 3 Criticisms 4 Market segmentation strategy 5 Segmentation, targeting, positioning 6 Identifying the market to be segmented 7 Bases for segmenting consumer markets 7.1 Geographic segmentation 7.2 Demographic segmentation 7.3 Psychographic segmentation 7.4 Behavioural segmentation 7.4.1 Purchase/usage occasion 7.4.2 Benefit-sought 7.4.3 Attitudinal segments 7.5 Other types of consumer segmentation 7.5.1 Generational segments 7.5.2 Cultural segmentation 7.5.3 Online customer segmentation 8 Selecting target markets 8.1 Criteria for evaluating segment attractiveness 8.1.1 Segment size and growth 8.1.2 Segment structural attractiveness 8.1.3 Company objectives and resources 9 Developing the marketing program and positioning strategy 10 Basis for segmenting business markets 11 Use in customer retention 12 Segmentation: algorithms and approaches 12.1 A-priori segmentation 12.2 Post-hoc segmentation 12.3 Statistical techniques used in segmentation 12.4 Data sources used for segmentation 12.4.1 Internal sources 12.4.2 External sources 13 Companies (proprietary segmentation databases) 14 See also 15 References 16 External links Definition and brief explanation[edit]. Market segmentation is the process of dividing up mass markets into groups with similar needs and wants.[1] The rationale for market segmentation is that in order to achieve competitive advantage and superior performance, firms should: "(1) identify segments of industry demand, (2) target specific segments of demand, and (3) develop specific 'marketing mixes' for each targeted market segment. "[2] From an economic perspective, segmentation is built on the assumption that heterogeneity in demand allows for demand to be disaggregated into segments with distinct demand functions.[3] History[edit]. The Model-T Ford (1921) is an early example of a mass marketing (undifferentiated segmentation) approach. Initially, it was produced only in black. The business historian, Richard S. Tedlow, identifies four stages in the evolution of market segmentation:[4] Fragmentation (pre-1880s): The economy was characterized by small regional suppliers who sold goods on a local or regional basis Unification or mass marketing (1880s–1920s): As transportation systems improved, the economy became unified. Standardized, branded goods were distributed at a national level. Manufacturers tended to insist on strict standardization in order to achieve scale economies to penetrate markets in the early stages of a product's lifecycle. e.g. the Model T Ford Segmentation (1920s–1980s): As market size increased, manufacturers were able to produce different models pitched at different quality points to meet the needs of various demographic and psychographic market segments. This is the era of market differentiation based on demographic, socio-economic, and lifestyle factors. Hyper-segmentation (post-1980s): a shift towards the definition of ever more narrow market segments. Technological advancements, especially in the area of digital communications, allow marketers to communicate with individual consumers or very small groups. This is sometimes known as one-to-one marketing. By the 1930s, Ford was producing Deluxe models in a range of colours such as this Ford Deluxe Coupe (1931) The practice of market segmentation emerged well before marketers thought about it at a theoretical level.[5] Archaeological evidence suggests that Bronze Age traders segmented trade routes according to geographical circuits.[6] Other evidence suggests that the practice of modern market segmentation was developed incrementally from the 16th century onwards. Retailers, operating outside the major metropolitan cities, could not afford to serve one type of clientele exclusively, yet retailers needed to find ways to separate the wealthier clientele from the "riff raff". One simple technique was to have a window opening out onto the street from which customers could be served. This allowed the sale of goods to the common people, without encouraging them to come inside. Another solution, that came into vogue from the late sixteenth century, was to invite favored customers into a back-room of the store, where goods were permanently on display. Yet another technique that emerged around the same time was to hold a showcase of goods in the shopkeeper's private home for the benefit of wealthier clients. Samuel Pepys, for example, writing in 1660, describes being invited to the home of a retailer to view a wooden jack.[7] The eighteenth-century English entrepreneurs, Josiah Wedgewood and Matthew Boulton, both staged expansive showcases of their wares in their private residences or in rented halls to which only the upper classes were invited while Wedgewood used a team of itinerant salesmen to sell wares to the masses.[8] Evidence of early marketing segmentation has also been noted elsewhere in Europe. A study of the German book trade found examples of both product differentiation and market segmentation in the 1820s.[9] From the 1880s, German toy manufacturers were producing models of tin toys for specific geographic markets; London omnibuses and ambulances destined for the British market; French postal delivery vans for Continental Europe and American locomotives intended for sale in America.[10] Such activities suggest that basic forms of market segmentation have been practiced since the 17th century and possibly earlier. Contemporary market segmentation emerged in the first decades of the twentieth century as marketers responded to two pressing issues. Demographic and purchasing data were available for groups but rarely for individuals and secondly, advertising and distribution channels were available for groups, but rarely for single consumers. Between 1902 and 1910, George B Waldron, working at Mahin's Advertising Agency in the United States used tax registers, city directories, and census data to show advertisers the proportion of educated vs illiterate consumers and the earning capacity of different occupations, etc. in a very early example of simple market segmentation.[11][12] In 1924 Paul Cherington developed the 'ABCD' household typology; the first socio-demographic segmentation tool.[11][13] By the 1930s, market researchers such as Ernest Dichter recognized that demographics alone were insufficient to explain different marketing behaviours and began exploring the use of lifestyles, attitudes, values, beliefs and culture to segment markets.[14] With access to group-level data only, brand marketers approached the task from a tactical viewpoint. Thus, segmentation was essentially a brand-driven process. Wendell R. Smith is generally credited with being the first to introduce the concept of market segmentation into the marketing literature in 1956 with the publication of his article, "Product Differentiation and Market Segmentation as Alternative Marketing Strategies."[15] Smith's article makes it clear that he had observed "many examples of segmentation" emerging and to a certain extent saw this as a "natural force" in the market that would "not be denied."[16] As Schwarzkopf points out, Smith was codifying implicit knowledge that had been used in advertising and brand management since at least the 1920s.[17] Until relatively recently, most segmentation approaches have retained a tactical perspective in that they address immediate short-term decisions; such as describing the current “market served” and are concerned with informing marketing mix decisions. However, with the advent of digital communications and mass data storage, it has been possible for marketers to conceive of segmenting at the level of the individual consumer. Extensive data is now available to support segmentation at very narrow groups or even for the single customer, allowing marketers to devise a customised offer with an individual price which can be disseminated via real-time communications.[18] Some scholars have argued that the fragmentation of markets has rendered traditional approaches to market segmentation less useful.[19] Criticisms[edit]. The limitations of conventional segmentation have been well documented in the literature.[20] Perennial criticisms include: That it is no better than mass marketing at building brands[21] That in competitive markets, segments rarely exhibit major differences in the way they use brands[22] That it fails to identify sufficiently narrow clusters[23] Geographic/demographic segmentation is overly descriptive and lacks sufficient insights into the motivations necessary to drive communications strategy[24] Difficulties with market dynamics, notably the instability of segments over time[25][26] and structural change which leads to segment creep and membership migration as individuals move from one segment to another[27] Market segmentation has many critics. But in spite of its limitations, market segmentation remains one of the enduring concepts in marketing and continues to be widely used in practice. One American study, for example, suggested that almost 60 percent of senior executives had used market segmentation in the past two years.[28] Market segmentation strategy[edit]. See also: Niche market and Porter's generic strategies A key consideration for marketers is whether to segment or not to segment. Depending on company philosophy, resources, product type, or market characteristics, a business may develop an undifferentiated approach or differentiated approach. In an undifferentiated approach, the marketer ignores segmentation and develops a product that meets the needs of the largest number of buyers.[29] In a differentiated approach the firm targets one or more market segments, and develops separate offers for each segment.[29] Even simple products like salt, which might be considered as commodities, are highly differentiated in practice. In consumer marketing, it is difficult to find examples of undifferentiated approaches. Even goods such as salt and sugar, which were once treated as commodities, are now highly differentiated. Consumers can purchase a variety of salt products; cooking salt, table salt, sea salt, rock salt, kosher salt, mineral salt, herbal or vegetable salts, iodized salt, salt substitutes, and many more. Sugar also comes in many different types - cane sugar, beet sugar, raw sugar, white refined sugar, brown sugar, caster sugar, sugar lumps, icing sugar (also known as milled sugar), sugar syrup, invert sugar, and a plethora of sugar substitutes including smart sugar which is essentially a blend of pure sugar and a sugar substitute. Each of these product types is designed to meet the needs of specific market segments. Invert sugar and sugar syrups, for example, are marketed to food manufacturers where they are used in the production of conserves, chocolate, and baked goods. Sugars marketed to consumers appeal to different usage segments – refined sugar is primarily for use on the table, while caster sugar and icing sugar are primarily designed for use in home-baked goods. Different types of sugar: clockwise from top-left: White refined, unrefined, brown, unprocessed cane Main Strategic Approaches to Segmentation[30] Number of segments Segmentation strategy Comments Zero Undifferentiated strategy Mass marketing: no segmentation One Focus strategy Niche marketing: focus efforts on a small, tightly defined target market Two or more Differentiated strategy Multiple niches: focus efforts on 2 or more, tightly defined targets Thousands Hypersegmentation One-to-one marketing: customise the offer for each individual customer A number of factors are likely to affect a company's segmentation strategy:[31] Company resources: When resources are restricted, a concentrated strategy may be more effective. Product variability: For highly uniform products (such as sugar or steel) undifferentiated marketing may be more appropriate. For products that can be differentiated, (such as cars) then either a differentiated or concentrated approach is indicated. Product life cycle: For new products, one version may be used at the launch stage, but this may be expanded to a more segmented approach over time. As more competitors enter the market, it may be necessary to differentiate. Market characteristics: When all buyers have similar tastes or are unwilling to pay a premium for different quality, then undifferentiated marketing is indicated. Competitive activity: When competitors apply differentiated or concentrated market segmentation, using undifferentiated marketing may prove to be fatal. A company should consider whether it can use a different market segmentation approach Segmentation, targeting, positioning[edit]. The process of segmenting the market is deceptively simple. Seven basic steps describe the entire process including segmentation, targeting, and positioning. In practice, however, the task can be very laborious since it involves poring over voluminous data, and requires a great deal of skill in analysis, interpretation, and some judgment. Although a great deal of analysis needs to be undertaken, and many decisions need to be made, marketers tend to use the so-called S-T-P process, that is Segmentation→ Targeting → Positioning, as a broad framework for simplifying the process.[32] Segmentation comprises identifying the market to be segmented; identification, selection, and application of bases to be used in that segmentation; and development of profiles. Targeting comprises an evaluation of each segment's attractiveness and selection of the segments to be targeted. Positioning comprises the identification of optimal position and development of the marketing program. Perhaps the most important marketing decision a firm makes is the selection of one or more market segments on which to focus. A market segment is a portion of a larger market whose needs differ somewhat from the larger market. Since a market segment has unique needs, a firm that develops a total product focused solely on the needs of that segment will be able to meet the segment’s desires better than a firm whose product or service attempts to meet the needs of multiple segments.[33] Identifying the market to be segmented[edit]. See also: Serviceable available market The market for a given product or service known as the market potential or the total addressable market (TAM). Given that this is the market to be segmented, the market analyst should begin by identifying the size of the potential market. For existing products and services, estimating the size and value of the market potential is relatively straightforward. However, estimating the market potential can be very challenging when a product or service is totally new to the market and no historical data on which to base forecasts exists. A basic approach is to first assess the size of the broad population, then estimate the percentage likely to use the product or service and finally to estimate the revenue potential. To estimate market size, a marketer might evaluate the adoption and growth rates of comparable technologies (historical analogy method). Another approach is to use a historical analogy.[34] For example, the manufacturer of HDTV might assume that the number of consumers willing to adopt high definition TV will be similar to the adoption rate for Color TV. To support this type of analysis, data for household penetration of TV, Radio, PCs, and other communications technologies is readily available from government statistics departments. Finding useful analogies can be challenging because every market is unique. However, analogous product adoption and growth rates can provide the analyst with benchmark estimates, and can be used to cross-validate other methods that might be used to forecast sales or market size. A more robust technique for estimating the market potential is known as the Bass diffusion model, the equation for which follows:[35] N(t) – N(t−1) = [p + qN(t−1)/m] × [m – N(t−1)] Where: N(t)= the number of adopters in the current time period, (t) N(t−1)= the number of adopters in the previous time period, (t-1) p = the coefficient of innovation q = the coefficient of imitation (the social contagion influence) m = an estimate of the number of eventual adopters The major challenge with the Bass model is estimating the parameters for p and q. However, the Bass model has been so widely used in empirical studies that the values of p and q for more than 50 consumer and industrial categories have been determined and are widely published in tables.[36] The average value for p is 0.037 and for q is 0.327. Bases for segmenting consumer markets[edit]. Major bases used for segmenting a market A major step in the segmentation process is the selection of a suitable base. In this step, marketers are looking for a means of achieving internal homogeneity (similarity within the segments), and external heterogeneity (differences between segments).[37] In other words, they are searching for a process that minimizes differences between members of a segment and maximizes differences between each segment. In addition, the segmentation approach must yield segments that are meaningful for the specific marketing problem or situation. For example, a person's hair color may be a relevant base for a shampoo manufacturer, but it would not be relevant for a seller of financial services. Selecting the right base requires a good deal of thought and a basic understanding of the market to be segmented. In reality, marketers can segment the market using any base or variable provided that it is identifiable, substantial, responsive, actionable and stable.[38] Identifiability refers to the extent to which managers can identify or recognize distinct groups within the marketplace Substantiality refers to the extent to which a segment or group of customers represents a sufficient size to be profitable. This could mean sufficiently large in number of people or in purchasing power Accessibility refers to the extent to which marketers can reach the targeted segments with promotional or distribution efforts Responsiveness refers to the extent to which consumers in a defined segment will respond to marketing offers targeted at them Actionable – segments are said to be actionable when they provide guidance for marketing decisions.[39] For example, although dress size is not a standard base for segmenting a market, some fashion houses have successfully segmented the market using women's dress size as a variable.[40] However, the most common bases for segmenting consumer markets include: geographics, demographics, psychographics, and behaviour. Marketers normally select a single base for the segmentation analysis, although, some bases can be combined into a single segmentation with care. For example, geographics and demographics are often combined, but other bases are rarely combined. Given that psychographics includes demographic variables such as age, gender, and income as well as attitudinal and behavioural variables, it makes little logical sense to combine psychographics with demographics or other bases. Any attempt to use combined bases needs careful consideration and a logical foundation. Segmentation base Brief explanation of base (and example) Typical segments examples Demographic Quantifiable population characteristics. ( age, gender, income, education, socio-economic status, family size or situation). Young, Upwardly-mobile, Prosperous, Professionals (YUPPY); Double Income No Kids (DINKS); Greying, Leisured And Moneyed (GLAMS); Empty- nester, Full-nester Geographic Physical location or region ( country, state, region, city, suburb, postcode). New Yorkers; Remote, outback Australians; Urbanites, Inner-city dwellers Geo-demographic or geoclusters Combination of geographic & demographic variables. Rural farmers, Urban professionals, 'sea-changers', 'tree-changers' Psychographics Lifestyle, social or personality characteristics. (typically includes basic demographic descriptors) Socially Aware; Traditionalists, Conservatives, Active 'club-going' young professionals Behavioural Purchasing, consumption or usage behaviour. ( Needs-based, benefit-sought, usage occasion, purchase frequency, customer loyalty, buyer readiness). Tech-savvy (aka tech-heads); Heavy users, Enthusiasts; Early adopters, Opinion Leaders, Luxury-seekers, Price-conscious, Quality-conscious, Time-poor Contextual and situational The same consumer changes in their attractiveness to marketers based on context and situation. This is particularly used in digital targeting via programmatic bidding approaches Actively shopping, just entering into a life change event, being physically in a certain location, or at a particular retailer which is known from GPS data via smartphones. The following sections provide a detailed description of the most common forms of consumer market segmentation. Geographic segmentation[edit]. Geographic segmentation divides markets according to geographic criteria. In practice, markets can be segmented as broadly as continents and as narrowly as neighborhoods or postal codes.[41] Typical geographic variables include: Country Brazil, Canada, China, France, Germany, India, Italy, Japan, UK, US Region North, North-west, Mid-west, South, Central Population density: central business district (CBD), urban, suburban, rural, regional City or town size: under 1,000; 1,000–5,000; 5,000–10,000 ... 1,000,000–3,000,000 and over 3,000,000 Climatic zone: Mediterranean, Temperate, Sub-Tropical, Tropical, Polar The geo-cluster approach (also called geodemographic segmentation) combines demographic data with geographic data to create richer, more detailed profiles.[42] Geo-cluster approaches are a consumer classification system designed for market segmentation and consumer profiling purposes. They classify residential regions or postcodes on the basis of census and lifestyle characteristics obtained from a wide range of sources. This allows the segmentation of a population into smaller groups defined by individual characteristics such as demographic, socio-economic, or other shared socio-demographic characteristics. Geographic segmentation may be considered the first step in international marketing, where marketers must decide whether to adapt their existing products and marketing programs for the unique needs of distinct geographic markets. Tourism Marketing Boards often segment international visitors based on their country of origin. A number of proprietary geo-demographic packages are available for commercial use. Geographic segmentation is widely used in direct marketing campaigns to identify areas that are potential candidates for personal selling, letter-box distribution, or direct mail. Geo-cluster segmentation is widely used by Governments and public sector departments such as urban planning, health authorities, police, criminal justice departments, telecommunications, and public utility organizations such as water boards.[43] Demographic segmentation[edit]. Further information: Demographic targeting Segmentation according to demography is based on consumer- demographic variables such as age, income, family size, socio-economic status, etc.[44] Demographic segmentation assumes that consumers with similar demographic profiles will exhibit similar purchasing patterns, motivations, interests, and lifestyles and that these characteristics will translate into similar product/brand preferences.[45] In practice, demographic segmentation can potentially employ any variable that is used by the nation's census collectors. Typical demographic variables and their descriptors are as follows: Age: Under 5, 5–8 years, 9–12 years, 13–17 years, 18–24, 25–29, 30–39, 40–49, 50–59, 60+[46] Gender: Male, Female[47] Occupation: Professional, self-employed, semi-professional, clerical/ admin, sales, trades, mining, primary producer, student, home duties, unemployed, retired[48] Socio-economic: A, B, C, D, E, or I, II, III, IV or V (normally divided into quintiles)[49] Marital Status: Single, married, divorced, widowed Family Life-stage: Young single; Young married with no children; Young family with children under 5 years; Older married with children; Older married with no children living at home, Older living alone[50] Family size/ number of dependants: 0, 1–2, 3–4, 5+ Income: Under $10,000; 10,000–20,000; 20,001–30,000; 30,001–40,000, 40,001–50,000 etc. Educational attainment: Primary school; Some secondary, Completed secondary, Some university, Degree; Post graduate or higher degree Home ownership: Renting, Own home with mortgage, Home owned outright Ethnicity: Asian, African, Aboriginal, Polynesian, Melanesian, Latin-American, African-American, American Indian, etc. Religion: Catholic, Protestant, Muslim, Jewish, Buddhist, Hindu, Other In practice, most demographic segmentation utilizes a combination of demographic variables. Visualisation of two approaches to demographic segmentation using one and two variables. On the left, a single variable (age) is used. On the right, two variables (income and occupation) are used to form the segments. The use of multiple segmentation variables normally requires analysis of databases using sophisticated statistical techniques such as cluster analysis or principal components analysis. These types of analysis require very large sample sizes. However, data collection is expensive for individual firms. For this reason, many companies purchase data from commercial market research firms, many of whom develop proprietary software to interrogate the data. The labels applied to some of the more popular demographic segments began to enter the popular lexicon in the 1980s.[51][52][53] These include the following:[54][55] DINK: Double (or dual) Income, No Kids, describes one member of a couple with above-average household income and no dependent children, tend to exhibit discretionary expenditure on luxury goods and entertainment and dining out GLAM: Greying, Leisured and Moneyed. Retired older persons, asset rich, and high income. Tend to exhibit higher spending on recreation, travel, and entertainment GUPPY: (aka GUPPIE) Gay, Upwardly Mobile, Prosperous, Professional; blend of gay and YUPPY (can also refer to the London-based equivalent of YUPPY) MUPPY: (aka MUPPIE) Mid-aged, Upwardly Mobile, Prosperous, Professional Preppy: (American) Well educated, well-off, upper-class young persons; a graduate of an expensive school. Often distinguished by a style of dress. SITKOM: Single Income, Two Kids, Oppressive Mortgage. Tend to have very little discretionary income, struggle to make ends meet Tween: Young person who is approaching puberty, aged approximately 9–12 years; too old to be considered a child, but too young to be a teenager; they are 'in between'. WASP: (American) White, Anglo-Saxon Protestant. Tend to be high-status and influential white Americans of English Protestant ancestry. YUPPY: (aka yuppie) Young, Urban/ Upwardly-mobile, Prosperous, Professional. Tend to be well-educated, career-minded, ambitious, affluent, and free spenders. Psychographic segmentation[edit]. Main article: Psychographic segmentation Psychographic segmentation, which is sometimes called psychometric or lifestyle segmentation, is measured by studying the activities, interests, and opinions (AIOs) of customers. It considers how people spend their leisure,[56] and which external influences they are most responsive to and influenced by. Psychographics is a very widely used basis for segmentation, because it enables marketers to identify tightly defined market segments and better understand consumer motivations for product or brand choice. While many of these proprietary psychographic segmentation analyses are well-known, the majority of studies based on psychographics are custom designed. That is, the segments are developed for individual products at a specific time. One common thread among psychographic segmentation studies is that they use quirky names to describe the segments.[57] Behavioural segmentation[edit]. Behavioural segmentation divides consumers into groups according to their observed behaviours. Many marketers believe that behavioural variables are superior to demographics and geographics for building market segments[58] and some analysts have suggested that behavioural segmentation is killing off demographics.[59] Typical behavioural variables and their descriptors include:[60] Purchase/Usage Occasion: regular occasion, special occasion, festive occasion, gift-giving Benefit-Sought: economy, quality, service level, convenience, access User Status: First-time user, Regular user, Non-user Usage Rate/Purchase Frequency: Light user, heavy user, moderate user Loyalty Status: Loyal, switcher, non-loyal, lapsed Buyer Readiness: Unaware, aware, intention to buy Attitude to Product or Service: Enthusiast, Indifferent, Hostile; Price Conscious, Quality Conscious Adopter Status: Early adopter, late adopter, laggard Scanner data from super market or credit card information data[61] Note that these descriptors are merely commonly used examples. Marketers customize the variable and descriptors for both local conditions and for specific applications. For example, in the health industry, planners often segment broad markets according to 'health consciousness' and identify low, moderate, and highly health conscious segments. This is an applied example of behavioural segmentation, using attitude to product or service as a key descriptor or variable which has been customized for the specific application. Purchase/usage occasion[edit]. Purchase or usage occasion segmentation focuses on analyzing occasions when consumers might purchase or consume a product. This approach customer-level and occasion-level segmentation models and provides an understanding of the individual customers’ needs, behaviour, and value under different occasions of usage and time. Unlike traditional segmentation models, this approach assigns more than one segment to each unique customer, depending on the current circumstances they are under. Benefit-sought[edit]. Benefit segmentation (sometimes called needs-based segmentation) was developed by Grey Advertising in the late 1960s.[62] The benefits-sought by purchasers enables the market to be divided into segments with distinct needs, perceived value, benefits sought, or advantage that accrues from the purchase of a product or service. Marketers using benefit segmentation might develop products with different quality levels, performance, customer service, special features, or any other meaningful benefit and pitch different products at each of the segments identified. Benefit segmentation is one of the more commonly used approaches to segmentation and is widely used in many consumer markets including motor vehicles, fashion and clothing, furniture, consumer electronics, and holiday-makers.[63] Loker and Purdue, for example, used benefit segmentation to segment the pleasure holiday travel market. The segments identified in this study were the naturalists, pure excitement seekers, escapists.[64] Attitudinal segments[edit]. Attitudinal segmentation provides insight into the mindset of customers, especially the attitudes and beliefs that drive consumer decision-making and behaviour. An example of attitudinal segmentation comes from the UK's Department of Environment which segmented the British population into six segments, based on attitudes that drive behaviour relating to environmental protection:[65] Greens: Driven by the belief that protecting the environment is critical; try to conserve whenever they can Conscious with a conscience: Aspire to be green; primarily concerned with wastage; lack awareness of other behaviours associated with broader environmental issues such as climate change Currently constrained: Aspire to be green but feel they cannot afford to purchase organic products; pragmatic realists Basic contributors: Skeptical about the need for behaviour change; aspire to conform to social norms; lack awareness of social and environmental issues Long-term resistance: Have serious life priorities that take precedence before a behavioural change is a consideration; their everyday behaviours often have a low impact on the environment, but for other reasons than conservation Disinterested: View greenies as an eccentric minority; exhibit no interest in changing their behaviour; may be aware of climate change but have not internalized it to the extent that it enters their decision-making process. Other types of consumer segmentation[edit]. In addition to geographics, demographics, psychographics, and behavioural bases, marketers occasionally turn to other means of segmenting the market, or to develop segment profiles. Generational segments[edit]. A generation is defined as "a cohort of people born within a similar span of time (15 years at the upper end) who share a comparable age and life stage and who were shaped by a particular span of time (events, trends, and developments)."[66] Generational segmentation refers to the process of dividing and analyzing a population into cohorts based on their birth date. Generational segmentation assumes that people's values and attitudes are shaped by the key events that occurred during their lives and that these attitudes translate into product and brand preferences. Demographers, studying population change, disagree about precise dates for each generation.[67] Dating is normally achieved by identifying population peaks or troughs, which can occur at different times in each country. For example, in Australia the post-war population boom peaked in 1960,[68] while the peak occurred somewhat later in the US and Europe,[69] with most estimates converging on 1964. Accordingly, Australian Boomers are normally defined as those born between 1945–1960; while American and European Boomers are normally defined as those born between 1946–64. Thus, the generational segments and their dates discussed here must be taken as approximations only. The primary generational segments identified by marketers are:[70] Builders: born 1920 to 1945 Baby boomers: born about 1946–1964 Generation X: born about 1965–1980 Generation Y, also known as Millennials; born about 1981–1996 Generation Z, also known as Zoomers; born 1997–2012 Unique characteristics of selected generations[71] Millennials Generation X Baby Boomers Technology use 24% Technology use 12% Work ethic 17% Music/ popular culture 11% Work ethic 11% Respectful 14% Liberal/ tolerant 7% Conservative/ traditional 7% Values/ morals 8% Smarter 6% Smarter 6% Smarter 5% Clothes 5% Respectful 5% N/A — Cultural segmentation[edit]. Cultural segmentation is used to classify markets according to the cultural origin. Culture is a major dimension of consumer behaviour and can be used to enhance customer insight and as a component of predictive models. Cultural segmentation enables appropriate communications to be crafted for particular cultural communities. Cultural segmentation can be applied to existing customer data to measure market penetration in key cultural segments by product, brand, channel as well as traditional measures of recency, frequency, and monetary value. These benchmarks form an important evidence-base to guide strategic direction and tactical campaign activity, allowing engagement trends to be monitored over time.[72] Cultural segmentation can be combined with other bases, especially geographics so that segments are mapped according to state, region, suburb, and neighborhood. This provides a geographical market view of population proportions and may be of benefit in selecting appropriately located premises, determining territory boundaries, and local marketing activities. Census data is a valuable source of cultural data but cannot meaningfully be applied to individuals. Name analysis (onomastics) is the most reliable and efficient means of describing the cultural origin of individuals. The accuracy of using name analysis as a surrogate for cultural background in Australia is 80–85%, after allowing for female name changes due to marriage, social or political reasons, or colonial influence. The extent of name data coverage means a user will code a minimum of 99 percent of individuals with their most likely ancestral origin. Online customer segmentation[edit]. Online market segmentation is similar to the traditional approaches in that the segments should be identifiable, substantial, accessible, stable, differentiable, and actionable.[73] Customer data stored in online data management systems such as a CRM or DMP enables the analysis and segmentation of consumers across a diverse set of attributes.[74] Forsyth et al., in an article 'Internet research' grouped current active online consumers into six groups: Simplifiers, Surfers, Bargainers, Connectors, Routiners, and Sportsters. The segments differ regarding four customers' behaviours, namely:[75] The amount of time they actively spend online, The number of pages and sites they access, The time they spend actively viewing each page, And the kinds of sites they visit. For example, Simplifiers make over 50 percent of all online transactions. Their main characteristic is that they need easy (one-click) access to information and products as well as easy and quickly available service regarding products. Amazon.com is an example of a company that created an online environment for Simplifiers. They also 'dislike unsolicited e-mail, uninviting chat rooms, pop-up windows intended to encourage impulse buys, and other features that complicate their on- and off-line experience'. Surfers like to spend a lot of time online, thus companies must have a variety of products to offer and constant update, Bargainers are looking for the best price, Connectors like to relate to others, Routiners want content and Sportsters like sport and entertainment sites. Selecting target markets[edit]. Main article: Target market See also: Market analysis In targeting, a group of consumers is selected to become the focus of the marketing program Another major decision in developing the segmentation strategy is the selection of market segments that will become the focus of special attention (known as target markets). The marketer faces a number of important decisions: What criteria should be used to evaluate markets? How many markets to enter (one, two or more)? Which market segments are the most valuable? When a marketer enters more than one market, the segments are often labeled the primary target market, secondary target market. The primary market is the target market selected as the main focus of marketing activities. The secondary target market is likely to be a segment that is not as large as the primary market, but has growth potential. Alternatively, the secondary target group might consist of a small number of purchasers that account for a relatively high proportion of sales volume perhaps due to purchase value or purchase frequency. In terms of evaluating markets, three core considerations are essential:[76] Segment size and growth Segment structural attractiveness Company objectives and resources. Criteria for evaluating segment attractiveness[edit]. There are no formulas for evaluating the attractiveness of market segments and a good deal of judgment must be exercised.[77] Nevertheless, a number of considerations can be used to assist in evaluating market segments for overall attractiveness. The following lists a series of questions that can be asked. Segment size and growth[edit]. How large is the market? Is the market segment substantial enough to be profitable? (Segment size can be measured in the number of customers, but superior measures are likely to include sales value or volume) Is the market segment growing or contracting? What are the indications that growth will be sustained in the long term? Is any observed growth sustainable? Is the segment stable over time? (Segment must have sufficient time to reach desired performance level) Segment structural attractiveness[edit]. To what extent are competitors targeting this market segment? Do buyers have bargaining power in the market? Are substitute products available? Can we carve out a viable position to differentiate from any competitors? How responsive are members of the market segment to the marketing program? Is this market segment reachable and accessible? (i.e., with respect to distribution and promotion) Company objectives and resources[edit]. Is this market segment aligned with our company's operating philosophy? Do we have the resources necessary to enter this market segment? Do we have prior experience with this market segment or similar market segments? Do we have the skills and/or know-how to enter this market segment successfully? Developing the marketing program and positioning strategy[edit]. See also: Marketing mix, Positioning (marketing), and Perceptual mapping The marketing program is designed with the needs of the target market in mind When the segments have been determined and separate offers developed for each of the core segments, the marketer's next task is to design a marketing program (also known as the marketing mix) that will resonate with the target market or markets. Developing the marketing program requires a deep knowledge of key market segment's purchasing habits, their preferred retail outlet, their media habits, and their price sensitivity. The marketing program for each brand or product should be based on the understanding of the target market (or target markets) revealed in the market profile. Positioning is the final step in the S-T-P planning approach; Segmentation → Targeting → Positioning; a core framework for developing marketing plans and setting objectives. Positioning refers to decisions about how to present the offer in a way that resonates with the target market. During the research and analysis that forms the central part of segmentation and targeting, the marketer will have gained insights into what motivates consumers to purchase a product or brand. These insights will form part of the positioning strategy. According to advertising guru, David Ogilvy, "Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market. The goal is to locate the brand in the minds of consumers to maximize the potential benefit to the firm. A good brand positioning helps guide marketing strategy by clarifying the brand’s essence, what goals it helps the consumer achieve, and how it does so in a unique way."[78] Perceptual map of the U.S. motor vehicle category The technique known as perceptual mapping is often used to understand consumers' mental representations of brands within a given category. Traditionally two variables (often, but not necessarily, price and quality) are used to construct the map. A sample of people in the target market are asked to explain where they would place various brands in terms of the selected variables. Results are averaged across all respondents, and results are plotted on a graph, as illustrated in the figure. The final map indicates how the average member of the population views the brand that makes up a category and how each of the brands relates to other brands within the same category. While perceptual maps with two dimensions are common, multi-dimensional maps are also used. There are a number of different approaches to positioning:[79] Against a competitor Within a category According to product benefit According to product attribute For usage occasion Along price lines e.g. a luxury brand or premium brand For a user Cultural symbols e.g. Australia's Easter Bilby (as a culturally appropriate alternative to the Easter Bunny). Basis for segmenting business markets[edit]. See also: Industrial market segmentation Segmenting business markets is more straightforward than segmenting consumer markets. Businesses may be segmented according to industry, business size, business location, turnover, number of employees, company technology, purchasing approach, or any other relevant variables.[80] The most widely used segmentation bases used in business to business markets are geographics and firmographics.[81] The most widely used bases for segmenting business markets are: Geographic segmentation occurs when a firm seeks to identify the most promising geographic markets to enter. Business can tap into business census type products published by Government departments to identify geographic regions that meet certain predefined criteria. Firmographics (also known as emporographics or feature based segmentation) is the business community's answer to demographic segmentation. It is commonly used in business-to-business markets (an estimated 81% of B2B marketers use this technique). Under this approach the target market is segmented based on features such as company size, industry sector or location usage rate, purchase frequency, number of years in business, ownership factors and buying situation.[82][81] Key firmographic variables: standard industry classification (SIC); company size (either in terms of revenue or number of employees), industry sector or location (country and/or region), usage rate, purchase frequency, number of years in business, ownership factors and buying situation Use in customer retention[edit]. See also: Relationship marketing The basic approach to retention-based segmentation is that a company tags each of its active customers on four axes: Risk of customer cancellation of company service One of the most common indicators of high-risk customers is a drop off in usage of the company's service. For example, in the credit card industry, this could be signaled through a customer's decline in spending on his or her card. Risk of customer switching to a competitor Many times customers move purchase preferences to a competitor brand. This may happen for many reasons those of which can be more difficult to measure. It is many times beneficial for the former company to gain meaningful insights, through data analysis, as to why this change of preference has occurred. Such insights can lead to effective strategies for winning back the customer or on how not to lose the target customer in the first place. Customer retention worthiness This determination boils down to whether the post-retention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer and includes evaluation of customer lifecycles.[83][84] This analysis of customer lifecycles is usually included in the growth plan of a business to determine which tactics to implement to retain or let go of customers.[85] Tactics commonly used range from providing special customer discounts to sending customers communications that reinforce the value proposition of the given service. Segmentation: algorithms and approaches[edit]. The choice of an appropriate statistical method for the segmentation depends on a number of factors including, the broad approach (a-priori or post-hoc), the availability of data, time constraints, the marketer's skill level, and resources.[86] A-priori segmentation[edit]. A priori research occurs when "a theoretical framework is developed before the research is conducted".[87] In other words, the marketer has an idea about whether to segment the market geographically, demographically, psychographically or behaviourally before undertaking any research. For example, a marketer might want to learn more about the motivations and demographics of light and moderate users in an effort to understand what tactics could be used to increase usage rates. In this case, the target variable is known – the marketer has already segmented using a behavioural variable – user status. The next step would be to collect and analyze attitudinal data for light and moderate users. The typical analysis includes simple cross-tabulations, frequency distributions and occasionally logistic regression or one of a number of proprietary methods.[88] The main disadvantage of a-priori segmentation is that it does not explore other opportunities to identify market segments that could be more meaningful. Post-hoc segmentation[edit]. In contrast, post-hoc segmentation makes no assumptions about the optimal theoretical framework. Instead, the analyst's role is to determine the segments that are the most meaningful for a given marketing problem or situation. In this approach, the empirical data drives the segmentation selection. Analysts typically employ some type of clustering analysis or structural equation modeling to identify segments within the data. Post-hoc segmentation relies on access to rich datasets, usually with a very large number of cases and uses sophisticated algorithms to identify segments.[89] The figure alongside illustrates how segments might be formed using clustering; however, note that this diagram only uses two variables, while in practice clustering employs a large number of variables.[90] Statistical techniques used in segmentation[edit]. Marketers often engage commercial research firms or consultancies to carry out segmentation analysis, especially if they lack the statistical skills to undertake the analysis. Some segmentation, especially post-hoc analysis, relies on sophisticated statistical analysis. Visualisation of market segments formed using clustering methods Common statistical approaches and techniques used in segmentation analysis include: Clustering algorithms[91] – overlapping, non-overlapping and fuzzy methods; e.g. K-means or other Cluster analysis Conjoint analysis[92] Ensemble approaches – such as random forests[93] Chi-square automatic interaction detection – a type of decision-tree[94] Factor analysis or principal components analysis[95] Latent Class Analysis – a generic term for a class of methods that attempt to detect underlying clusters based on observed patterns of association[96] Logistic regression[97] Multidimensional scaling and canonical analysis[98] Mixture models – e.g., EM estimation algorithm, finite-mixture models[99] Model-based segmentation using simultaneous and structural equation modeling[100] e.g. LISREL Other algorithms such as artificial neural networks.[101] Data sources used for segmentation[edit]. Marketers use a variety of data sources for segmentation studies and market profiling. Typical sources of information include:[102][103] Internal sources[edit]. Customer transaction records e.g. sale value per transaction, purchase frequency Patron membership records e.g. active members, lapsed members, length of membership Customer relationship management (CRM) databases In-house surveys Customer self-completed questionnaires or feedback forms External sources[edit]. Commissioned research (where the business commissions a research study and maintains exclusive rights to the data; typically the most expensive means of data collection) Data-mining techniques Census data (population and business census) Observed purchase behaviours Government agencies and departments Government statistics and surveys (e.g. studies by departments of trade, industry, technology, etc.) Omnibus surveys (a standard, regular survey with a basic set of questions about demographics and lifestyles where an individual can add specific sets of questions about product preference or usage; generally lower cost than commissioned survey methods) Professional/Industry associations/Employer associations Proprietary surveys or tracking studies (also known as syndicated research; studies carried out by market research companies where business can purchase the right to access part of the data set) Proprietary databases/software[104] Companies (proprietary segmentation databases)[edit]. Acorn – geo-demographic segmentation[105] Claritas Prizm – geo-demographic segmentation[106] CanaCode Lifestyle Clusters - geo-demographic and psychographic segmentation[107] Experian – geo-demographic segmentation Mosaic – geo-demographic segmentation Roy Morgan Research Values Segments -psychographic/ psychometric[108] VALS-psychographic/ psychometric Values Modes-psychographic/ psychometric See also[edit]. Marketing § Segmentation Market analysis § Market segmentation Attitudinal targeting Behavioural targeting Demographic profile Demographic targeting Geo-targeting Geodemographic segmentation Mass marketing Marketing strategy Microsegment Niche market Persona Positioning (marketing) Precision marketing Precision marketing Product differentiation Psychographics Sagacity segmentation Segmenting and positioning Serviceable available market Target audience Targeted advertising Total addressable market References[edit]. ^ Pride, W., Ferrell, O.C., Lukas, B.A., Schembri, S., Niininen, O. and Cassidy, R., Marketing Principles, 3rd Asia-Pacific ed, Cengage, 2018, p. 200 ^ Madhavaram, S., & Hunt, S. D., "The Service-dominant Logic and a Hierarchy of Operant Resources: Developing Masterful Operant Resources and Implications for Marketing Strategy, " Journal Of The Academy Of Marketing Science, Vol. 36, No. 1, 2008, pp 67-82. ^ Dickson, Peter R.; Ginter, James L., "Market Segmentation, Product Differentiation, and Marketing Strategy, " Journal of Marketing, Vol. 51, No. 2, 1987, p. 1 ^ In New and Improved: The Story of Mass Marketing in America, Basic Books, N.Y. 1990 pp. 4–12, Richard Tedlow outlines first three stages: fragmentation, unification and segmentation. In a subsequent work, published three years later, Tedlow and his co-author thought that they had seen evidence of a new trend and added a fourth era, termed Hyper-segmentation (post 1980s); See Tedlow, R.A. and Jones, G., The Rise and Fall of Mass Marketing, Routledge, N.Y., 1993, Chapter 2 ^ Fullerton, R., "Segmentation in Practice: An Overview of the Eighteenth and Nineteenth Centuries," in Jones, D.G.B. and Tadajewski, M. (eds), The Routledge Companion to Marketing History, Oxon, Routledge, 2016, p. 94 ^ Alberti, M. E., "Trade and Weighing Systems in the Southern Aegean from the Early Bronze Age to the Iron Age: How Changing Circuits Influenced Glocal Measures," in Molloy, B. (ed.), Of Odysseys and Oddities: Scales and Modes of Interaction Between Prehistoric Aegean Societies and their Neighbours, [Sheffield Studies in Aegean Archaeology], Oxford, Oxbow, (E-Book), 2016 ^ Cox, N.C. and Dannehl, K., Perceptions of Retailing in Early Modern England, Aldershot, Hampshire, Ashgate, 2007, pp. 155–59 ^ McKendrick, N., Brewer, J. and Plumb, J.H., The Birth of a Consumer Society: The Commercialization of Eighteenth Century England, London, 1982. ^ Fullerton, R.A., "Segmentation Strategies and Practices in the 19th-Century German Book Trade: A Case Study in the Development of a Major Marketing Technique", in Historical Perspectives in Consumer Research: National and International Perspectives, Jagdish N. Sheth and Chin Tiong Tan (eds), Singapore, Association for Consumer Research, pp 135-139 ^ Pressland, David, Book of Penny Toys, Pei International, 1991; Cross, G., Kids' Stuff: Toys and the Changing World of American Childhood, Harvard University Press, 2009, pp 95-96 ^ a b Jones, G.D.B. and Tadajewski, M. (eds), The Routledge Companion to Marketing History, Oxon, Routledge, 2016, p. 66 ^ Lockley, L.C., "Notes on the History of Marketing Research", Journal of Marketing, Vol. 14, No. 5, 1950, pp. 733–736 ^ Lockley, L.C., "Notes on the History of Marketing Research", Journal of Marketing, vol. 14, no. 5, 1950, p. 71 ^ Wilson B. S. and Levy, J., "A History of the Concept of Branding: Practice and Theory", Journal of Historical Research in Marketing, vol. 4, no. 3, 2012, pp. 347-368; DOI: 10.1108/17557501211252934 ^ Cano, C., "The Recent Evolution of Market Segmentation Concepts and Thoughts Primarily by Marketing Academics," in E. Shaw (ed) The Romance of Marketing History, Proceedings of the 11th Conference on Historical Analysis and Research in Marketing (CHARM), Boca Raton, FL, AHRIM, 2003. ^ Smith, W.R., "Product Differentiation and Market Segmentation as Alternative Marketing Strategies," Journal of Marketing, Vol. 21, No. 1, 1956, pp. 3–8 and reprinted in Marketing Management, vol. 4, no. 3, 1995, pp. 63–65 ^ Schwarzkopf, S., "Turning Trade Marks into Brands: How Advertising Agencies Created Brands in the Global Market Place, 1900–1930" CGR Working Paper, Queen Mary University, London, 18 August 2008 ^ Kara, A. and Kaynak, E., "Markets of a Single Customer: Exploiting Conceptual Developments in Market Segmentation", European Journal of Marketing, vol. 31, no. 11/12, 1997, pp. 873–895, DOI: https://dx.doi.org/10.1108/03090569710190587 ^ Firat, A.F. and Shultz, C.J., "From Segmentation to Fragmentation: Markets and Marketing Strategy in the Postmodern Era," European Journal of Marketing, vol. 31 no. 3/4, 1997, pp 183-207 ^ Hoek, J., Gendall, P. and Esslemont, D., Market segmentation: A search for the Holy Grail?, Journal of Marketing Practice Applied Marketing Science, Vol. 2, no. 1, pp. 25–34, 1996 ^ Addison, T. and O'Donohue, M., "Understanding the Customer’s Relationship With a Brand: The Role of Market Segmentation in Building Stronger Brands," Market Research Society Conference, London, 2001, Online: http://www.warc.com/fulltext/MRS/49705.htm ^ Kennedy, R. and Ehrenberg, A., "What’s in a brand?" Research, April, 2000, pp 30–32 ^ Bardakci, A. and Whitelock, L., "Mass-customisation in Marketing: The Consumer Perspective," Journal of Consumer Marketing vol. 20, no.5, 2003, pp. 463–479. ^ Smit, E. G. and Niejens, P. C., 2000. "Segmentation Based on Affinity for Advertising," Journal of Advertising Research, vol. 40, no. 4, 2000, pp. 35–43. ^ Albaum, G. and Hawkins, D. I., "Geographic Mobility and Demographic and Socioeconomic Market Segmentation," Journal of the Academy of Marketing Science, vol. 11, no. 2. 1983, pp. 97–114. ^ Blocker, C. P. and Flint, D. J., 2007. "Customer Segments as Moving Targets: Integrating Customer Value Dynamism into Segment Instability Logic," Industrial Market Management, vol. 36, no. 6., 2007, pp. 810–822. ^ Board, T. "Ten Lessons Learned from Cybersegmentation," Technology & Communications practice for IIR – The Market Research Event IPSOS Insight. 2004 [On-line] http://www.ipsosinsight.com/pdf/IpsosInsight_PD_TenTips.pdf ^ Yankelovich, D., Meer, D. "Rediscovering Market Segmentation", Harvard Business Review vol. 84. no 2, 2006, pp. 122–13 ^ a b Business Dictionary Online: http://www.businessdictionary.com/definition/undifferentiated-marketing.html ^ Based on Weinstein, A., Market Segmentation Handbook: Strategic Targeting for Business and Technology Firms, 3rd ed., Haworth Press, Binghamton, N.Y., 2004, p. 12 ^ Claessens, Maximilian. "Market Targeting - Targeting Market Segments effectively". Marketing-Insider. Retrieved 17 October 2020. ^ Moutinho, L., "Segmentation, Targeting, Positioning and Strategic Marketing," Chapter 5 in Strategic Management in Tourism, Moutinho, L. (ed), CAB International, 2000, pp. 121–166. ^ Del Hawkins & David Mothersbaugh (2010). Consumer Behavior. Building Marketing Strategy. Eleventh edition, McGraw-Hill/Irwin, New York. P 16 ^ Lesser, B. and Vagianos, L. Computer Communications and the Mass Market in Canada, Institute for Research on Public Policy, 1985, p. 37. ^ Mauboussin, M.J. and Callahan, D., Total Addressable Market: Methods to Estimate a Company's Potential Sales, [Occasional Paper], Credit-Suisse – Global Financial Strategies, 1 September 2015 ^ See for example, Lilien,G., Rangaswamy, A. and Van den Bulte, C., “Diffusion Models: Managerial Applications and Software,” ISBM Report 7, May 20, 1999. ^ Sarin, S., Market Segmentation and Targeting, Wiley International Encyclopedia of Marketing, 2010 ^ Gavett, G., "What You Need to Know About Segmentation," Harvard Business Review, Online: July 09, 2014 https://hbr.org/2014/07/what-you-need-to-know-about-segmentation ^ Wedel,M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological Foundations, Springer Science & Business Media, 2010, pp 4-5. ^ In the early 1980s, Australian fashion designer, Maggie T, was the recipient of a Hoover Award for a segmentation study which showed that women with dress size 16+ underspent on clothes because they were unable to find suitable garments. This insight led to the establishment of 'plus-sized' fashion outlets. The case study reported in Australian Marketing Projects: the Hoover Award for Marketing, West Ryde, Australia, 1982 ^ Wedel,M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological Foundations, Springer Science & Business Media, 2010, pp 8-9 ^ 'What is geographic segmentation' Kotler, Philip, and Kevin Lane Keller. Marketing Management. Prentice-Hall, 2006. ISBN 978-0-13-145757-7 ^ Doos, L. Uttley, J. and Onyia, I., "Mosaic segmentation, COPD and CHF multimorbidity and hospital admission costs: a clinical linkage study," Journal of Public Health, Vo. 36, no. 2, 2014, pp. 317–324 ^ Reid, Robert D.; Bojanic, David C. (2009). Hospitality Marketing Management (Fifth ed.). John Wiley and Sons. p. 139. ISBN 978-0-470-08858-6. Retrieved 2013-06-08. ^ Baker, M., The Marketing Book, 5th ed, Oxford, Butterworth-Heinemann, 2003, p.709 ^ Sarin, S., Market Segmentation and Targeting, Wiley International Encyclopedia of Marketing, Vol. 1 ^ Sara C. Parks PhD & Frederick J. Demicco, "Age- and Gender-Based Market Segmentation: A Structural Understanding,"International Journal of Hospitality & Tourism Administration, Vol. 3, No. 1, 2002, DOI: https://dx.doi.org/10.1300/J149v03n01_01 ^ Tynan, A.N and Drayton, J., "Market segmentation," Journal of Marketing Management, Vol. 2, No. 3, 1987, DOI:https://dx.doi.org/10.1080/0267257X.1987.9964020 ^ Coleman, R., “The Continuing Significance of Social Class to Marketing.” Journal of Consumer Research, Vol. 10, 1983, pp 265-280 ^ Gilly, M.C. and Enis, B.M., "Recycling the Family Life Cycle: a Proposal For Redefinition", in Advances in Consumer Research, Vol. 09, Andrew Mitchell (ed.), Ann Abor, MI: Association for Consumer Research, pp 271-276, Direct URL:http://acrwebsite.org/volumes/6007/volumes/v09/NA-09 ^ Boushey, H., Finding Time, Boushey, 2016 ^ Courtwright, D.T., No Right Turn, Harvard University Press, 2010, p. 147 ^ Dension, D. and Hogg, R., (eds), A History of the English Language, Cambridge, Cambridge University Press, 2008, p. 270 ^ Thorne, T., Dictionary of Contemporary Slang, 4th ed, London, Bloomsbury, 2014, ^ Burridge, K., Blooming English: Observations on the Roots, Cultivation and Hybrids of the English Language, Cambridge, Cambridge University Press, 2004, pp. 54–55 ^ "Market Segmentation and Targeting". Academic.brooklyn.cuny.edu. 2011. Archived from the original on 1 August 2014. Retrieved 15 July 2014. ^ Wedel, M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological Foundations, Springer Science & Business Media, 2010, pp 10-15 ^ Philip Kotler and Gary Armstrong, Principles of Marketing, Pearson, 2014; 2012 ^ Burrows, D., "Is behavioural data killing off demographics?" Marketing Week,4 September 2015 ^ Kotler, P., Marketing Management: Planning, Analysis, Implementation and Control, 9th ed., Upper Saddle River, Pearson, 1991 ^ Dolnicar, Sara; Grün, Bettina; Leisch, Friedrich (2018-07-20). Market Segmentation Analysis: Understanding It, Doing It, and Making It Useful. ISBN 9789811088186. ^ Clancy, K.J. and Roberts, M.L., "Towards an Optimal Market Target: A Strategy for Market Segmentation", Journal of Consumer Marketing, vol. 1, no. 1, pp 64-73 ^ Ahmad, R., "Benefit Segmentation: A potentially useful technique of segmenting and targeting older consumers," International Journal of Market Research, Vol. 45, No. 3, 2003 ^ Loker, L.E. and Perdue, R.R., "A Benefit–Based Segmentation," Journal of Travel Research, Vol. 31, No. 1, 1992, pp. 30–35 ^ Simkin, L., "Segmentation," in Baker, M.J. and Hart, S., The Marketing Book, 7th ed., Routledge, Oxon, UK, 2016, pp. 271–294 ^ McCrindle, M., Generations Defined [Booklet] n.d. circa 2010 Online: http://mccrindle.com.au/BlogRetrieve.aspx?PostID=146968&A=SearchResult&SearchID=9599835&ObjectID=146968&ObjectType=55 ^ Cran, C., The Art of Change Leadership: Driving Transformation In a Fast-Paced World, Wiley, Hoboken, N.J. 2016, pp. 174–75 ^ Salt, B., The Big Shift, South Yarra, Vic.: Hardie Grant Books, 2004 ISBN 978-1-74066-188-1 ^ U.S. Census Bureau, American Fact Finder: Age Groups and Sex, 2010 ^ McCrindle Research, Seriously Cool – Marketing & Communicating with Diverse Generations, Norwest Business Park, Australia, n.d. c. 2010 ^ Taylor, Paul; Gao, George (5 June 2014). "Generation X: America's neglected 'middle child'". Pew Research Center. Retrieved 24 July 2018. ^ Ellson, T., Culture and Positioning as Determinants of Strategy: Personality and the Business Organization, Springer, 2004 ^ Gretchen Gavett, July 09/2014, What You Need to Know About Segmentation, Harvard Business Review, accessed online 3/04/2017: [1] ^ "Management Tools - Customer Relationship Management". www.bain.com. Retrieved 23 November 2015. ^ Forsyth, John E.; Lavoie, Johanne; McGuire, Tim. Segmenting the e-market. McKinsey Quarterly. 2000, Issue 4, p14-18. 5p. ^ Marketing Insider, "Evaluating Market Segments", Online: http://targetmarketsegmentation.com/target-market/secondary-target-markets/ Archived 2016-10-23 at the Wayback Machine ^ Applbaum, K., The Marketing Era: From Professional Practice to Global Provisioning, Routledge, 2004, p. 33-35 ^ Ogilvy, David (1985). Ogilvy on advertising (First ed.). Vintage Books. ISBN 9780394729039. ^ Based on Belch, G., Belch, M.A, Kerr, G. and Powell, I., Advertising and Promotion Management: An Integrated Marketing Communication Perspective, McGraw-Hill, Sydney, Australia, 2009, pp. 205–206 ^ Shapiro, B.P. and Bonoma, T.V., "How to Segment Industrial Markets," Harvard Business Review, May 1984, Online: https://hbr.org/1984/05/how-to-segment-industrial-markets ^ a b Weinstein, A., Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms, 3rd ed., Routledge, 2013, Chapter 4 ^ "B2B Market Segmentation Research" (PDF). Circle Research. Circle Research. Archived from the original (PDF) on 12 April 2015. Retrieved 9 June 2015. ^ Gupta, Sunil. Lehmann, Donald R. Managing Customers as Investments: The Strategic Value of Customers in the Long Run, pp. 70–77 (“Customer Retention” section). Upper Saddle River, NJ: Pearson Education/Wharton School Publishing, 2005. ISBN 0-13-142895-0 ^ Goldstein, Doug. “What is Customer Segmentation?” MindofMarketing.net, May 2007. New York, NY. ^ Hunt, Shelby; Arnett, Dennis (16 June 2004). "Market Segmentation Strategy, Competitive Advantage, and Public Policy". 12 (1). Australasian Marketing Journal: 1–25. CiteSeerX 10.1.1.199.3118. Cite journal requires |journal= (help) ^ Myers, J.H., Segmentation and Positioning for Strategic Marketing Decisions, American Marketing Association, 1996 ^ Market Research Association, Glossary of Terms, Online:http://www.marketingresearch.org/issues-policies/glossary ^ Wedel, M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological Foundations, Springer Science & Business Media, 2010, pp 22-23. ^ Wedel, M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological Foundations, Springer Science & Business Media, 2010, pp 24-26. ^ Constantin, C., "Post-hoc Segmentation using Marketing Research," Economics, Vol 12, no 3, 2012, pp. 39–48. ^ https://inseaddataanalytics.github.io/INSEADAnalytics/CourseSessions/Sessions45/ClusterAnalysisReading.html., Cluster Analysis and Segmentation, Online: inseaddataanalytics.github.io/INSEADAnalytics/Report_s45.html [with worked example] ^ Desarbo, W.S., Ramaswamy, V. and Cohen, S. H., "Market segmentation with choice-based conjoint analysis," Marketing Letters, vol. 6, no. 2 pp. 137–147. ^ Perbert, F., Stenger, B. and Maki, A., "Random Forest Clustering and Application to Video Segmentation," [Research Paper], Toshiba Europe, 2009, Online: https://mi.eng.cam.ac.uk/~bdrs2/papers/perbet_bmvc09.pdf ^ Dell Software, Statistics Textbook, Online: https://documents.software.dell.com/statistics/textbook/customer-segmentation Archived 2016-10-22 at the Wayback Machine ^ Minhas, R.S. and Jacobs, E.M., "Benefit Segmentation by Factor Analysis: An improved method of targeting customers for financial services", International Journal of Bank Marketing, Vol. 14, no. 3, pp. 3–13. ^ Wedel, M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological Foundations, Springer Science & Business Media, 2010, p. 21. ^ Burinskiene, M. and Rudzkiene, V., "Application of Logit Regression Models for the Identification of Market Segments", Journal of Business Economics and Management, vol. 8, no. 4, 2008, pp. 253–258. ^ T.P. Beane and D.M. Ennis, "Market Segmentation: A Review", European Journal of Marketing, Vol. 21 no. 5, pp. 20–42. ^ Green, P.E., Carmone, F.J. and Wachspress, D.P., Consumer Segmentation Via Latent Class Analysis, Journal of Consumer Research, December, 1976, pp. 170–174, DOI: https://dx.doi.org/10.1086/208664 ^ Swait, J., "A structural equation model of latent segmentation and product choice for cross-sectional revealed preference choice data," Journal of Retailing and Consumer Services, Vol. 1, no. 2, 1994, pp. 77–89. ^ Kelly E Fish, K.E., Barnes, J.H. and Aiken, M.W., "Artificial neural networks: A new methodology for industrial market segmentation," Industrial Marketing Management, Vol. 24, no. 5, 1995, pp. 431–438. ^ US Government, Small Business Administration, Online: https://www.sba.gov/blogs/conducting-market-research-here-are-5-official-sources-free-data-can-help ^ Marr, C., "Big Data: 33 Brilliant and Ad Free Data Sources for 2016," Forbes, 12 February 2016, Online: https://www.forbes.com/sites/bernardmarr/2016/02/12/big-data-35-brilliant-and-free-data-sources-for-2016/#7ef90b046796 ^ Wedel, M. and Wagner, A., Market Segmentation: Conceptual and Methodological Foundations, Kluwer Academic Publishers, 1998, See Chapter 14 ^ For an excellent discussion of ACORN, see Chris Fill, Marketing Communications: Framework, Theories and Application, London, Prentice-Hall, 1995, p. 70 and P.R. Smith, Marketing Communications: An Integrated Approach, London, Kogan Page, 1996, p. 126; Stone et al, Fundamentals of Marketing, Routledge, 2007, Chapter 6; Wedel and Wagner, Market Segmentation: Conceptual and Methodological Foundations, pp 250-256; Baker, M., The Marketing Book, Oxford, UK, Butterworth-Heinemann, 2003, pp 258-263 ^ Weinstein & Cahill, Lifestyle Segmentation, 2006, Chapter 4 ^ Weinstein & Cahill, Lifestyle Segmentation, 2006, Chapter 4 ^ Chitty et al, Integrated Marketing Communications, 3rd Asia-Pacific ed., Cengage, pp 83-89 and p. 95; Eunson, B., Communicating in the 21st Century, 2nd ed., Wiley,p. 8.8; Phillip Kotler et al, Marketing Pearson, Australia, 2013, pp 196-7 External links[edit]. Wikiversity has learning resources about Marketing Wikimedia Commons has media related to Market segmentation. Retrieved from "https://en.wikipedia.org/w/index.php?title=Market_segmentation&oldid=1064668637" Categories: Market segmentationDemographicsHidden categories: Webarchive template wayback linksCS1 errors: missing periodicalArticles with short descriptionShort description is different from WikidataEngvarB from July 2018Commons category link from Wikidata Navigation menu. Search .
Topics
  • Topic
  • Tf
  • Position
  • market
  • 228
  • 4
  • segmentation
  • 200
  • 4
  • marketing
  • 143
  • 4
  • segment
  • 114
  • 4
  • market segmentation
  • 64
  • 4
  • pp
  • 63
  • 4
  • consumer
  • 55
  • 4
  • customer
  • 53
  • 4
  • business
  • 51
  • 4
  • product
  • 50
  • 4
  • vol
  • 49
  • 4
  • demographic
  • 45
  • 4
  • research
  • 43
  • 4
  • data
  • 43
  • 4
  • approach
  • 39
  • 4
  • marketer
  • 36
  • 4
  • market segment
  • 35
  • 4
  • analysi
  • 34
  • 4
  • target
  • 30
  • 4
  • brand
  • 28
  • 4
  • journal
  • 28
  • 4
  • targeting
  • 28
  • 4
  • strategy
  • 27
  • 4
  • geographic
  • 26
  • 4
  • example
  • 26
  • 4
  • based
  • 25
  • 4
  • number
  • 25
  • 4
  • sugar
  • 25
  • 4
  • company
  • 24
  • 4
  • variable
  • 24
  • 4
  • online
  • 22
  • 4
  • time
  • 21
  • 4
  • target market
  • 20
  • 4
  • marketing vol
  • 15
  • 4
  • segmentation targeting
  • 13
  • 4
  • marketing program
  • 11
  • 4
  • kamakura wa
  • 10
  • 4
  • market research
  • 10
  • 4
  • nt
  • 9
  • 4
  • smarter
  • 9
  • 4
  • product service
  • 9
  • 4
  • demographic segmentation
  • 9
  • 4
  • journal marketing
  • 9
  • 4
  • market segmentation conceptual
  • 8
  • 4
  • segmentation conceptual methodological
  • 8
  • 4
  • conceptual methodological foundation
  • 8
  • 4
  • management vol
  • 8
  • 4
  • marketing management
  • 8
  • 4
  • market segmented
  • 8
  • 4
  • post hoc
  • 8
  • 4
  • marketing strategy
  • 8
  • 4
  • segmentation conceptual
  • 8
  • 4
  • conceptual methodological
  • 8
  • 4
  • methodological foundation
  • 8
  • 4
  • journal marketing vol
  • 7
  • 4
  • 2010 pp
  • 7
  • 4
  • consumer market
  • 7
  • 4
  • segmentation strategy
  • 7
  • 4
  • business market
  • 7
  • 4
  • targeting positioning
  • 7
  • 4
  • geographic segmentation
  • 7
  • 4
  • benefit segmentation
  • 7
  • 4
  • media 2010
  • 7
  • 4
  • market market
  • 7
  • 4
  • mass marketing
  • 7
  • 4
  • geo demographic
  • 7
  • 4
  • segmentation targeting positioning
  • 6
  • 4
  • kamakura wa market
  • 6
  • 4
  • wa market segmentation
  • 6
  • 4
  • methodological foundation springer
  • 6
  • 4
  • foundation springer science
  • 6
  • 4
  • springer science business
  • 6
  • 4
  • science business media
  • 6
  • 4
  • business media 2010
  • 6
  • 4
  • isbn 978
  • 6
  • 4
  • marketing book
  • 6
  • 4
  • ed routledge
  • 6
  • 4
  • segmenting market
  • 6
  • 4
  • bas segmenting
  • 6
  • 4
  • data source
  • 6
  • 4
  • socio economic
  • 6
  • 4
  • enter market
  • 6
  • 4
  • based segmentation
  • 6
  • 4
  • industrial market
  • 6
  • 4
  • 12
  • 6
  • 4
  • generation
  • 6
  • 4
  • chapter
  • 6
  • 4
  • consumer research
  • 6
  • 4
  • wa market
  • 6
  • 4
  • foundation springer
  • 6
  • 4
  • springer science
  • 6
  • 4
  • science business
  • 6
  • 4
  • business media
  • 6
  • 4
  • wedel
  • 6
  • 4
  • media 2010 pp
  • 5
  • 4
  • free data
  • 5
  • 4
  • approach segmentation
  • 5
  • 4
  • developing marketing
  • 5
  • 4
  • segment market
  • 5
  • 4
  • segmentation analysi
  • 5
  • 4
  • psychographic segmentation
  • 5
  • 4
  • benefit sought
  • 5
  • 4
  • cultural segmentation
  • 5
  • 4
  • product differentiation
  • 5
  • 4
  • demographic variable
  • 5
  • 4
  • purchase frequency
  • 5
  • 4
  • ed
  • 5
  • 4
  • research vol
  • 5
  • 4
  • post hoc segmentation
  • 4
  • 4
  • upwardly mobile prosperou
  • 4
  • 4
  • mobile prosperou professional
  • 4
  • 4
  • enter market segment
  • 4
  • 4
  • harvard business review
  • 4
  • 4
  • wedel kamakura
  • 4
  • 4
  • vol 31
  • 4
  • 4
  • 2000 pp
  • 4
  • 4
  • segmentation harvard
  • 4
  • 4
  • process dividing
  • 4
  • 4
  • marketing research
  • 4
  • 4
  • segmenting consumer
  • 4
  • 4
  • behavioural segmentation
  • 4
  • 4
  • segment size
  • 4
  • 4
  • segmenting business
  • 4
  • 4
  • priori
  • 4
  • 4
  • hoc segmentation
  • 4
  • 4
  • marketing mix
  • 4
  • 4
  • segmentation approach
  • 4
  • 4
  • demographic psychographic
  • 4
  • 4
  • sugar sugar
  • 4
  • 4
  • market potential
  • 4
  • 4
  • refer extent
  • 4
  • 4
  • geographic demographic
  • 4
  • 4
  • behavioural variable
  • 4
  • 4
  • upwardly mobile
  • 4
  • 4
  • mobile prosperou
  • 4
  • 4
  • prosperou professional
  • 4
  • 4
  • product brand
  • 4
  • 4
  • market target
  • 4
  • 4
  • university press
  • 4
  • 4
  • journal consumer
  • 4
  • 4
  • segmentation journal
  • 4
  • 4
  • harvard business
  • 4
  • 4
  • business review
  • 4
  • 4
  • 13
  • 4
  • 4
  • kamakura
  • 4
  • 4
  • marketing communication
  • 4
  • 4
  • approach segmentation targeting
  • 3
  • 4
  • target market market
  • 3
  • 4
  • bas segmenting consumer
  • 3
  • 4
  • segmenting consumer market
  • 3
  • 4
  • developing marketing program
  • 3
  • 4
  • segmenting business market
  • 3
  • 4
  • product differentiation market
  • 3
  • 4
  • differentiation market segmentation
  • 3
  • 4
  • total addressable market
  • 3
  • 4
  • marketing strategy journal
  • 3
  • 4
  • marketing science vol
  • 3
  • 4
  • 1987
  • 3
  • 4
  • marketing vol 14
  • 3
  • 4
  • vol 14
  • 3
  • 4
  • marketing management vol
  • 3
  • 4
  • european journal marketing
  • 3
  • 4
  • niejen
  • 3
  • 4
  • market segmentation journal
  • 3
  • 4
  • flint
  • 3
  • 4
  • segmentation harvard business
  • 3
  • 4
  • market segmentation targeting
  • 3
  • 4
  • european journal
  • 3
  • 4
  • 978
  • 3
  • 4
  • 2010
  • 3
  • 4
Result 5
TitleWhat is Market Segmentation? 4 Types & 5 Benefits
Urlhttps://www.lotame.com/what-is-market-segmentation/
DescriptionMarket segmentation can help you to target just the people most likely to become satisfied customers of your company or enthusiastic consumers of your content
DateMar 11, 2019
Organic Position5
H1What Is Market Segmentation?
H2The Importance of Market Segmentation
Types of Market Segmentation
Other Methods of Market Segmentation
5 Benefits of Market Segmentation
How Lotame Can Help
Ready to Get Started?
H31. Demographic Segmentation
2. Behavioral Segmentation
3. Geographic Segmentation
4. Psychographic Segmentation
1. Improves Campaign Performance
2. Informs Product Development
3. Reveals Areas to Expand
4. Improves Business Focus
5. Informs Other Business Decisions
Related Posts
See Why Companies Around the World Choose to Work With Lotame
H2WithAnchorsThe Importance of Market Segmentation
Types of Market Segmentation
Other Methods of Market Segmentation
5 Benefits of Market Segmentation
How Lotame Can Help
Ready to Get Started?
BodyWhat Is Market Segmentation? March 11, 2019 When trying to reach customers with a marketing message or ad campaign, targeting the right market with the right message is essential — If you aim too broadly, your message might reach a few people who end up becoming customers, but you’ll also reach a lot of people who aren’t interested in your products or services. When your messaging isn’t optimized for your audience, you’ll end up with a lot of wasted advertising dollars. Market segmentation can help you to target just the people most likely to become satisfied customers of your company or enthusiastic consumers of your content. To segment a market, you split it up into groups that have similar characteristics. You can base a segment on one or more qualities. Splitting up an audience in this way allows for more precisely targeted marketing and personalized content. Types of Market Segmentation 5 Benefits of Market Segmentation   The Importance of Market Segmentation. Market segmentation can help you to define and better understand your target audiences and ideal customers. If you’re a marketer, this allows you to identify the right market for your products and then target your marketing more effectively. Similarly, publishers can use market segmentation to offer more precisely targeted advertising options and to customize their content for different audience groups. Say, for example, you’re a marketer who’s advertising a new brand of dog food. You could split an audience into segments based on whether they have a dog. You could then segment that audience further based on what kind of dog they have and then show them ads for food formulated for their dog’s breed. A publisher could use this same information to show content about dogs to people who have or like dogs. Market segmentation allows you to target your content to the right people in the right way, rather than targeting your entire audience with a generic message. This helps you increase the chances of people engaging with your ad or content, resulting in more efficient campaigns and improved return on investment (ROI). Types of Market Segmentation. There are many different kinds of market segments you can create. Below are the four main methods of market segmentation. You can also create more niche segments within the types below. 1. Demographic Segmentation. Start Targeting Your Ideal Customers Demographic segmentation is one of the most common forms. It refers to splitting up audiences based on observable, people-based differences. These qualities include things like age, sex, marital status, family size, occupation, education level, income, race, nationality and religion. Segmenting a market according to demographics is the most basic form of segmentation. Combining demographic segmentation with other types can help you to narrow down your market even more. One benefit of this kind of segmentation is that the information is relatively easily accessible and low-cost to obtain. Some products are targeted explicitly towards a specific demographic. One personal care company, for example, might make two deodorant products — one labeled as men’s deodorant and one labeled as women’s deodorant. Automotive companies often segment their audience by income and market different makes and models of cars to each segment. One company may have a luxury brand, an economy brand and a mid-range brand. There are numerous ways to gather demographic data. One way is to ask your customers directly. This can be time-consuming, but getting the information directly from customers will help ensure its accuracy. If you go this route, be careful to be respectful in how you ask and give customers sufficient response options so you get accurate results. You may also be able to obtain demographic data directly from customers by looking at social media and other online profiles where they may provide information about themselves. You can also get demographic from second-party and third-party data providers including marketing service providers and credit bureaus. Public records, such as those kept by the U.S. Census Bureau and the U.S. Postal Service, can also provide useful information. Collecting this data in a data management platform (DMP) will help you to organize it and use it to target your marketing campaigns or content personalization efforts. 2. Behavioral Segmentation. You can also segment your market based on consumers’ behaviors, especially regarding your product. Dividing your audience based on behaviors they display allows you to create messaging that caters to those behaviors. Many of the actions you might look at relate to how someone interacts with your product, website, app or brand. Some types of behaviors to look at include: Online shopping habits: You might consider a users’ online shopping habits across all sites, as this may correlate with the likelihood they will make an online purchase on your website. Actions taken on a website: You can track actions users take on your online properties to better understand how they interact with them. You might look at how long someone stays on your site, whether they read articles all the way to the end, the types of content they click on and more. Benefits sought: This refers to the need a customer is trying to meet by purchasing a product. Usage rate: You can categorize users based on usage rate. Your messaging will be different depending on whether someone is a heavy user, medium user, light user or non-user of your product. Loyalty: After using a product for some time, customers often develop brand loyalty. You can categorize customers based on how loyal they are to your brand and tailor your messaging accordingly. Behavioral data is useful because it relates directly to how someone interacts with your brand or products. Because of this, it can help you market more effectively to them. You can collect this data through various sources including cookies placed on your website, the purchase data in your customer relationship management (CRM) software and third-party datasets. 3. Geographic Segmentation. Geographic segmentation, splitting up your market based on their location, is a basic but highly useful segmentation strategy. A customer’s location can help you better understand their needs and enable you to send out location-specific ads. There are several kinds of geographic segmentation. The most basic is identifying users based on their locations such as their country, state, county and zip code. You can also identify consumers based on the characteristics of the area they live in, such as its climate, the population density and whether it’s urban, suburban or rural. Identifying characteristics can require you to get more specific since one county could have rural, suburban and urban areas. Dividing a market according to location is critical if you need to target an ad to people in a specific area, such as if you’re advertising a small local business. It can also be useful if you’re targeting a broad area because it enables you to tailor your messaging according to regional differences in language, interests, norms and other attributes as well as the differing needs of people in different regions. You may need to change the language your messaging depending on the region you’re targeting. People who live in different countries may also have different interests. Baseball is very popular in the United States, for example, while cricket is more popular in India. If you’re marketing sports equipment or publishing sports articles, you will want to take these different preferences into account. Companies can also consider different needs in different regions. A clothing company, for instance, will show ads featuring warmer clothing to people living in cooler climates and show the opposite to people living in warmer climates. 4. Psychographic Segmentation. Psychographic segmentation is similar to demographic segmentation, but it deals with characteristics that are more mental and emotional. These attributes may not be as easy to observe as demographics, but they can give you valuable insight into your audience’s motives, preferences and needs. Understanding these aspects of your audience can help you to create content that appeals to them more effectively. Some examples of psychographic characteristics include personality traits, interests, beliefs, values, attitudes and lifestyles. If you find that members of a demographic segment are responding differently to your content, you might want to add in some psychographic information. While demographics provide the basic facts about who your audience is, psychographics give you insight into why people decide to purchase or not purchase your product, click on or ignore your ad and otherwise interact with you. Say you’re a furniture and home decor company, and you have a market segment consisting of newlyweds in their 20s and 30s with a household income above $60,000. Some members of this segment are converting, while others are not. When you add psychographic information into the mix, you may find that people that purchase your products often value community and friendships and are environmentally conscious. Based on this information, you could create ads that show people entertaining friends in their home and emphasize the environmentally friendly attributes of your brand. You can collect this data in many of the same ways you can gather demographic data. You can ask your existing customers for this information using surveys. You can also look at the way people interact with your website and see what types of content they engage with, which gives you insight into their interests and preferences. You can also supplement your first-party data with second-party and third-party data. Start Targeting Your Ideal Customers Other Methods of Market Segmentation. Demographic, psychographic, behavioral and geographic segmentation are considered the four main types of market segmentation, but there are also many other strategies you can use, including numerous variations on the four main types. Here are several more methods you may want to look into. Value segmentation: Some businesses will split up a market based on the “transactional worth” of their customers — how much they’re likely to spend on their products. To determine a customer’s transactional worth, you can look at previous purchase data such as how many purchases they make, how often they make purchases and the value of the items they purchase. Firmographic segmentation: Business-to-business (B2B) companies may use firmographic segmentation to divide up the businesses in a market. This is similar to demographic segmentation with individual consumers but instead looks at the characteristics of companies that may become customers. Examples of data to look at include industry, revenue, number of employees and location. Generational segmentation: Businesses may segment consumers by generation and group them into categories that include Gen Z, Millenials, Generation X, Baby Boomers and the Silent Generation. These generations are believed to share certain preferences, behaviors, personality traits and beliefs. Of course, not every member of a generation is the same, but generational segmentation can give you some additional insight into your audience. Lifestage segmentation: You can also segment your market into groups based on where they are in their lives. Going to college, getting married and having children are examples of key life events to consider. People at different stages of life need different things. For instance, soon-to-be college students may need apartment furniture. New parents will be looking to purchase baby food. Seasonal segmentation: Similarly to how people buy different products in different periods of their lives, people also buy different items at different times of the year. Major holidays such as Christmas and Hanukkah also significantly impact purchasing behaviors. 5 Benefits of Market Segmentation.   Start Targeting Your Ideal Customers In a recent survey of marketing professionals in North America, 62 percent of respondents said improving audience segmentation to enable more precisely targeted messaging was a top priority. There’s a reason improving segmentation was the most frequently reported priority in the survey. Market segmentation offers many benefits to marketers, publishers and others, including the following advantages. 1. Improves Campaign Performance. Market segmentation can help you to improve the performance of your marketing campaigns by helping you to target the right people with the right messaging at the right time. Segmentation enables you to learn more about your audience so you can better tailor your messaging to their preferences and needs. Targeting a specific segment that is likely to be interested in your content or product is much more effective than targeting an overly broad audience. If you advertise to an entire market, you will end up spending a massive amount of money on ads, but a relatively small percentage will convert. If you instead direct your marketing to a segment with the right characteristics, you can increase the conversion rate of your campaign considerably. The more specific the audience of people interested in your brand, the more beneficial targeting can be. For example, there’s no reason to market dental tools to anybody but dentists. Marketing them to a broad audience would result in wasted ad dollars. Even if you’re selling a product with broad appeal, customer segmentation can help you tailor your messaging to different groups to better engage with them. Say that you’re advertising furniture. You might split your audience up by age and push individuals ads that show people who are close to their age. 2. Informs Product Development. Market segmentation can also help companies to develop products that better meet the needs of their customers. You can create products to appeal to needs your main market segment may have and develop different products tailored to different parts of your customer base. Say, for instance, you run an automotive company, and your primary market segment is middle-class families. You would likely design your car with lots of seating, leg room and space to accommodate a family with multiple kids. You would also create mid-range priced vehicles. You could, however, also segment your audience further, and create vehicles that appeal to each of those segments. For example, one segment might be families who like to go on outdoorsy vacations. To appeal to this group, you could offer a vehicle with four-wheel drive and lots of cargo space. Another segment might prefer to take trips into the city. You might make this car smaller so that the drivers can easily navigate narrow city streets and fit into tight parking spots. Designing your products with the needs of your customers in mind will help you to sell more and will make your customers happier. Your customers will also feel like you understand their needs, improving your company’s reputation. 3. Reveals Areas to Expand. Market segmentation can also help businesses to identify audience segments that they are not currently reaching with their marketing efforts and then expand into new markets. When you look at your audience data, you might discover interests that you didn’t realize your customers had. For example, a company might make the majority of their sales in physical stores. When looking at behavioral data, they might see that many of their customers like to shop online. Based on this information, they could then either open an online store or stat advertising their online marketplace more. As another example, a clothing company that primarily targets middle-aged women might decide to start selling kids clothing as well. They could introduce these items and market them to their current customers, encouraging them to buy them for their kids. 4. Improves Business Focus. Market segmentation can also help businesses to focus their efforts, which enables them to establish a brand identity and specialize in a particular type of products. A brand that tries to appeal to everyone in their marketing will come off as generic and unmemorable. It could also leave customers confused about what the brand stands for and what kind of company it represents. Similarly, a company that tries to sell everything likely won’t make a big impact in any one market, and its offerings may be of lower quality compared to companies that specialize. As your company grows, you can expand your offerings, but when first starting out, it can be challenging to differentiate your company if your product offerings are too broad. 5. Informs Other Business Decisions. Market segmentation can also help to inform other important business decisions regarding how you get your product to customers. These decisions may involve matters such as pricing and distribution. Businesses can use segmentation to help them decide on pricing that maximizes sales while keeping customers happy. Companies may consider demographic information such as income levels. They may also take into account their customers’ price sensitivity — the degree to which their price affects their purchase decisions. Paying attention to seasonal demand changes can help businesses time special deals to boost sales. Market segmentation can also help companies to determine the optimal strategies for the distribution of their products. Some groups of people, for instance, are more likely to shop online, while others are more likely to shop in a store. Companies can also decide which stores to pitch their products to based on where their market segment shops. Their customers may, for example, shop at luxury boutiques or bargain outlets. Looking at geographic data can also help a company decide where to set up a new store. How Lotame Can Help. To take control of your segmented audience data, you need the right data tools, along with the right partners. Working with Lotame provides you with both. We offer tools such as our data management platform, which you can use to collect, organize, analyze and activate all of the data you gather. Organizing your data in our DMP helps you get a better understanding of your audience. You can easily create audience segments using our DMP. We also provide a variety of other tools such as our data exchange, which gives you access to thousands of third-party audience segments, and our cross-device technology, which enables you to serve sequential messaging to users across multiple devices. As the leading independent DMP provider, we are highly agile and responsive to our clients. We can help you improve your understanding of your audience to enable enhanced content personalization and ad targeting. As you learn more about your audience and tailor your messaging, content and strategies to your customers’ and prospects’ needs, you can boost engagement, sales and customer satisfaction. To learn more about our solutions and how we can help you get to know your audience better, contact us today. Find new customers, increase customer engagement, and grow revenue with first-, second-, and third-party data. Learn how Lotame Panorama can help you in today’s cookie-challenge web. Related Posts. Audience Extension vs Audience EnrichmentTarget users based on behaviors they've displayed off-site or to reach users on other properties.… How to Judge Data Quality in 5 StepsWhen it comes to data, understanding the differences between data providers and the segmentation they… Blis Partners with Lotame to Offer More Audience Data Choice to MarketersMarket-leading location platform integrated with Lotame DMP delivers additional targeting depth and contextual mobile campaigns… See Why Companies Around the World Choose to Work With Lotame. Why Lotame? Ready to Get Started? Fill in this form and a member of the Lotame team will be in touch.
Topics
  • Topic
  • Tf
  • Position
  • segmentation
  • 50
  • 5
  • market
  • 43
  • 5
  • customer
  • 40
  • 5
  • data
  • 37
  • 5
  • audience
  • 34
  • 5
  • product
  • 27
  • 5
  • segment
  • 26
  • 5
  • company
  • 25
  • 5
  • person
  • 23
  • 5
  • party
  • 22
  • 5
  • market segmentation
  • 21
  • 5
  • demographic
  • 19
  • 5
  • based
  • 17
  • 5
  • business
  • 15
  • 5
  • content
  • 14
  • 5
  • user
  • 13
  • 5
  • targeting
  • 13
  • 5
  • brand
  • 13
  • 5
  • example
  • 12
  • 5
  • marketing
  • 12
  • 5
  • ad
  • 12
  • 5
  • messaging
  • 12
  • 5
  • create
  • 11
  • 5
  • type
  • 11
  • 5
  • information
  • 11
  • 5
  • party data
  • 9
  • 5
  • target
  • 9
  • 5
  • online
  • 9
  • 5
  • purchase
  • 9
  • 5
  • psychographic
  • 8
  • 5
  • lotame
  • 8
  • 5
  • enable
  • 7
  • 5
  • demographic segmentation
  • 6
  • 5
  • geographic segmentation
  • 5
  • 5
  • segmentation business
  • 5
  • 5
  • market segment
  • 5
  • 5
  • tailor messaging
  • 5
  • 5
  • ideal customer
  • 4
  • 5
  • audience segment
  • 4
  • 5
  • type market segmentation
  • 3
  • 5
  • start targeting ideal
  • 3
  • 5
  • targeting ideal customer
  • 3
  • 5
  • segment market
  • 3
  • 5
  • precisely targeted
  • 3
  • 5
  • type market
  • 3
  • 5
  • segment audience
  • 3
  • 5
  • audience based
  • 3
  • 5
  • start targeting
  • 3
  • 5
  • targeting ideal
  • 3
  • 5
  • demographic data
  • 3
  • 5
  • data customer
  • 3
  • 5
  • market based
  • 3
  • 5
  • user based
  • 3
  • 5
  • customer example
  • 3
  • 5
  • audience data
  • 3
  • 5
Result 6
Title4 Types of Market Segmentation With Examples - Alexa Blog
Urlhttps://blog.alexa.com/types-of-market-segmentation/
DescriptionLearn the four types of market segmentation you can use to reach your target customer and create more effective marketing campaigns
Date
Organic Position6
H14 Types of Market Segmentation With Examples
H2What Is Market Segmentation?
Eight Benefits of Market Segmentation
The Four Types of Market Segmentation
How to Create a Market Segmentation Strategy
Use Market Segmentation to Build Better Marketing Campaigns
Related Posts
4 Types of Market Segmentation With Examples
H31. Create stronger marketing messages
2. Identify the most effective marketing tactics
3. Design hyper-targeted ads
4. Attract (and convert) quality leads
5. Differentiate your brand from competitors
6. Build deeper customer affinity
7. Identify niche market opportunities
8. Stay focused
Demographic Segmentation
Psychographic Segmentation
Behavioral Segmentation
Geographic Segmentation
1. Analyze your existing customers
2. Create a buyer persona for your ideal customer
3. Identify market segment opportunities
4. Research your potential segment
5. Test and iterate
H2WithAnchorsWhat Is Market Segmentation?
Eight Benefits of Market Segmentation
The Four Types of Market Segmentation
How to Create a Market Segmentation Strategy
Use Market Segmentation to Build Better Marketing Campaigns
Related Posts
4 Types of Market Segmentation With Examples
Body4 Types of Market Segmentation With Examples Using different types of market segmentation allows you to target customers based on unique characteristics, create more effective marketing campaigns, and find opportunities in your market. See how you can leverage market segmentation by learning: What market segmentation is Why market segmentation is important The four types of market segmentation How to create a market segmentation strategy What Is Market Segmentation? Market segmentation is the process of dividing a target market into smaller, more defined categories. It segments customers and audiences into groups that share similar characteristics such as demographics, interests, needs, or location. Eight Benefits of Market Segmentation. The importance of market segmentation is that it makes it easier to focus marketing efforts and resources on reaching the most valuable audiences and achieving business goals. Market segmentation allows you to get to know your customers, identify what is needed in your market segment, and determine how you can best meet those needs with your product or service. This helps you design and execute better marketing strategies from top to bottom. Market segmentation helps you get to know your customers, identify what's needed in your market segment, and determine how you can best meet those needs with your product or service. Click To Tweet 1. Create stronger marketing messages. When you know whom you’re talking to, you can develop stronger marketing messages. You can avoid generic, vague language that speaks to a broad audience. Instead, you can use direct messaging that speaks to the needs, wants, and unique characteristics of your target audience. 2. Identify the most effective marketing tactics. With dozens of marketing tactics available, it can be difficult to know what will attract your ideal audience. Using different types of market segmentation guides you toward the marketing strategies that will work best. When you know the audience you are targeting, you can determine the best solutions and methods for reaching them. 3. Design hyper-targeted ads. On digital ad services, you can target audiences by their age, location, purchasing habits, interests, and more. When you use market segmentation to define your audience, you know these detailed characteristics and can use them to create more effective, targeted digital ad campaigns. 4. Attract (and convert) quality leads. When your marketing messages are clear, direct, and targeted they attract the right people. You draw in ideal prospects and are more likely to convert potential customers into buyers. When your marketing messages are clear, direct, and targeted they attract the right people. Click To Tweet 5. Differentiate your brand from competitors. Being more specific about your value propositions and messaging also allows you to stand out from competitors. Instead of blending in with other brands, you can differentiate your brand by focusing on specific customer needs and characteristics. 6. Build deeper customer affinity. When you know what your customers want and need, you can deliver and communicate offerings that uniquely serve and resonate with them Click & Tweet! . This distinct value and messaging leads to stronger bonds between brands and customers and creates lasting brand affinity. 7. Identify niche market opportunities. Niche marketing is the process of identifying segments of industries and verticals that have a large audience that can be served in new ways. When you segment your target market, you can find underserved niche markets that you can develop new products and services for. 8. Stay focused. Targeting in marketing keeps your messaging and marketing objectives on track. It helps you identify new marketing opportunities and avoid distractions that will lead you away from your target market. The Four Types of Market Segmentation. The four bases of market segmentation are: Demographic segmentation Psychographic segmentation Behavioral segmentation Geographic segmentation Within each of these types of market segmentation, multiple sub-categories further classify audiences and customers. Demographic Segmentation. Demographic segmentation is one of the most popular and commonly used types of market segmentation. It refers to statistical data about a group of people. Demographic Market Segmentation Examples  Age Gender Income Location Family Situation Annual Income Education Ethnicity Where the above examples are helpful for segmenting B2C audiences, a business might use the following to classify a B2B audience: Company size Industry Job function Because demographic information is statistical and factual, it is usually relatively easy to uncover using various sites for market research. A simple example of B2C demographic segmentation could be a vehicle manufacturer that sells a luxury car brand (ex. Maserati). This company would likely target an audience that has a higher income. Another B2B example might be a brand that sells an enterprise marketing platform. This brand would likely target marketing managers at larger companies (ex. 500+ employees) who have the ability to make purchase decisions for their teams. Psychographic Segmentation. Psychographic segmentation categorizes audiences and customers by factors that relate to their personalities and characteristics. Psychographic Market Segmentation Examples  Personality traits Values Attitudes Interests Lifestyles Psychological influences Subconscious and conscious beliefs Motivations Priorities Psychographic segmentation factors are slightly more difficult to identify than demographics because they are subjective. They are not data-focused and require research to uncover and understand. For example, the luxury car brand may choose to focus on customers who value quality and status. While the B2B enterprise marketing platform may target marketing managers who are motivated to increase productivity and show value to their executive team. Related: 4 types of market research to fuel your marketing strategies Behavioral Segmentation. While demographic and psychographic segmentation focus on who a customer is, behavioral segmentation focuses on how the customer acts. Behavioral Market Segmentation Examples  Purchasing habits Spending habits User status Brand interactions Behavioral segmentation requires you to know about your customer’s actions. These activities may relate to how a customer interacts with your brand or to other activities that happen away from your brand. A B2C example in this segment may be the luxury car brand choosing to target customers who have purchased a high-end vehicle in the past three years. The B2B marketing platform may focus on leads who have signed up for one of their free webinars. Geographic Segmentation. Geographic segmentation is the simplest type of market segmentation. It categorizes customers based on geographic borders. Geographic Market Segmentation Examples    ZIP code City Country Radius around a certain location Climate Urban or rural Geographic segmentation can refer to a defined geographic boundary (such as a city or ZIP code) or type of area (such as the size of city or type of climate). An example of geographic segmentation may be the luxury car company choosing to target customers who live in warm climates where vehicles don’t need to be equipped for snowy weather. The marketing platform might focus their marketing efforts around urban, city centers where their target customer is likely to work. How to Create a Market Segmentation Strategy. Now, you know what market segmentation is, why it’s important, and the four types of market segmentation. It’s time to put this information into practice. Use the following market segmentation process to learn about your audience and find new marketing and product opportunities. 1. Analyze your existing customers. If you have existing customers, start your market segmentation process by performing an audience analysis. An audience analysis allows you to learn about your customers and begin to identify trends that exist within your current customer base.  Use these market research questions to guide your research. Interview your customers. Go right to the source and conduct interviews with existing customers, past customers, ideal customers, and prospects and leads. Ask questions that help you fill in the details of all four types of market segmentation. Interview your sales team. If you have a sales team that spends a lot of time working with customers, use them as a resource. Interview them to find commonalities or trends they often see while working with your customers. Refer to your business data. Your business likely has loads of data that can help you get to know your customers. Use your customer relationship management tools and point-of-sale systems to find trends related to behavioral segmentation. Pull data that shows how much customers spend, how often they visit your store, and the type of products and services they buy. Use your website analytics. Your website also has data that can help you learn about your audience. Use Google Analytics to find details related to all four types of market segmentation. For example, you can learn about customer behavior by seeing what pages users visit, how long they stay on the site, and what referral sites led them to your site. Research audience geography. Get details for graphic segmentation and find out where your audience lives using Alexa’s Site Overview tool. Enter your site URL, and the report shows you where your website visitors are located across the world. Research audience interests. Knowing your audience’s interests can help you identify psychographic segments within your customer base. Use Alexa’s Audience Interest tool to find topics and categories that your audience cares about. Enter your site URL to produce a report of categories that your audience is interested in. Learn more about your audience by seeing what other websites they use. Enter the URL of your website in Alexa’s Audience Overlap tool to create a cluster map with dozens of other sites that your audience regularly visits. See what your customers search for. Knowing what your customers search for is a great way to get inside their minds and see what they want and need Click & Tweet! . To see what terms your audience searches for, use Alexa’s Audience Overlap tool and Competitor Keyword Matrix tool. Start by using the Audience Overlap tool to create a list of sites that your audience visits. Then, toggle to the list view, select up to 10 sites, and run the sites through Alexa’s Competitor Keyword Matrix. The tool produces a report of the top keywords driving traffic to the listed sites. Use this data to identify the topics and themes that matter most to your target market. 2. Create a buyer persona for your ideal customer. Once you complete an audience analysis, you’ll have a good idea about who your current customers are. In the next step, take your data and use it to create a buyer persona that describes the exact type of customer you’d like to attract. A buyer persona is a semi-fictional description of your ideal customer. It allows you to clearly visualize the person that your brand is trying to attract. Knowing whom you want to work with will make it easier to find the right market segment opportunities. If you need help with creating a persona, use this free downloadable buyer persona template to walk you through the process. Related Reading: Here Are 10 Buyer Persona Examples to Help You Create Your Own 3. Identify market segment opportunities. Once you have a buyer persona that describes your ideal customer, start looking for market segment opportunities. A market segment opportunity is a trend that can drive new marketing tactics or offerings. To find them, first ask questions about your brand. What problems does your brand solve? What problems can you solve better than your competitors? What do you know a lot about or excel at? Who do you and your team like to serve? Then, refer back to your audience analysis and buyer persona and ask questions that uncover opportunities. What large segments stick out? What customer characteristics or qualities are most common? What segments are currently not being served? What segments is your brand uniquely qualified to serve? Identify a few potential market segment opportunities, and then research to confirm that they are viable. 4. Research your potential segment. Before you launch a marketing campaign for a new segment of your market, verify that it is a good option. Research to see what competition exists and if audiences are interested in your new market. Gauge search interest. Perform keyword research to make sure audiences are searching for terms related to your new market segment. Enter search phrases into Alexa’s Keyword Difficulty tool to measure audience interest and competition. Look for phrases that are popular with low competition to find a sweet spot. Research the competition. If there is interest in your market, research to see what competition is already in the space. Use Alexa’s Keyword Share of Voice tool to find brands already in the market. Enter a search phrase to create a report with brands that own the top share-of-voice for the phrase. Share of voice represents the amount of traffic that a website receives for a specific keyword. It helps you identify brands already in the market, so you can see if you can compete with them and how you can differentiate your brand from their existing offerings. 5. Test and iterate. Once you find a new market you want to explore, don’t go all in just yet. Create a few campaigns to test your idea. Try new markets and track your results to see where you can find a sweet spot that resonates with audiences. Small market tweaks can lead to big results, so continue to go through this process, test, and iterate based on what you learn. Market segmentation helps your brand get clear about your audience and goals. Click To Tweet Use Market Segmentation to Build Better Marketing Campaigns. Market segmentation helps your brand get clear about your audience and goals. You can get to know your audience, see how to better serve and reach them, and find new markets to grow into. Related Posts . 5 Ways to Strengthen the Retail Customer Journey for Your E-commerce Business . September 13th, 2021 | 0 Comments Why Inbound Content Marketing Needs More Conversations . July 12th, 2021 | 0 Comments 6 Customer Journey Touchpoints to Help Build an Optimal User Experience . May 24th, 2021 | 0 Comments Competitive Intelligence 4 Types of Market Segmentation With Examples . All The Content Calendar Template That Saves Time for … All 8 Common Duplicate Content Issues and How to Fix T… Go to Top
Topics
  • Topic
  • Tf
  • Position
  • market
  • 63
  • 6
  • segmentation
  • 55
  • 6
  • customer
  • 47
  • 6
  • audience
  • 46
  • 6
  • market segmentation
  • 35
  • 6
  • marketing
  • 27
  • 6
  • brand
  • 23
  • 6
  • type
  • 20
  • 6
  • segment
  • 18
  • 6
  • type market
  • 16
  • 6
  • create
  • 16
  • 6
  • identify
  • 15
  • 6
  • find
  • 15
  • 6
  • alexa
  • 14
  • 6
  • research
  • 14
  • 6
  • example
  • 14
  • 6
  • site
  • 13
  • 6
  • target
  • 13
  • 6
  • type market segmentation
  • 12
  • 6
  • opportunity
  • 11
  • 6
  • interest
  • 10
  • 6
  • tool
  • 10
  • 6
  • keyword
  • 9
  • 6
  • demographic
  • 9
  • 6
  • market segment
  • 8
  • 6
  • characteristic
  • 8
  • 6
  • buyer
  • 8
  • 6
  • geographic
  • 8
  • 6
  • data
  • 8
  • 6
  • persona
  • 8
  • 6
  • market segmentation example
  • 7
  • 6
  • click tweet
  • 7
  • 6
  • segmentation example
  • 7
  • 6
  • buyer persona
  • 7
  • 6
  • psychographic
  • 7
  • 6
  • learn
  • 6
  • 6
  • website
  • 6
  • 6
  • search
  • 6
  • 6
  • market segment opportunity
  • 5
  • 6
  • audience interest
  • 5
  • 6
  • audience overlap
  • 5
  • 6
  • target market
  • 5
  • 6
  • product service
  • 5
  • 6
  • comment
  • 5
  • 6
  • psychographic segmentation
  • 5
  • 6
  • behavioral segmentation
  • 5
  • 6
  • geographic segmentation
  • 5
  • 6
  • segment opportunity
  • 5
  • 6
  • target audience
  • 4
  • 6
  • differentiate brand
  • 4
  • 6
  • target customer
  • 4
  • 6
  • marketing message
  • 4
  • 6
  • demographic segmentation
  • 4
  • 6
  • market research
  • 4
  • 6
  • luxury car
  • 4
  • 6
  • marketing platform
  • 4
  • 6
  • audience analysi
  • 4
  • 6
  • ideal customer
  • 4
  • 6
  • market segmentation process
  • 3
  • 6
  • market segmentation help
  • 3
  • 6
  • luxury car brand
  • 3
  • 6
  • alexa audience
  • 3
  • 6
  • audience overlap tool
  • 3
  • 6
  • 2021 comment
  • 3
  • 6
  • marketing campaign
  • 3
  • 6
  • segmentation process
  • 3
  • 6
  • marketing strategy
  • 3
  • 6
  • segmentation help
  • 3
  • 6
  • marketing tactic
  • 3
  • 6
  • segmentation demographic
  • 3
  • 6
  • car brand
  • 3
  • 6
  • learn audience
  • 3
  • 6
  • existing customer
  • 3
  • 6
  • research audience
  • 3
  • 6
  • overlap tool
  • 3
  • 6
  • find market
  • 3
  • 6
  • research competition
  • 3
  • 6
  • 2021
  • 3
  • 6
Result 7
TitleWhat Is Market Segmentation? What Type Suits Your Business?
Urlhttps://learn.g2.com/market-segmentation
DescriptionMarket segmentation is the process of dividing a target market into smaller, more manageable groups of people that share common characteristics to help businesses optimize their marketing, advertising, and sales efforts. Learn the four common types, top benefits, common mistakes, and how you can apply them to your marketing strategy for max ROI!
Date
Organic Position7
H1What Is Market Segmentation? What Type Suits Your Business?
H2What is market segmentation?
Four types of market segmentation
H3Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
The importance of using market segmentation for your business
Common market segmentation mistakes
How to implement your own market segmentation strategy
H2WithAnchorsWhat is market segmentation?
Four types of market segmentation
BodyWhat Is Market Segmentation? What Type Suits Your Business? January 1, 2021 by Hannah Tow In this post What is market segmentation? Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation The importance of market segmentation Common market segmentation mistakes Ready to implement your own market segmentation strategy? Share Share You’ve spent time and money creating the perfect marketing strategy, and you want your message to resonate well with your potential customers, right? Communication is an art, and it’s incredibly easy for a message to become lost, confused, or avoided altogether as the size of your audience increases. The larger your audience grows, the broader their preferences, needs, and opinions become which can put your marketing message at risk of being irrelevant to the majority of people you’re attempting to reach.  This is exactly why segmenting your target market is crucial. This practice allows you to focus your marketing efforts on individual customer segments so that you can better cater to their specific wants and needs. This method gives your brand an advantage over your competitors because you can prove to potential customers that you understand them and know what they need best. What is market segmentation? Market segmentation is a business practice that brands use to divide their target market into smaller, more manageable groups of people based on common ground they share to optimize their marketing, advertising, and sales efforts. Simply put, customers of each market segment have similar characteristics that businesses can leverage to advance their efforts. The purpose of market segmentation is to introduce a tailored message that will be received successfully. This is advantageous for companies that may have a product or service in the marketplace that boasts multiple benefits or uses for different types of customers.  Accept the fact that you can’t be everything for everybody, and as a marketer, you can’t solve everyone’s problem or appeal to every single person. This is exactly why market segmentation is such an effective growth strategy to implement. Tip: Before you can start with market segmentation, you must have a solid marketing mix. This is your foundation for everything that comes next in this article. Four types of market segmentation. As you can imagine, there are many different approaches you can take when segmenting your target market. This article will walk you through the four main types and real-life market segmentation examples to help you get started. Learning from those who have done it right will help your brand garner that success you’re looking for. Geographic segmentation. Geographic segmentation targets customers based on a predefined geographic border. Differences in interests, values, and preferences vary dramatically throughout cities, states, and countries, so it’s important for marketers to recognize these differences and advertise accordingly. Think about products such as parkas and bathing suits. Parkas will be sold for most of the year in the colder, northern half of the country, whereas southern areas may only be able to find parkas in specialty stores during the wintertime. Bathing suits, on the other hand, are sold year-round in the warmer states but typically only sold during the spring and summer in the cooler states. Another example of geographic segmentation is the iconic fast-food chain, McDonald’s. If you’ve never traveled to another country and stepped foot in a McDonald’s, then you’re in for a surprise! Would you believe that in the Philippines, McDonald’s sells McSpaghetti? And in Hong Kong, they sell ramen flavored french fries? These are all ways McDonald’s has segmented its customers based on geographic location to better cater to food preferences and different cuisines around the world.  “When it comes to paid search campaigns, geographic targeting is the most important segment to get right.” Ryan Moothart PPC Architect, Portent Demographic segmentation. Demographic segmentation divides a market through variables such as age, gender, education level, family size, occupation, ethnicity, income, and more. This form of segmentation is widely used due to specific products catering to obvious individual needs relating to at least one demographic element. Perhaps the most obvious variable of them all, age is a crucial element for marketers to understand thanks to the fast-paced nature of preference changes within the various stages of life. Even media consumption differs greatly between each generation, so it’s important to recognize what your target age range is and which channels they use to consume information to ensure your tailored message reaches them appropriately.  An example of demographic segmentation is when clothing companies cater to multiple age groups. For instance, Lululemon sells athletic clothing to adult men and women of all ages, but they also cater to girls between the ages of 6 and 15. By analyzing their current customer base, Lululemon saw an opportunity to serve a new market and expand their business. Many clothing companies cater to a variety of age groups to reach as many customers as possible. Think H&M, Old Navy, and Zara. All of these companies cater to men, women, and children of all ages, and they have distinct labels, advertising, and styles for each segment.  Psychographic segmentation. Unlike geographic segmentation and demographic segmentation, psychographic segmentation focuses on the intrinsic traits your target customer possesses. Psychographic traits can range from values, personalities, interests, attitudes, conscious and subconscious motivators, lifestyles, opinions, and more.  To understand your target audience on this level, methods such as focus groups, surveys, interviews, audience testing, and case studies can all prove to be successful in compiling this type of conclusion. Think about the lifestyle of someone who lives in a small beach town and surfs for a living versus someone who lives in a big city working in corporate America. These two people have incredibly different wants and needs on a daily basis, and marketers must recognize those differences to be successful. For example, Starbucks does a fantastic job of segmenting its customers based on psychographic traits. We all know that not everyone loves coffee or prefers to drink it, but that doesn’t stop Starbucks from appealing to just about everyone. For the little kids that accompany mom or dad on their morning coffee run, Starbucks sells chocolate milk, cake pops, granola bars, cheese sticks, and more. Of course, those items aren’t strictly for the kids, but those items sure are tempting when you have a fussy one. What about for those sophisticated coffee drinkers who care about quality and bean sources? Starbucks appeals to them by selling a variety of exotic beans sourced from regions all over the world. And what about those who don’t really drink coffee, but all of their friends do and they enjoy an afternoon hang out at Starbucks? Think frappuccinos, lemonades, teas, and juices.  It’s one thing to sell products that can appeal to everyone, but it’s a whole new ball game when those products make every single person feel individually catered to. This is what Starbucks does through its messaging by creating a sense of belonging. They cater to each segments’ wants and needs through targeted marketing campaigns to ensure their coffee brand is inclusive to all, even if you aren’t a coffee drinker.   “The biggest danger is assuming that your market is perfectly sliced and diced just because you're making sales.” John Donnachie Director, ClydeBank Media Behavioral segmentation. Behavioral segmentation has similar measurements to psychographic segmentation, but instead, it focuses on specific reactions and the ways customers go through their decision making and buying processes.  Attitudes towards your brand, the way they use and interact with it, and their knowledge base are all examples of behavioral segmentation. Collecting this type of data is similar to the way you would find psychographic data.  Brand loyalty is an excellent example of behavioral segmentation. While reading this article, I bet that you can think of one brand that you consistently purchase and trust enough to buy its newly launched product without even reading the reviews. This type of brand loyalty produces a consistent buying pattern which is categorized as a behavioral trait. Marketers work hard to get customers to love and stay loyal to their brand for a consistent purchase cycle. To target customers that have great brand loyalty, many companies will offer rewards programs to enhance this behavior with the hope of capturing new loyal customers as well. For example, the makeup and beauty company, Sephora, has an excellent rewards program for its loyal customers. The more you spend at their store, the more points you rack up, which can be redeemed for generous samples. In addition to that, they offer free services, special access to sales, and more!  By targeting and rewarding those who already had an affinity to their brand, Sephora was able to build an impressive community that their target market wants to be a part of.  The importance of using market segmentation for your business . Now that you understand the four major types of market segmentation, you’re probably wondering what the major benefits are to implementing them. The importance of this strategy goes far beyond placing your target market into cohesive segments.  Customer retention. For starters, those cohesive customer segments will lead to great customer retention. Capturing customers at the beginning of a perfectly tailored customer journey will provide an excellent brand experience and increase the likelihood that they will stay loyal to your brand. If every message and product shared with them resonates in some way, they will have a very difficult time saying no to you.  Grow your business . Market segmentation can not only help you discover new ways to reach your current customers but also help you find new markets of potential customers that you haven’t previously reached. Analyzing your customers in-depth will help you uncover unknown needs or problems that they face that your brand can solve. This discovery can lead to new product lines, rebrands, or new brands, all to catapult the growth of your business by appealing to your current customers better, as well as new consumers that were previously uninterested.  Lower spend rate . If you know how to speak to your customers correctly, you’re more efficient with your efforts, which means you spend less money. It’s as simple as that. Gone are the days of your team spinning its wheels trying to come up with something that will stick. By segmenting your customers correctly, you’ll get it right every single time.  Common market segmentation mistakes . Now that you understand the basics of market segmentation and have seen it in practice, it’s time to focus on the common mistakes marketers can make when segmenting their target market for the first time. Creating too small of segments. This can be rather easy to do if you’re trying to ensure that you have every last detail included. If a segment is created too small, you’ll lose the buying power of that group as well as create a segment with non-quantifiable metrics. At the end of the day, every single person is vastly different. You cannot appeal to every aspect of every person. Not updating your strategy as your customer base changes. People change, and they can change fast. It’s in your brand’s best interest to refresh its strategy and resurvey its customers from time to time. Choose a cycle that makes sense for your business and stick to it. This can be a quarterly refresh, yearly, or every couple of years; if you’re seeing big changes within your customers, perform a refresh then, too.  Targeting the segment instead of the money. You may have segmented a large customer base that aligns with your strategy, but if that segment doesn’t have the buying power or a legitimate need for your product, then you won’t have a positive ROI. Market segmentation can be a laborious and complicated task, and mistakes in the beginning stages may seem inevitable. Being aware of these common downfalls will better prepare you and your team so you don’t make them in the future. How to implement your own market segmentation strategy. It’s time to put what you’ve learned to use. Here are five steps that lay the process out simply, plus the two strategies that are most commonly used to guide them. Once you’ve got these basics down and you have a solid foundation for your strategy, branch out, and make it uniquely your own.  Before getting started, consider using marketing automation software to streamline and measure your efforts effectively. As your strategy becomes more complex and your campaigns grow larger, you’ll be happy with the amount of time and resources you were able to save from having everything automated from the very beginning.  Concentrated strategy . As the name suggests, a  concentrated marketing strategy is when a company chooses only one market to focus all of their time, money, and efforts on. This strategy is usually chosen by smaller businesses or those that are just taking off and starting to make a name for themselves in the marketplace. Success is typically seen when targeting a smaller group of people since the strategy has to appeal to the entire segment. Appealing to an entire segment becomes challenging when the segment is too large. You should be aware that when using this strategy, your growth opportunity is limited. Once you’ve capitalized on your market and are seeing great success, consider tapping into other similar markets to continue to drive growth.  Differentiated strategy. On the other hand, a differentiated marketing strategy is when a company focuses on two or more markets. Companies that utilize this strategy market their products to many different segments, they just change their messaging to appeal to all of the differences. Although a differentiated marketing strategy requires a lot more effort, time, and money than a concentrated marketing strategy would, it typically yields more success since there are many more avenues to rake in a profit.  1. Define your market. Where does your brand fit within the current market landscape? Is there a need for the solution you promise to provide? How large is the market? These are all important questions to consider when starting this step. 2. Segment your market. This is where it gets fun. Decide which of the four segmentation methods you’re going to use, but don’t feel confined by one segmentation method. It’s common for brands to implement more than one segmentation technique and take a combination approach, so play around with each and find the perfect mix for your brand. 3. Understand your market. Ask your target market the questions that relate to the segmentation categories you chose. You should get to know your target market through and through at this step. You can use surveys, focus groups, polls, and more to obtain your answers. Make sure you’re asking questions that will provide quantifiable answers. 4. Build your customer segments. Interpret the responses you received to create dynamic customer segments that are unique to your brand. Make sure that you’re focusing on the buying power of the segments and not creating any that are too small. Look over the common mistakes one last time to ensure you’re not making any!  5. Test your strategy. Ensure that you have interpreted your responses accurately by testing it on your target market. Implement conversion tracking early. It’s one of the best ways to determine the effectiveness of your strategy. If you’re not relating to your customers with the segments you’ve created, then you’ll need to relook at your survey methods and analysis. Be sure that the strategy you choose has unique characteristics from others in the marketplace so you can stand out.  By determining the proper strategy for your needs and following the basic steps outlined above, you can ensure that your market segmentation strategy will be effective and successful.  Take your marketing strategy to the next level Market segmentation is a highly effective strategy for every marketing team. It proves to your customers that you understand them by providing a tailored message that resonates with specific facets of their lives. Knowing how to get a message across successfully will help your brand grow exponentially. Just remember, your success won’t last long if you’re not testing your strategy constantly. To be competitive you must always be on top of your game. Market segmentation comes down to knowing your customer base and providing a personalized experience for them. For a seamless customer journey across your segments, learn how to implement an omnichannel marketing strategy next. Have a question? If you have any questions or comments on what you're reading, click below to chat directly with the author! Join in! Hannah Tow Hannah is a former content marketing associate at G2. She graduated from the University of Missouri with a degree in Journalism. In her free time, Hannah enjoys running with her dog, Teddy, traveling to new and exciting places, and capturing the beautiful places she travels to with her DSLR camera. (she/her/hers) Have a question? If you have any questions or comments on what you're reading, click below to chat directly with the author! Join in! Recommended Articles. Marketing What Is Ephemeral Content Marketing (+Why You Need It in 2019). Over the last few years, ephemeral content has become a popular social media phenomenon. by Hugh Beaulac Marketing What Is Co-branding? (+Great Examples in the Marketplace). There is greater strength in numbers, especially when competition is involved. by Hannah Tow Marketing Shopper Marketing 101: What It Is and How It Works. Ever wonder who decided to put names on Coca-Cola bottles? by Deirdre O'Donoghue Marketing What Is Ephemeral Content Marketing (+Why You Need It in 2019). Over the last few years, ephemeral content has become a popular social media phenomenon. by Hugh Beaulac Marketing What Is Co-branding? (+Great Examples in the Marketplace). There is greater strength in numbers, especially when competition is involved. by Hannah Tow Never miss a post. Subscribe to keep your fingers on the tech pulse. By submitting this form, you are agreeing to receive marketing communications from G2.
Topics
  • Topic
  • Tf
  • Position
  • market
  • 46
  • 7
  • segmentation
  • 46
  • 7
  • customer
  • 38
  • 7
  • strategy
  • 30
  • 7
  • segment
  • 25
  • 7
  • marketing
  • 24
  • 7
  • brand
  • 23
  • 7
  • market segmentation
  • 22
  • 7
  • time
  • 14
  • 7
  • target
  • 14
  • 7
  • product
  • 10
  • 7
  • target market
  • 9
  • 7
  • understand
  • 9
  • 7
  • age
  • 9
  • 7
  • business
  • 9
  • 7
  • person
  • 9
  • 7
  • company
  • 9
  • 7
  • example
  • 9
  • 7
  • type
  • 8
  • 7
  • geographic
  • 8
  • 7
  • message
  • 8
  • 7
  • marketing strategy
  • 7
  • 7
  • psychographic
  • 7
  • 7
  • common
  • 7
  • 7
  • effort
  • 7
  • 7
  • cater
  • 7
  • 7
  • group
  • 7
  • 7
  • question
  • 7
  • 7
  • marketer
  • 6
  • 7
  • appeal
  • 6
  • 7
  • ensure
  • 6
  • 7
  • starbuck
  • 6
  • 7
  • coffee
  • 6
  • 7
  • geographic segmentation
  • 5
  • 7
  • demographic segmentation
  • 5
  • 7
  • behavioral segmentation
  • 5
  • 7
  • customer segment
  • 5
  • 7
  • hannah tow
  • 4
  • 7
  • psychographic segmentation
  • 4
  • 7
  • mcdonald
  • 4
  • 7
  • customer base
  • 4
  • 7
  • ephemeral content
  • 4
  • 7
  • segmentation demographic segmentation
  • 3
  • 7
  • market segmentation strategy
  • 3
  • 7
  • segmenting target market
  • 3
  • 7
  • segmentation demographic
  • 3
  • 7
  • segmentation strategy
  • 3
  • 7
  • time money
  • 3
  • 7
  • potential customer
  • 3
  • 7
  • segmenting target
  • 3
  • 7
  • tailored message
  • 3
  • 7
  • single person
  • 3
  • 7
  • target customer
  • 3
  • 7
  • customer based
  • 3
  • 7
  • company cater
  • 3
  • 7
  • current customer
  • 3
  • 7
  • brand loyalty
  • 3
  • 7
  • buying power
  • 3
  • 7
  • content marketing
  • 3
  • 7
Result 8
TitleMarket segmentation: What it is, Types & Examples | QuestionPro
Urlhttps://www.questionpro.com/blog/what-is-market-segmentation/
DescriptionMarket segmentation consists of sectioning the target market into smaller groups that share similar characteristics. Learn more
Date
Organic Position8
H1Market segmentation: What it is, Types & Examples
H2What is market segmentation?
Types Of Market Segmentation
Market segmentation objectives
Advantages of market segmentation
Conclusion
H3Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
5 steps to implement a market segmentation strategy
Related Posts
Tuesday Morning CX Thoughts — Making Consumer Insights Matter
Participant observation: What it is, types & uses
Holiday Shopping Trends 2021
POS data analysis: What it is, uses & why you need it
Real estate market analysis: What it is & How to do it
Patient Satisfaction: What it is & how to improve it
H2WithAnchorsWhat is market segmentation?
Types Of Market Segmentation
Market segmentation objectives
Advantages of market segmentation
Conclusion
BodyMarket segmentation: What it is, Types & Examples In this article we will learn what market segmentation is and how it allows you to correctly direct your marketing efforts to the right audience to ensure the success of your business.  Before going deeper, we will define what market segmentation is and the benefits of this method that helps you to know your target audience.  What is market segmentation? Market segmentation consists of sectioning the target market into smaller groups that share similar characteristics, such as age, income, personality traits, behavior, interests, needs or location.  These segments can be used to optimize products, marketing, advertising and sales efforts. Segmentation allows brands to create strategies for different types of consumers, depending on how they perceive the overall value of certain products and services. In this way they can introduce a more personalized message with the certainty that it will be received successfully.  Now that you know what market segmentation is, let’s talk about the different types that exist. Types Of Market Segmentation. There are 4 types of market segmentation. Below, we describe each of them:  Geographic segmentation . Geographic segmentation consists of creating different groups of customers based on geographic boundaries.  The needs and interests of potential customers vary according to their geographic location, climate and region, and understanding this allows you to determine where to sell and advertise a brand, as well as where to expand a business. Demographic segmentation. Demographic segmentation consists of dividing the market through different variables such as age, gender, nationality, education level, family size, occupation, income, etc.  This is one of the most widely used forms of market segmentation, since it is based on knowing how customers use your products and services and how much they are willing to pay for them.  Psychographic segmentation. Psychographic segmentation consists of grouping the target audience based on their behavior, lifestyle, attitudes and interests.  To understand the target audience, market research methods such as focus groups, surveys, interviews and case studies can be successful in compiling this type of conclusion. Behavioral segmentation. Behavioral segmentation focuses on specific reactions, i.e. the consumer behaviors, patterns and the way customers go through their decision-making and purchasing processes. The attitudes the public has towards your brand, the way they use it and their awareness are examples of behavioral segmentation. Collecting this type of data is similar to the way you would find psychographic data. This allows marketers to develop a more targeted approach. Market segmentation objectives. There are different market segmentation objectives. Here we tell you what each of them are: Product: Creating successful products is one of the main objectives of organizations and one of the reasons why they conduct market research. This allows you to add the right features to your product and will also help you reduce costs to meet the needs of your target audience. Price: Another objective of market segmentation is to establish the right price for your products. Identifying which is the public that will be willing to pay for it.  Promotion: It helps you to target the members of each segment and select them in different categories so that you can direct your strategies appropriately.  Place: The ultimate goal of segmentation is to decide how you offer a product to each group of consumers and make it pleasant to them.  5 steps to implement a market segmentation strategy. In order to implement a strategy, you must not only know what market segmentation is. It is very important to know how to apply this method. That is why we have for you a guide that will help you: Define your market: At this point of the segmentation you should focus on discovering how big the market is, where your brand fits and if your products have the capacity to solve what it promises. Segment your market: This step consists of choosing which of the types best suits your brand. Understand your market: Ask your customers the right questions, depending on the type you chose. You must know your target audience in detail. You can use online surveys to get their answers. Build your customer segment: After collecting responses, you need to perform data analysis to create dynamic segments unique to your brand. Test your strategy: Make sure you have correctly interpreted your survey data by testing it with your target audience. This will help you to revisit your market segmentation strategies and make the necessary changes.  Advantages of market segmentation. Knowing what market segmentation is and the benefits it has for your organization will help you implement it correctly. Here are some of its advantages: Create stronger marketing messages: When you know who you are targeting, you can create strong, personalized messages that respond to the needs and wants of your target audience. Find the ideal marketing strategies: You may not know which is the right strategy to attract the ideal audience. Market segmentation allows you to know the audience, create a plan that will work successfully and determine better solutions and methods to reach them. Design targeted advertising: Market segmentation allows you to target your advertising to the audience in a successful and effective way, knowing their age, location, buying habits, interests, etc. Attract potential customers: By sending direct and clear marketing messages, you attract the right audience and are more likely to convert them into buyers. Differentiate your brand from the competition: By creating messages specific to your value proposition, you can stand out from the competition. Segmentation allows you to differentiate your brand by focusing on specific customer needs and characteristics. Identify your niche market: Market segmentation helps you discover your niche market. Identify the niche with the broadest audience and whether it has needs that your brand can effectively address. Focus your efforts: Allows you to identify new marketing opportunities and avoid distractions that take you away from your target market. Create a customer connection: When you know what your customers want and need, you can create effective strategies. This allows you to create strong bonds between your brand and the customer to create brand loyalty and customer satisfaction.  Conclusion. Market segmentation is a highly effective strategy for organizations because it allows them to know which customers care about them and understand their needs enough to send a message that ensures brand success.   Now that you know what market segmentation is, start your research today! Gather the information you need to learn more about your target audience using online surveys.  Contact us and we will help you collect the data you need. Related Posts. Tuesday Morning CX Thoughts — Making Consumer Insights Matter. Participant observation: What it is, types & uses. Holiday Shopping Trends 2021. POS data analysis: What it is, uses & why you need it. Real estate market analysis: What it is & How to do it. Patient Satisfaction: What it is & how to improve it. Help center Live Chat SIGN UP FREE Tour Sample questions Sample reports Survey logic Branding Integrations Professional services Security Products Survey Software Customer Experience Workforce Communities Audience Polls Explore the QuestionPro Poll Software - The World's leading Online Poll Maker & Creator. Create online polls, distribute them using email and multiple other options and start analyzing poll results. Research Edition LivePolls Resources Blog Articles eBooks Survey Templates Case Studies Training Webinars Coronavirus Resources Pricing All Plans Non-Profit Academic Features Comparison Qualtrics Explore the list of features that QuestionPro has compared to Qualtrics and learn how you can get more, for less. SurveyMonkey VisionCritical Medallia Solutions Market Research Survey Software Real-time, automated and advanced market research survey software & tool to create surveys, collect data and analyze results for actionable market insights. Employee Survey Software Employee survey software & tool to create, send and analyze employee surveys. Get real-time analysis for employee satisfaction, engagement, work culture and map your employee experience from onboarding to exit! Customer Survey Software Robust, automated and easy to use customer survey software & tool to create surveys, real-time data collection and robust analytics for valuable customer insights. Community Survey Software Use the community survey software & tool to create and manage a robust online community for market research. Collect community feedback and insights from real-time analytics! Web Survey Software Powerful web survey software & tool to conduct comprehensive survey research using automated and real-time survey data collection and advanced analytics to get actionable insights. Mobile Survey Software Leverage the mobile survey software & tool to collect online and offline data and analyze them on the go. Create and launch smart mobile surveys! Business Survey Software Powerful business survey software & tool to create, send and analyze business surveys. Get actionable insights with real-time and automated survey data collection and powerful analytics! Enterprise Survey Software Real time, automated and robust enterprise survey software & tool to create surveys. collect data and analyze responses to get quick actionable insights. Email Survey Software Robust email survey software & tool to create email surveys, collect automated and real-time data and analyze results to gain valuable feedback and actionable insights! SMS Survey Software Use the power of SMS to send surveys to your respondents at the click of a button. SMS survey software and tool offers robust features to create, manage and deploy survey with utmost ease. Offline Surveys Customer Satisfaction Surveys Net Promoter Score (NPS) Learn everything about Net Promoter Score (NPS) and the Net Promoter Question. Get a clear view on the universal Net Promoter Score Formula, how to undertake Net Promoter Score Calculation followed by a simple Net Promoter Score Example. Conjoint Analysis GDPR & EU Compliance Likert Scale Complete Likert Scale Questions, Examples and Surveys for 5, 7 and 9 point scales. Learn everything about Likert Scale with corresponding example for each question and survey demonstrations. Company About us Executive Team Advisory Board Clients Partners Testimonials In the news Careers Media Kit Brand Contact Us QuestionPro in your language. Encuestas Online Pesquisa Online Umfrage Software برامج للمسح 調査ソフトウェア Logiciel d'enquête Awards & certificates. © 2021 QuestionPro Survey Software | 800-531-0228 Sitemap Privacy Statement Terms of Use Cookie Settings . Creating a survey with QuestionPro is optimized for use on larger screens - Though you're welcome to continue on your mobile screen, we'd suggest a desktop or notebook experience for optimal results. Back to QuestionPro.com Continue to Login
Topics
  • Topic
  • Tf
  • Position
  • survey
  • 47
  • 8
  • market
  • 38
  • 8
  • segmentation
  • 36
  • 8
  • software
  • 24
  • 8
  • market segmentation
  • 23
  • 8
  • survey software
  • 22
  • 8
  • create
  • 19
  • 8
  • customer
  • 18
  • 8
  • audience
  • 15
  • 8
  • brand
  • 13
  • 8
  • data
  • 13
  • 8
  • target
  • 12
  • 8
  • type
  • 11
  • 8
  • strategy
  • 11
  • 8
  • survey software tool
  • 10
  • 8
  • software tool
  • 10
  • 8
  • product
  • 10
  • 8
  • tool
  • 10
  • 8
  • real
  • 9
  • 8
  • target audience
  • 8
  • 8
  • real time
  • 8
  • 8
  • research
  • 8
  • 8
  • online
  • 8
  • 8
  • insight
  • 8
  • 8
  • time
  • 8
  • 8
  • software tool create
  • 7
  • 8
  • tool create
  • 7
  • 8
  • net promoter
  • 6
  • 8
  • marketing
  • 6
  • 8
  • message
  • 6
  • 8
  • collect
  • 6
  • 8
  • automated
  • 6
  • 8
  • analyze
  • 6
  • 8
  • robust
  • 6
  • 8
  • net
  • 6
  • 8
  • promoter
  • 6
  • 8
  • net promoter score
  • 5
  • 8
  • market research
  • 5
  • 8
  • promoter score
  • 5
  • 8
  • actionable
  • 5
  • 8
  • employee
  • 5
  • 8
  • score
  • 5
  • 8
  • segmentation consist
  • 4
  • 8
  • data analyze
  • 4
  • 8
  • actionable insight
  • 4
  • 8
  • real time automated
  • 3
  • 8
  • tool create survey
  • 3
  • 8
  • audience market
  • 3
  • 8
  • behavioral segmentation
  • 3
  • 8
  • survey data
  • 3
  • 8
  • collect data
  • 3
  • 8
  • time automated
  • 3
  • 8
  • create survey
  • 3
  • 8
  • survey collect
  • 3
  • 8
  • employee survey
  • 3
  • 8
  • data collection
  • 3
  • 8
  • mobile survey
  • 3
  • 8
  • business survey
  • 3
  • 8
  • email survey
  • 3
  • 8
  • likert scale
  • 3
  • 8
Result 9
TitleMarket Segmentation: The No-Nonsense Guide (w/ Examples)
Urlhttps://www.nutshell.com/blog/market-segmentation
DescriptionMarket segmentation is all about qualifying companies (or people) into groups that respond similarly to marketing strategies
Date
Organic Position9
H1Market segmentation: The no-nonsense guide (w/ examples)
H2What is market segmentation?
The 4 most common types of segments
6 less common types of market segmentation
What are the benefits of market segmentation?
Market segmentation strategies (and their pros and cons)
How to do your own market segmentation in phases
Market segmentation in a nutshell
Buying a lead list: The pros, the cons, and the things that might land you in jail
Eight sales and marketing vanity metrics to avoid at all costs
What's the craziest thing you've ever done to make a sale?
H3Ready to try Nutshell for Free?
Skip ahead:
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
Geographic segmentation
Price segmentation
Firmographic segmentation
Generational segmentation
Life stage segmentation
Seasonal segmentation
Technographic segmentation
The benefits of market segmentation are:
Concentration strategy
Multi-segment strategy
Phase 1: Gather the data
Phase 2: Sort the data into segments
Phase 3: Plug in your marketing channels
Educational resources:
Marketing webforms: How to build them and where to put them
Nutshell earns first-ever ‘Leader’ placement in G2’s Winter 2022 Grid® Report for Email Marketing
What’s the difference between hunter, farmer, and trapper sales personas?
H2WithAnchorsWhat is market segmentation?
The 4 most common types of segments
6 less common types of market segmentation
What are the benefits of market segmentation?
Market segmentation strategies (and their pros and cons)
How to do your own market segmentation in phases
Market segmentation in a nutshell
Buying a lead list: The pros, the cons, and the things that might land you in jail
Eight sales and marketing vanity metrics to avoid at all costs
What's the craziest thing you've ever done to make a sale?
BodyMarket segmentation: The no-nonsense guide (w/ examples)Jack ViragGrowth Marketing Manager, NutshellJack ViragGrowth Marketing Manager, NutshellSHARE Link Copied!Ready to try Nutshell for Free?Thank you! Your submission has been received!Oops! Something went wrong while submitting the form.Marketing to the wrong segment can feel like barking up the wrong tree, or more specifically, barking up tens of thousands of wrong trees.Market segmentation didn't always exist:Since the invention of funnel reports, salespeople have been standing around whiteboards trying to crank up their conversion rates.Nearly everybody in the industry has, at one point or another, heard someone reasoning that simply adding more people to the funnel will improve their sales numbers while preserving their conversion rate. “Of 10 prospects, 5 bought the product. This must mean that if we market to one million people, 500,000 will buy.”Similarly, if you’re a sales rep making 30 calls a day, you might reasonably extrapolate that making 60 calls a day would double your closed deals. Or, if you send prospects 1-2 emails a week, you might consider sending 3-4 emails instead. Unfortunately, it’s not that straightforward.Sales processes are complicated. What one audience might find valuable might just be noise for another. For instance, a restaurant mailing BOGO offers might have a high success rate on residents who live within one freeway exit’s distance of your establishment.However, mailing those same BOGO offers across state lines would see those conversation rates drop down near zero. This no-brainer is a textbook example of market segmentation as it illustrates how demographics respond differently to marketing strategies.Skip ahead:. What is market segmentation? The 4 most common types of market segmentation 6 less common types of market segmentation What are the benefits of market segmentation? Market segmentation strategies How to do your own market segmentation Market segmentation in a nutshell What is market segmentation?Market segmentation is the process of qualifying companies (or people) into groups that respond similarly to marketing strategies. This is the first critical step in creating a sales process tailored to resonate across multiple demographics.Your marketing segmentation strategy will be mainly influenced by what your product is, and which types of companies are already buying it.An ideal market segment is:MeasurableLarge enough to earn profitStable, not going to vanish after a short timeReachable by your marketing strategiesHomogenous and responds similarly to your marketing strategiesThe expression “market segmentation” was first coined by Wendell R. Smith in his 1956 publication Product Differentiation and Market Segmentation as Alternative Marketing Strategies. Smith wrote that modern marketing appeals to selective rather than primary buying motives.In other words, consumers are actively contrasting products against one another rather than simply purchasing a product to satisfy an immediate need. This realization was the inception of the modern market segmentation we practice today.Before 1956, there wasn’t a huge market variety, and general stores tended to carry only one or two brands’ versions of the same product. At the time of the publication, more and more emerging brands were offering similar products and thus needed to differentiate themselves with branding and by targeting different markets.It wasn’t enough to just manufacture ketchup, you had to identify your brand as America’s ketchup, or kids’ ketchup, or fancy ketchup.This 1970s Virginia Slims advertisement is marketing cigarettes towards women. Thankfully we’ve come a long way (baby) from terrible advertising. The 4 most common types of segments. Savvy salespeople and marketers categorize their prospects into customer segments in order to keep their efforts focused and effective. When your prospects are grouped correctly, it’s much easier to target specific groups and tailor your efforts for maximum impact. Below are the most common forms of segmentation.Demographic segmentation. Demographic market segmentation is the most commonly used form of market segmentation and entails categorizing your market based on age, gender, income, profession, race, religion, education, location, family situation, etc.Demographic segmentation examples:. A great example of this: Switch to the cartoon channel and check out those commercials. Do Nerf guns and neon-colored slime appeal to someone your age? Yeah us too, bad example.A recruiter running one of those mostly annoying LinkedIn InMail campaigns. Ideally, they’d be targeting people who are currently looking for a job. Yet, somehow they manage to flood my inbox daily.Psychographic segmentation. More specific characteristics are categorized under the umbrella of psychographic segmentation. Less tangible than demographic segmentation, this classification method includes details like lifestyle, personality, beliefs, values, and social class.This evaluation is important because two individuals can possess identical demographic information but make purchasing decisions completely differently, and thus require different marketing.Psychographic segmentation examples:. Health and wellness advertisements might not go a long way with someone who prefers to spend their money on video games and energy drinks, even if they work in the same industry and live in the same apartment building.Advertisements for large social gatherings (events, clubs, bars) might not appeal to extroverts who would much rather snuggle up with a book than being surrounded by other people.Behavioral segmentation. At its core, behavioral segmentation is the act of categorizing prospects based on their actions, usually within your marketing funnel. For instance, prospects who visited a landing page for an upcoming event might benefit from receiving a personalized invitation.Segmenting your market based on behaviors is typically done by marketers within their marketing automation software, but any company with a mailing list has already performed behavioral segmentation simply by tracking prospects who have signed up to receive emails.Behavioral segmentation examples:. Grammarly sends new users who have stopped using their chrome extension for a few days an email which addresses common reasons of churn - technical difficulties, not seeing the value, not enough features, etc.Sending emails to website visitors who have left items in their cart. “But wait…come back.”A retargeting campaign that only displays ads to people who have previously purchased an item.Geographic segmentation. The most straightforward of the gang, geographic market segmentation takes into account prospects’ locations to help determine marketing strategies. Although SaaS sales are relatively unaffected, a salesperson of gigantic coats knows to avoid pitching to Arizona residents.Geographic segmentation variables and examples:. Climate: Swimwear brands shouldn’t be targeting Alaska residents in January.Cultural preferences (based on location): For obvious reasons, the McDonald's in Germany sells beer.Population type: A bicycle company may segment its audience differently depending on the population type - rural (mountain bikes; thicker tires; more durable), urban (road bikes; thin tires; lightweight), etc.Density: A giant strip mall may require a high density of foot traffic to thrive. 6 less common types of market segmentation. Price segmentation. Price segmentation is the process of altering the price of similar products and services to different consumer groups.If you still have a student ID to get those sweet discounts, even though you graduated years ago, then you’ve experienced price segmentation. Or, if you ever forced your kids to pretend to be under a certain age to qualify for the “kids eat free” special, then you understand the power and utility of price segmentation.However, price segmentation can get much more granular. It can be used to identify customers who may be willing to pay more for a particular product or service that they perceive to be more valuable.Done correctly, price segmentation can capture the maximum amount of revenue for each transaction.Price segmentation examples:. Broad: Senior discount, veteran discount, coupons, etc.Granular: Computer processors are priced differently when sold to a company as a part (like inside an iMac) than when sold to a consumer as a standalone product. For one, this is because of bulk discounts, but it’s also because the processor may be a large chunk of the total cost of goods for the iMac. Apple’s high price sensitivity means the computer processor manufacturer doesn’t have much flexibility in its pricing. Even more granular: A marketing consultancy may base their prices entirely on the value they can generate for each of their client’s unique situations. They may charge a small business $75/hr for a low-level consulting call. And they may charge a multinational corporation $2,000/hr to review their Q1 marketing budget.Firmographic segmentation. Firmographic segmentation is similar to demographic segmentation...but for a firm. Take a second to let the creativity of the wording waft over you.Instead of categorizing consumers based on age, location, income, etc, firmographic segmentation categorizes companies based on industry, annual revenue, job function, company size, location, status, performance, etc.For B2B marketers, utilizing firmographic segmentation is non-negotiable to a high-performing marketing strategy.Just as the demographic segmentation variables can help you form a buyer persona at the consumer level, firmographic segmentation can help you develop a buyer persona at the company level.Firmographic segmentation examples:. Nutshell running different ads for different industries - real estate, finance, legal firms, etc.A B2B sales team only targeting companies with revenues over $100m.Generational segmentation. “Ok, boomer” -  Something you’ve either been on the giving or receiving end of at some point in your life - whether you know it or not.Generational segmentation is almost comparable to the “age” variable in demographic segmentation. However, generational market segmentation goes beyond age by considering the difference in preferences, habits, lifestyles, and attitudes of a particular generation.It’s self-evident that the generations are vastly different. Someone born in the 1960s will likely have experienced a different culture than someone born in the 2000s.According to a segmentation survey conducted by Buzzstream and Fractl:Baby Boomers consume the most contentBaby Boomers consume a larger portion of their content in the morningGen Xers are the least active tablet usersMore than 25% of Millennials use their mobile phones as their primary content viewing deviceBaby Boomers view more world news and politics than other generationsMillennials are more likely to share memes than other generationsBaby Boomers are more likely to share videos than other generationsGen Xers are more likely to share content on TwitterGenerational segmentation examples. Utilizing more memes on Facebook to target a larger percentage of Millennials.Altering your content publishing schedule to mornings to target a larger percentage of Baby Boomers.Life stage segmentation. Life stage segmentation is the process of dividing your market based on the life stage of your target audience. Someone who is married with 5 kids may respond well to an emotional advertisement about convertibles during their midlife crisis. Life stage segmentation examples. Ads about life insurance may not appeal to sophomores in college, but they may appeal to someone who just started a familySomeone who just entered the workforce for the first time may be more interested in a new apartment than someone who is retired.Seasonal segmentation. Seasonal segmentation targets people based on their purchasing habits during certain periods of the year. It can range from actual seasons (spring, summer, fall, winter), events (Coachella, Super Bowl), and holidays (Christmas, Mother’s Day).Seasonal segmentation examples. A local company selling crop tops and hangover antidotes may want to target people based on the timing of Coachella.A flower shop that specializes in same-day delivery may want to ramp up their ad spend targeting forgetful sons and daughters.Technographic segmentation. Much like firmographic market segmentation, technographic segmentation only applies to B2B audiences. It’s used to target companies based on the types of technology they’re using. Whether it’s a CRM, a website CMS, or a niche-specific software tool, utilizing technographic segmentation can help enhance sales and marketing efforts.Technographic segmentation examples. A company that develops WordPress plugins would have no business targeting companies that use a different CMS, like Wix.Let’s say a SaaS company just launched a valuable cross-compatible integration with another app. It would make sense for them to the target businesses using the app they just integrated with. What are the benefits of market segmentation?Market segmentation isn’t just for big businesses. In fact, smaller teams whose efforts aren’t yet focused benefit the most from segmenting their audiences.When companies are still struggling to get off the ground and maintain their momentum, it’s easy to get too hung up on what has worked in the past to try marketing to new groups.The benefits of market segmentation are:. Bang for your buck. Market segmentation can help companies get the most out of their marketing efforts. With tailor-made, demographic-specific messages and advertising, companies can more effectively communicate with their audiences, begin boosting their conversion rates, and actually spend less on broad advertising.Better conversion rate. Simply put, the more information you have about your various audiences, the more specificity you can add to your outreach, which will help your prospects convert more easily.Customer retention. By marketing towards customers who have already gone through their own buyer’s journey, segmentation makes it easier to keep them engaged and pitch them with occasional upgrades. And with their segment data you’ve captured, you know how to talk to them.Expanding your efforts. Segmentation can be a great way to pursue new markets. Clothing retailers are a great example: The Gap clothing company, after studying its audience, determined it would be advantageous to launch a new brand called Baby Gap, and completely reoptimized their business from a supply chain level just to do so.Because of all the information you gather about your prospects, proper segmentation can help you determine if there’s a case to explore new endeavors such as this.Without market segmentation, companies are at risk of getting pulled into a self-perpetuating cycle, wherein they inadvertently market to a specific demographic, and then assume that that demographic is their only viable demographic because they’re the only ones buying:“Everyone who responded to our direct mailer was over the age of 65. This must mean that our target market is only people 65 or older.” Market segmentation strategies (and their pros and cons). Once you’ve completed your market segmentation and you have very clear insight into your various marketable audiences, you’re in a great position to create an impactful marketing strategy. Every strategy is different but most of them follow one of two fundamental outlines:Concentration strategy. Concentration strategy is when a company determines that their efforts are best focused solely on a single market segment. This strategy is particularly great for small, growing businesses who have demonstrated a viable use case within a specific market. Focusing on one segment will allow the company to invest more time, energy, and resources into one specific market, which minimizes advertising spend and potentially mitigates wasting efforts across multiple segments.Concentration strategy is like putting all your cards on the table—if it doesn’t work out, it can end badly. If the market segment hasn’t been properly vetted and turns out to be a bust, all of your marketing efforts could be wasted. Be sure to do some careful planning and execute thorough market testing before committing your business to a single market segment.Pros: High conversion percentages, repeatable marketing practices, less marketing spendCons: “All-or-nothing,” growth potential is limited to segment sizeMulti-segment strategy. Multi-segment marketing (or differentiated marketing,) is when a company’s marketing strategies are designed to advertise one product to more than one market segment.Although apparently “safer” than concentration strategy, multi-segment marketing is a much larger tax on a company’s marketing spend, as it requires completely different campaigns for each market segment.However, if a particular segment is extremely receptive and converts well, it’s easy to tailor your strategy to market more directly to that segment. Multi-segment marketing is “safer” from the standpoint that if a company advertises across numerous channels, they’re bound to scrape up some revenue from one of them.The downside is that it’s a less targeted use of a company’s marketing efforts, and thus could result in a potentially lower average ROI than a concentrated one-segment strategy.Pros: Safer, appeal to more consumers, diverse marketing, high growth potentialCons: Lower conversion percentages, greater marketing spendLearn more: An Introduction to Market Segmentation as Strategic ToolDOWNLOADThe best sales email is the one that gets read.Download the Complete Guide to Writing MUCH Better Sales Emails for over 50+ pro tips on how to make your emails stand out in a crowded inbox.GET THE GUIDE How to do your own market segmentation in phases. Phase 1: Gather the data. First things first, it’s time to gather data so that you can use it to form your market segments. There are many ways to go about it—some people like to go with pre-made lead lists, others prefer to do their own research.If you’re in the latter category (you probably should be), you can frame your searches along the following categories.Researching by company size:. Size can mean a number of things, but is most often measured by the number of employees, number of customers, or overall sales revenue a company claims. Some companies have transparency on their websites, which makes reaching out to the correct person much easier.Using free references like Bloomberg can help uncover basic information about a company in question.Researching by industry:. It’s unlikely that your product is applicable across all industries, which is why industry segmentation exists. Industry segmentation will help you ensure that you’re not wasting your time by targeting a company with no need for your product.Some companies have nondescript names like Amphastar and Wong, Doody, Crandall, and Wiener, so make sure you know what they actually do before you place them into a category.Researching by location:. If you’re offering a location-specific product or service, like landscaping services within the local community, your geographic market segmentation is probably pretty airtight: You probably use handy tools like lead maps, and engage in local marketing wherever possible.For other industries, like IT staffing, your reach might be international. Whatever your product, location is a crucial thing to know about a company, because it will help you decide which sales tactics to use, and when to send your emails if you’re communicating across time zones, at the least.Researching by needs:. This method of segmentation entails qualifying companies based on whether they need your products or services. While this definition is straightforward, the process behind making this determination may not be, depending on what you’re offering.If you sell landscaping services, you can use Google Maps to look up a company’s HQ. If their office is in a tower in New York City, they probably don’t need any landscaping.Capturing data in web forms:. Web forms are the industry standard for capturing prospect data. The practice is simple: if you have high-quality content that would provide a lot of value to your site visitors, you can place that content behind a web form that requires users to submit their name, email address, and other information before they can see it.The form’s questions should be light and noninvasive, as to not discourage users from filling it out, but constructive enough to give you enough context when communicating with them in the future.Surveys. Somewhat of a niche marketing method, surveys can be tactically deployed to get highly specific information from potential buyers in exchange for highly specific content or rewards.The standard survey format usually offers a tangible reward—like a gift card or a free product—in exchange for a decent chunk of voluntary user data.Although somewhat abstract, surveys are still one of the best methods of obtaining hyper-targeted data about users and companies. Because, let’s face it, no one is going to advertise their meme habit right on their company website.SikePhase 2: Sort the data into segments. There are many ways to go about this process. Most involve expensive analysts, marketers, and lots and lots of time. Although the DIY route is faster, it is no substitute for a comprehensive market segmentation strategy.Assuming time and money are an obstacle, you can approximate your own market segmentation by compiling your data into one single source and running filters on it to manually group your prospects and companies together by segments.Remember, ask yourself the following:Is this segment measurable?Is this segment large enough to earn a profit?Is this segment stable, and not going to vanish after a short time?Is this segment reachable with my marketing strategies?Is this segment homogenous, and will they respond similarly to my marketing strategies?This sample data template can help you get started! (Just make a copy so you can add your own customer data.) Phase 3: Plug in your marketing channels. Now that your segments have been firmly established, it’s time to connect the dots and breathe life into your marketing. This means establishing a plan for each of your marketing tools and channels, and coming up with real ways to reach your segments with them.You’ll be attributing different marketing and sales tactics to each stage of your pipeline, and determining what sticks. The good news is that your market segments are clearly defined and you’ll be able to speak to them clearly.The real challenge is continuously improving your efforts with trial and error to get the best possible conversion rates.There’s a good, old-fashioned way to map this out quickly and easily:Draw your pipeline stages horizontally across a sheet of paperAbove each pipeline stage, jot your marketing channels, like Linkedin, emails, or webinars, with blank space in between themBelow each marketing channel, write exactly how you will use this tool at this pipeline stage, like “email prospects a link to a recorded webinar”Repeat this exercise for each market segment to help establish a concise and repeatable process for marketing towards your various audiences. You can fully flesh out your segmented marketing strategy by configuring your sales software and email automation around the outline you’ve created, and then make tweaks as needed.To this end, some CRMs have reporting and performance tracking as well as custom reporting to help you figure out what’s working and what needs to change. Market segmentation in a nutshell. Now you’ve got your demographics clearly segmented, your strategy figured out, and your sales processes mapped tightly to your market segments.Because of this, you should have a clear understanding of how to talk to your prospects, and how to differentiate your outreach efforts based on the market segment.The challenges that lie ahead are rooted in constantly adjusting your marketing—testing your messages, your tactics, and measuring your audiences’ responses. If you’re ready to put your sales and marketing automation into action, get started with a free nutshell trial today!Educational resources:. Sales tactics encyclopedia: 19 strategies for prospecting, qualifying, and closingThe complete guide to researching sales prospects: 13 tools to help you understand your buyersThe ultimate guide to cold calling16 B2B cold email templates that sales experts swear byHow to Build a Sales Process: The Complete GuideBuying a lead list: The pros, the cons, and the things that might land you in jailYou might also like. Lead GenerationBuying a lead list: The pros, the cons, and the things that might land you in jail. Sell to WinEight sales and marketing vanity metrics to avoid at all costs. Sell to WinWhat's the craziest thing you've ever done to make a sale?Most popular. Lead GenerationMarketing webforms: How to build them and where to put them. NutshellNutshell earns first-ever ‘Leader’ placement in G2’s Winter 2022 Grid® Report for Email Marketing. Sell to WinWhat’s the difference between hunter, farmer, and trapper sales personas?Join 30,000+ other sales and marketing professionals. Subscribe to our Sell to Win newsletter!
Topics
  • Topic
  • Tf
  • Position
  • segmentation
  • 83
  • 9
  • market
  • 54
  • 9
  • marketing
  • 53
  • 9
  • company
  • 41
  • 9
  • market segmentation
  • 32
  • 9
  • segment
  • 29
  • 9
  • sale
  • 21
  • 9
  • strategy
  • 19
  • 9
  • email
  • 18
  • 9
  • prospect
  • 18
  • 9
  • product
  • 17
  • 9
  • example
  • 13
  • 9
  • person
  • 12
  • 9
  • demographic
  • 12
  • 9
  • based
  • 12
  • 9
  • effort
  • 11
  • 9
  • industry
  • 10
  • 9
  • process
  • 10
  • 9
  • audience
  • 10
  • 9
  • specific
  • 10
  • 9
  • data
  • 10
  • 9
  • segmentation example
  • 9
  • 9
  • form
  • 9
  • 9
  • time
  • 9
  • 9
  • target
  • 9
  • 9
  • price
  • 9
  • 9
  • common type
  • 8
  • 9
  • type
  • 8
  • 9
  • location
  • 8
  • 9
  • stage
  • 8
  • 9
  • marketing strategy
  • 7
  • 9
  • age
  • 7
  • 9
  • business
  • 7
  • 9
  • content
  • 7
  • 9
  • market segment
  • 6
  • 9
  • firmographic segmentation
  • 5
  • 9
  • price segmentation
  • 5
  • 9
  • marketing effort
  • 4
  • 9
  • common
  • 4
  • 9
  • product service
  • 4
  • 9
  • sale marketing
  • 4
  • 9
  • common type market
  • 3
  • 9
  • type market segmentation
  • 3
  • 9
  • respond similarly marketing
  • 3
  • 9
  • multi segment marketing
  • 3
  • 9
  • company marketing
  • 3
  • 9
  • conversion rate
  • 3
  • 9
  • type market
  • 3
  • 9
  • benefit market
  • 3
  • 9
  • segmentation strategy
  • 3
  • 9
  • segmentation process
  • 3
  • 9
  • respond similarly
  • 3
  • 9
  • similarly marketing
  • 3
  • 9
  • sale process
  • 3
  • 9
  • effort focused
  • 3
  • 9
  • market based
  • 3
  • 9
  • demographic segmentation
  • 3
  • 9
  • company based
  • 3
  • 9
  • targeting company
  • 3
  • 9
  • stage segmentation
  • 3
  • 9
  • life stage
  • 3
  • 9
  • pro con
  • 3
  • 9
  • multi segment
  • 3
  • 9
  • segment marketing
  • 3
  • 9
  • lead list
  • 3
  • 9
  • sale tactic
  • 3
  • 9
  • web form
  • 3
  • 9
  • marketing channel
  • 3
  • 9
  • pipeline stage
  • 3
  • 9
Result 10
TitleNew Criteria for Market Segmentation
Urlhttps://hbr.org/1964/03/new-criteria-for-market-segmentation
DescriptionThe director of marketing in a large company is confronted by some of the most difficult problems in the history of U.S. industry. To assist him, the information revolution of the past decade puts at his disposal a vast array of techniques, facts, and figures. But without a way to master this information, he can […]
Date
Organic Position10
H1New Criteria for Market Segmentation
H2Unique Advantages
Ten Markets
Conclusion
H3Your Cart
Guides to strategy
I. Watches
II. Automobiles
III. Perfume
IV. Bathing Soap
V. Hair-Care Market
VI. Other packaged goods
VII. Retail soft goods
VIII. Adding machines
IX. Computers
X. Light trucks
H2WithAnchorsUnique Advantages
Ten Markets
Conclusion
BodyNew Criteria for Market Segmentation The director of marketing in a large company is confronted by some of the most difficult problems in the history of U.S. industry. To assist him, the information revolution of the past decade puts at his disposal a vast array of techniques, facts, and figures. But without a way to master this information, he can […] by Daniel Yankelovich by Daniel Yankelovich From the Magazine (March 1964) Tweet Post Share Save Get PDF Buy Copies Print Tweet Post Share Save Get PDF Buy Copies Print Leer en español Ler em português The director of marketing in a large company is confronted by some of the most difficult problems in the history of U.S. industry. To assist him, the information revolution of the past decade puts at his disposal a vast array of techniques, facts, and figures. But without a way to master this information, he can easily be overwhelmed by the reports that flow in to him incessantly from marketing research, economic forecasts, cost analyses, and sales breakdowns. He must have more than mere access to mountains of data. He must himself bring to bear a method of analysis that cuts through the detail to focus sharply on new opportunities. In this article, I shall propose such a method. It is called segmentation analysis. It is based on the proposition that once you discover the most useful ways of segmenting a market, you have produced the beginnings of a sound marketing strategy. Unique Advantages . Segmentation analysis has developed out of several key premises: In today’s economy, each brand appears to sell effectively to only certain segments of any market and not to the whole market. Sound marketing objectives depend on knowledge of how segments which produce the most customers for a company’s brands differ in requirements and susceptibilities from the segments which produce the largest number of customers for competitive brands. Traditional demographic methods of market segmentation do not usually provide this knowledge. Analyses of market segments by age, sex, geography, and income level are not likely to provide as much direction for marketing strategy as management requires. Once the marketing director does discover the most pragmatically useful way of segmenting his market, it becomes a new standard for almost all his evaluations. He will use it to appraise competitive strengths and vulnerabilities, to plan his product line, to determine his advertising and selling strategy, and to set precise marketing objectives against which performance can later be measured. Specifically, segmentation analysis helps him to— …direct the appropriate amounts of promotional attention and money to the most potentially profitable segments of his market; …design a product line that truly parallels the demands of the market instead of one that bulks in some areas and ignores or scants other potentially quite profitable segments; …catch the first sign of a major trend in a swiftly changing market and thus give him time to prepare to take advantage of it; …determine the appeals that will be most effective in his company’s advertising; and, where several different appeals are significantly effective, quantify the segments of the market responsive to each; …choose advertising media more wisely and determine the proportion of budget that should be allocated to each medium in the light of anticipated impact; …correct the timing of advertising and promotional efforts so that they are massed in the weeks, months, and seasons when selling resistance is least and responsiveness is likely to be at its maximum; …understand otherwise seemingly meaningless demographic market information and apply it in scores of new and effective ways. These advantages hold in the case of both packaged goods and hard goods, and for commercial and industrial products as well as consumer products. Guides to strategy . Segmentation analysis cuts through the data facing a marketing director when he tries to set targets based on markets as a whole, or when he relies primarily on demographic breakdowns. It is a systematic approach that permits the marketing planner to pick the strategically most important segmentations and then to design brands, products, packages, communications, and marketing strategies around them. It infinitely simplifies the setting of objectives. In the following sections we shall consider nondemographic ways of segmenting markets. These ways dramatize the point that finding marketing opportunities by depending solely on demographic breakdowns is like trying to win a national election by relying only on the information in a census. A modern census contains useful data, but it identifies neither the crucial issues of an election, nor those groups whose voting habits are still fluid, nor the needs, values, and attitudes that influence how those groups will vote. This kind of information, rather than census-type data, is the kind that wins elections—and markets. Consider, for example, companies like Procter & Gamble, General Motors, or American Tobacco, whose multiple brands sell against one another and must, every day, win new elections in the marketplace: These companies sell to the whole market, not by offering one brand that appeals to all people, but by covering the different segments with multiple brands. How can they prevent these brands from cannibalizing each other? How can they avoid surrendering opportunities to competitors by failing to provide brands that appeal to all important segments? In neither automobiles, soaps, nor cigarettes do demographic analyses reveal to the manufacturer what products to make or what products to sell to what segments of the market. Obviously, some modes of segmentation other than demographic are needed to explain why brands which differ so little nevertheless find their own niches in the market, each one appealing to a different segment. The point at issue is not that demographic segmentation should be disregarded, but rather that it should be regarded as only one among many possible ways of analyzing markets. In fact, the key requirement of segmentation analysis is that the marketing director should never assume in advance that any one method of segmentation is the best. His first job should be to muster all probable segmentation and then choose the most meaningful ones to work with. This approach is analogous to that used in research in the physical sciences, where the hypothesis that best seems to explain the phenomena under investigation is the one chosen for working purposes. Ten Markets . In the following discussion we shall take ten markets for consumer and industrial products and see how they are affected by seven different modes of nondemographic segmentation. The products and modes are shown schematically in Exhibit I. Of course, these segments are not the only ones important in business. The seven I have picked are only examples of how segmentation analysis can enlarge the scope and depth of a marketer’s thinking. Exhibit I. Example of Segmentation in Different Industries I. Watches . In this first case we deal with a relatively simple mode of segmentation analysis. The most productive way of analyzing the market for watches turns out to be segmentation by value. This approach discloses three distinct segments, each representing a different value attributed to watches by each of three different groups of consumers: 1. People who want to pay the lowest possible price for any watch that works reasonably well. If the watch fails after six months or a year, they will throw it out and replace it. 2. People who value watches for their long life, good workmanship, good material, and good styling. They are willing to pay for these product qualities. 3. People who look not only for useful product features but also for meaningful emotional qualities. The most important consideration in this segment is that the watch should suitably symbolize an important occasion. Consequently, fine styling, a well-known brand name, the recommendation of the jeweler, and a gold or diamond case are highly valued. In 1962, my research shows, the watch market divided quantitatively as follows: Approximately 23% of the buyers bought for lowest price (value segment #1). Another 46% bought for durability and general product quality (value segment #2). And 31% bought watches as symbols of some important occasion (value segment #3). Defining and quantifying such segments is helpful in marketing planning—especially if a watch company’s product happens to appeal mostly to one segment or if the line straddles the three segments, failing to appeal effectively to any. Without such an understanding, the demographic characteristics of the market are most confusing. It turns out, for example, that the most expensive watches are being bought by people with both the highest and the lowest incomes. On the other hand, some upper income consumers are no longer buying costly watches, but are buying cheap, well-styled watches to throw away when they require servicing. Other upper income consumers, however, continue to buy fine, expensive watches for suitable occasions. Timex’s Timely Tactics. The planning implications in value segmentation are very broad for the industry. For one thing, many of the better watch companies in the years between 1957 and 1962 were inadvertently focusing exclusively on the third segment described—the 31% of the market that bought a watch only as a gift on important occasions—thus leaving the bulk of the market open to attack and exploitation. The U.S. Time Company took advantage of this opening and established a very strong position among the more than two-thirds of America’s watch buyers in the first two segments. Its new low-price watch, the Timex, had obvious appeal for the first segment, and it catered to the second segment as well. At that time, higher-price watches were making the disastrous mistake in their advertising of equating product quality with water-proof and shock-resistant features. The Timex also offered these low-cost features, at lower prices, thus striking at a vulnerable area which the competition itself created. When Timex pressed its attack, it was able within a few years to claim that “Timex sells more watches than any other watch company in the world.” Even the timing of Timex’s watch advertising was involved. Much of the third segment was buying watches only during the Christmas season, and so most of Timex’s competitors concentrated their advertising in November and December. But since buying by the other two segments went on all the time, Timex advertised all year-round, getting exclusive attention ten months of the year. Thus, nondemographic segmentation in the watch industry has directly affected almost every phase of marketing, including the composition of the product line. Major watch companies know that they must plan product line, pricing, advertising, and distribution within the framework of the three basic value segments of this market. II. Automobiles . The nondemographic segmentation of the automobile market is more complex than that of the watch market. The segments crisscross, forming intricate patterns. Their dynamics must be seen clearly before automobile sales can be understood. Segmentation analysis leads to at least three different ways of classifying the automobile market along nondemographic lines, all of which are important to marketing planning. Value Segmentation. The first mode of segmentation can be compared to that in the watch market—a threefold division along lines which represent how different people look at the meaning of value in an automobile: 1. People who buy cars primarily for economy. Many of these become owners of the Falcon, Ford, Rambler American, and Chevrolet. They are less loyal to any make than the other segments, but go where the biggest savings are to be found. 2. People who want to buy the best product they can find for their money. These prospects emphasize values such as body quality, reliability, durability, economy of operation, and ease of upkeep. Rambler and Volkswagen have been successful because so many people in this segment were dissatisfied. 3. People interested in “personal enhancement” (a more accurate description than “prestige”). A handsomely styled Pontiac or Thunderbird does a great deal for the owner’s ego, even though the car may not serve as a status symbol. Although the value of an automobile as a status symbol has declined, the personal satisfaction in owning a fine car has not lessened for this segment of the market. It is interesting that while both watches and cars have declined in status value, they have retained self-enhancement value for large portions of the market. Markets can change so swiftly, and the size of key segments can shift so rapidly, that great sensitivity is required to catch a trend in time to capitalize on it. In the automobile market, the biggest change in recent years has been the growth in segment two—the number of people oriented to strict product value. Only a few years ago, the bulk of the market was made up of the other segments, but now the product-value segment is probably the largest. Some automobile companies did not respond to this shift in the size of these market segments in time to maintain their share of the market. Aesthetic Concepts. A second way of segmenting the automobile market is by differences in style preferences. For example, most automobile buyers tell you that they like “expensive looking” cars. To some people, however, “expensive looking” means a great deal of chrome and ornamentation, while to others it means the very opposite—clean, conservative lines, lacking much chrome or ornamentation. Unfortunately, the same words are used by consumers to describe diametrically opposed style concepts. Data that quantify buyers according to their aesthetic responses—their differing conceptions of what constitutes a good-looking car—are among the most useful an automobile company can possess. The importance of aesthetic segmentation can be pointed up by this example: When Ford changed from its 1959 styling to its 1960 styling, the change did not seem to be a radical one from the viewpoint of formal design. But, because it ran contrary to the special style expectations of a large group of loyal Ford buyers, it constituted a dramatic and unwelcome change to them. This essential segment was not prepared for the change, and the results were apparent in sales. Susceptibility to Change. A third and indispensable method of segmenting the automobile market cuts across the lines drawn by the other two modes of segmentation analysis. This involves measuring the relative susceptibility of potential car buyers to changing their choice of make. Consider the buyers of Chevrolet during any one year from the point of view of a competitor: At one extreme are people whose brand loyalty is so solidly entrenched that no competitor can get home to them. They always buy Chevrolets. They are closed off to change. At the other extreme are the open-minded and the unprejudiced buyers. They happened to buy a Chevrolet because they preferred its styling that year, or because they got a good buy, or because someone talked up the Fisher body to them. They could just as easily have purchased another make. In the middle of this susceptibility continuum are people who are predisposed to Chevrolet to a greater or lesser degree. They can be persuaded to buy another make, but the persuasion has to be strong enough to break through the Chevrolet predisposition. The implications of this kind of a susceptibility segmentation are far-reaching. Advertising effectiveness, for example, must be measured against each susceptibility segment, not against the market as a whole. Competitors’ advertising should appear in media most likely to break through the Chevrolet predisposition of the middle group. In addition, the wants of those who are not susceptible must be factored out, or they will muddy the picture. Marketing programs persuasive enough to influence the uncommitted may make no difference at all to the single largest group—those who are predisposed to Chevrolet but still open enough to respond to the right stimulus. If the marketing director of an automobile company does not break down his potential market into segments representing key differences in susceptibility, or does not clearly understand the requirements of each key segment, his company can persevere for years with little or no results because its promotion programs are inadvertently being aimed at the wrong people. III. Perfume . A segmentation analysis of the perfume market shows that a useful way to analyze it is by the different purposes women have in mind when they buy perfume. One segment of the market thinks of a perfume as something to be added to what nature has supplied. Another segment believes that the purpose of fragrance products is to help a woman feel cleaner, fresher, and better groomed—to correct or negate what nature has supplied. In the latter instance, the fragrance product is used to cancel out natural body odors; in the former, to add a new scent. To illustrate this difference in point of view: One woman told an interviewer, “I like a woodsy scent like Fabergé. It seems more intense and lingers longer, and doesn’t fade away like the sweeter scents.” But another woman said, “I literally loathe Fabergé. It makes me think of a streetcar full of women coming home from work who haven’t bathed.” These differences in reaction do not indicate objective differences in the scent of Fabergé. They are subjective differences in women’s attitudes; they grow out of each woman’s purpose in using a perfume. Purposive segmentation, as this third mode of analysis might be called, has been of great value to alert marketers. For instance: A company making a famous line of fragrance products realized that it was selling almost exclusively to a single segment, although it had believed it was competing in the whole market. Management had been misled by its marketing research, which had consistently shown no differences in the demographic characteristics of women buying the company’s products and women buying competitors’ products. In the light of this insight, the company decided to allocate certain lines to the underdeveloped segments of the market. This required appropriate changes in the scent of the product and in its package design. A special advertising strategy was also developed, involving a different copy approach for each product line aimed at each segment. In addition, it was learned that visualizations of the product in use helped to create viewer identification in the segment that used perfume for adding to nature’s handiwork, but that more subtle methods of communication produced better results among the more reserved, more modest women in the second segment who want the “canceling out” benefits of perfume. The media susceptibilities of women in the two segments were also found to be different. Thus, from a single act of resegmentation, the advertising department extracted data critical to its copy platform, communication strategy, and media decisions. IV. Bathing Soap . A comparable purposive segmentation was found in the closely related bathing soap field. The key split was between women whose chief requirement of soap was that it should clean them adequately and those for whom bathing was a sensuous and enjoyable experience. The company (a new contender in this highly competitive field) focused its sights on the first segment, which had been much neglected in recent years. A new soap was shaped, designed, and packaged to appeal to this segment, a new advertising approach was evolved, and results were very successful. V. Hair-Care Market . The Breck-Halo competition in the shampoo market affords an excellent example of another kind of segmentation. For many years, Breck’s recognition of the market’s individualized segmentation gave the company a very strong position. Its line of individualized shampoos included one for dry hair, another for oily hair, and one for normal hair. This line accurately paralleled the marketing reality that women think of their hair as being dry, oily, or normal, and they do not believe that any one shampoo (such as an all-purpose Halo) can meet their individual requirements. Colgate has finally been obliged, in the past several years, to revise its long-held marketing approach to Halo, and to come out with products for dry hair and for oily hair, as well as for normal hair. Other companies in the hair-care industry are beginning to recognize other segmentations in this field. For example, some women think of their hair as fine, others as coarse. Each newly discovered key segmentation contains the seeds of a new product, a new marketing approach, and a new opportunity. VI. Other packaged goods . Examples of segmentation analysis in other packaged goods can be selected almost at random. Let us mention a few briefly, to show the breadth of applicability of this method of marketing analysis: In convenience foods, for example, we find that the most pragmatic classification is, once again, purposive segmentation. Analysis indicates that “convenience” in foods has many different meanings for women, supporting several different market segments. Women for whom convenience means “easy to use” are reached by products and appeals different from those used to reach women for whom convenience means shortcuts to creativity in cooking. In the market for cleaning agents, some women clean preventively, while others clean therapeutically, i.e., only after a mess has been made. The appeals, the product characteristics, and the marketing approach must take into account these different reasons for buying—another example of purposive segmentation. In still another market, some people use air fresheners to remove disagreeable odors and others to add an odor. A product like Glade, which is keyed to the second segment, differs from one like Airwick in product concept, packaging, and type of scent. The beer market requires segmentation along at least four different axes—reasons for drinking beer (purposive); taste preferences (aesthetic); price/quality (value); and consumption level. VII. Retail soft goods . Although soft-goods manufacturers and retailers are aware that their customers are value conscious, not all of them realize that their markets break down into at least four different segments corresponding to four different conceptions of value held by women. For some women value means a willingness to pay a little more for quality. For others, value means merchandise on sale. Still other women look for value in terms of the lowest possible price, while others buy seconds or discounted merchandise as representing the best value. Retailing operations like Sears, Roebuck are highly successful because they project all these value concepts, and do so in proportions which closely parallel their distribution in the total population. VIII. Adding machines . In marketing planning for a major adding machine manufacturer, analysis showed that his product line had little relationship to the segmented needs of the market. Like most manufacturers of this kind of product, he had designed his line by adding features to one or several stripped-down basic models—each addition raising the model price. The lowest priced model could only add; it could not subtract, multiply, divide, or print, and it was operated by hand. Since there are a great many features in adding machines, the manufacturer had an extremely long product line. When the needs of the market were analyzed, however, it became clear that, despite its length, the line barely met the needs of two out of the three major segments of the market. It had been conceived and planned from a logical point of view rather than from a market-need point of view. The adding machine market is segmented along lines reflecting sharp differences in value and purpose: One buyer group values accuracy, reliability, and long life above all else. It tends to buy medium-price, full-keyboard, electric machines. There are many banks and other institutions in this group where full-keyboard operations are believed to ensure accuracy. Manufacturing establishments, on the other hand, prefer the ten-key machine. Value, to these people, means the maximum number of labor-saving and timesaving features. They are willing to pay the highest prices for such models. Both these segments contrast sharply with the third group, the small retailer whose major purpose is to find a model at a low purchase price. The small retailer does not think in terms of amortizing his investment over a period of years, and neither labor-saving features nor full-keyboard reliability count for as much as an immediate savings in dollars. Despite the many models in the company’s line, it lacked those demanded by both the manufacturer and small retailer segments of the market. But, because it had always been most sensitive to the needs of financial institutions, it had developed more models for this segment than happened to be needed. Product, sales, and distribution changes were required to enable the company to compete in the whole market. IX. Computers . One pragmatic way of segmenting the computer market is to divide potential customers between those who believe they know how to evaluate a computer and those who believe they do not. A few years ago only about 20% of the market was really open to IBM’s competitors—the 20% who believed it knew how to evaluate a computer. By default, this left 80% of the market a virtual captive of IBM—the majority who did not have confidence in its own ability to evaluate computers and who leaned on IBM’s reputation as a substitute for personal appraisal. Another segmentation in this market involves differences in prospects’ attitudes toward the inevitability of progress. Although this factor has been widely ignored, it is a significant method for qualifying prospects. People who believe that progress is inevitable (i.e., that change is good and that new business methods are constantly evolving) make far better prospects for computers than those who have a less optimistic attitude toward progress in the world of business. X. Light trucks . The market for light trucks affords us another example of segmentation in products bought by industry. As in the computer example, there are both buyers who lack confidence in their ability to choose among competing makes and purchasers who feel they are sophisticated about trucks and can choose knowledgeably. This mode of segmentation unexpectedly turns out to be a key to explaining some important dynamics of the light truck market. Those who do not trust their own judgment in trucks tend to rely very heavily on both the dealer’s and the manufacturer’s reputation. Once they find a make that gives them reliability and trouble-free operation, they cease to shop other makes and are no longer susceptible to competitive promotion. Nor are they as price-sensitive as the buyer who thinks he is sophisticated about trucks. This buyer tends to look for the best price, to shop extensively, and to be susceptible to the right kind of competitive appeals, because he puts performance before reputation. These ways of looking at the truck market have far-reaching implications for pricing policy, for product features, and for dealers’ sales efforts. Conclusion . To sum up the implications of the preceding analysis, let me stress three points: 1. We should discard the old, unquestioned assumption that demography is always the best way of looking at markets. The demographic premise implies that differences in reasons for buying, in brand choice influences, in frequency of use, or in susceptibility will be reflected in differences in age, sex, income, and geographical location. But this is usually not true. Markets should be scrutinized for important differences in buyer attitudes, motivations, values, usage patterns, aesthetic preferences, or degree of susceptibility. These may have no demographic correlatives. Above all, we must never assume in advance that we know the best way of looking at a market. This is the cardinal rule of segmentation analysis. All ways of segmenting markets must be considered, and then we must select out of the various methods available the ones that have the most important implications for action. This process of choosing the strategically most useful mode of segmentation is the essence of the marketing approach espoused in this article. In considering cases like those described, we must understand that we are not dealing with different types of people, but with differences in peoples’ values. A woman who buys a refrigerator because it is the cheapest available may want to buy the most expensive towels. A man who pays extra for his beer may own a cheap watch. A Ford-owning Kellogg’s Corn Flakes-eater may be closed off to Chevrolet but susceptible to Post Toasties; he is the same man, but he has had different experiences and holds different values toward each product he purchases. By segmenting markets on the basis of the values, purposes, needs, and attitudes relevant to the product being studied, as in Exhibit I, we avoid misleading information derived from attempts to divide people into types. 2. The strategic-choice concept of segmentation broadens the scope of marketing planning to include the positioning of new products as well as of established products. It also has implications for brand planning, not just for individual products but for the composition of a line of competing brands where any meaningful segment in the market can possibly support a brand. One explanation of the successful competing brand strategy of companies like Procter & Gamble is that they are based on sensitivity to the many different modes of market segmentation. The brands offered by P & G often appear very similar to the outsider, but small, marginal differences between them appeal to different market segments. It is this rather than intramural competition that supports P & G successes. 3. Marketing must develop its own interpretive theory, and not borrow a ready-made one from the social sciences. Marketing research, as an applied science, is tempted to borrow its theoretical structures from the disciplines from which it derives. The social sciences offer an abundance of such structures, but they are not applicable to marketing in their pure academic form. While the temptation to apply them in that form is great, it should be resisted. From sociology, for example, marketing has frequently borrowed the concept of status. This is a far-reaching concept, but it is not necessarily the most important one in a marketing problem, nor even one of the important ones. Again, early psychoanalytic theory has contributed an understanding of the sexual factor. While this can sometimes be helpful in an analysis of buying behavior in a given situation, some motivation researchers have become oversensitive to the role of sex and, as a result, have made many mistakes. Much the same might be said of the concept of social character, that is, seeing the world as being “inner-directed,” “other-directed,” “tradition-directed,” “autonomous,” and so forth. One of the values of segmentation analysis is that, while it has drawn on the insights of social scientists, it has developed an interpretive theory within marketing. It has been homegrown in business. This may explain its ability to impose patterns of meaning on the immense diversity of the market, and to provide the modern marketing director with a systematic method for evolving true marketing objectives. A version of this article appeared in the March 1964 issue of Harvard Business Review. Read more on Marketing or related topic Market segmentation DY Daniel Yankelovich is chairman of Viewpoint Learning, a firm that promotes problem solving through dialogue, and DYG, a market research firm that tracks social trends. He is based in San Diego. Tweet Post Share Save Get PDF Buy Copies Print Read more on Marketing or related topic Market segmentation Partner Center. Diversity Latest Magazine Ascend Topics Podcasts Video Store The Big Idea Data & Visuals Case Selections
Topics
  • Topic
  • Tf
  • Position
  • market
  • 85
  • 10
  • segment
  • 67
  • 10
  • segmentation
  • 48
  • 10
  • product
  • 47
  • 10
  • marketing
  • 38
  • 10
  • watch
  • 32
  • 10
  • company
  • 29
  • 10
  • person
  • 26
  • 10
  • woman
  • 25
  • 10
  • line
  • 22
  • 10
  • brand
  • 21
  • 10
  • analysi
  • 20
  • 10
  • automobile
  • 16
  • 10
  • example
  • 16
  • 10
  • buy
  • 15
  • 10
  • year
  • 15
  • 10
  • difference
  • 15
  • 10
  • segmentation analysi
  • 14
  • 10
  • advertising
  • 14
  • 10
  • good
  • 13
  • 10
  • important
  • 13
  • 10
  • buyer
  • 13
  • 10
  • segment market
  • 12
  • 10
  • appeal
  • 12
  • 10
  • price
  • 12
  • 10
  • hair
  • 11
  • 10
  • method
  • 11
  • 10
  • demographic
  • 11
  • 10
  • buying
  • 10
  • 10
  • susceptibility
  • 10
  • 10
  • mode
  • 10
  • 10
  • chevrolet
  • 9
  • 10
  • product line
  • 7
  • 10
  • watch company
  • 6
  • 10
  • market segment
  • 6
  • 10
  • mode segmentation
  • 6
  • 10
  • marketing planning
  • 5
  • 10
  • point view
  • 5
  • 10
  • market segmentation
  • 5
  • 10
  • segmenting market
  • 5
  • 10
  • marketing director
  • 5
  • 10
  • automobile market
  • 5
  • 10
  • product quality
  • 4
  • 10
  • important occasion
  • 4
  • 10
  • watch market
  • 4
  • 10
  • competitor
  • 4
  • 10
  • automobile company
  • 4
  • 10
  • car
  • 4
  • 10
  • light truck
  • 4
  • 10
  • truck market
  • 4
  • 10
  • directed
  • 4
  • 10
  • example segmentation
  • 4
  • 10
  • purposive segmentation
  • 4
  • 10
  • marketing approach
  • 4
  • 10
  • adding machine
  • 4
  • 10
  • tweet post share
  • 3
  • 10
  • post share save
  • 3
  • 10
  • share save pdf
  • 3
  • 10
  • save pdf buy
  • 3
  • 10
  • pdf buy copy
  • 3
  • 10
  • buy copy print
  • 3
  • 10
  • way segmenting market
  • 3
  • 10
  • daniel yankelovich
  • 3
  • 10
  • tweet post
  • 3
  • 10
  • post share
  • 3
  • 10
  • share save
  • 3
  • 10
  • save pdf
  • 3
  • 10
  • pdf buy
  • 3
  • 10
  • buy copy
  • 3
  • 10
  • copy print
  • 3
  • 10
  • marketing research
  • 3
  • 10
  • way segmenting
  • 3
  • 10
  • marketing strategy
  • 3
  • 10
  • marketing objectif
  • 3
  • 10
  • packaged good
  • 3
  • 10
  • nondemographic segmentation
  • 3
  • 10
  • lowest price
  • 3
  • 10
  • price watch
  • 3
  • 10
  • appeal segment
  • 3
  • 10
  • timex
  • 3
  • 10
  • segment time
  • 3
  • 10
  • reaching
  • 3
  • 10
  • fragrance product
  • 3
  • 10
  • full keyboard
  • 3
  • 10
  • small retailer
  • 3
  • 10
  • evaluate computer
  • 3
  • 10
  • ibm
  • 3
  • 10
Result 11
Title5 Types of Market Segmentation & How To Use Them in 2021
Urlhttps://blog.remesh.ai/5-types-of-market-segmentation-how-to-use-them
DescriptionThere's more to market segmentation than demographics. Psychographic, geographic, firmographic, & behavioral segmentation are all ways to group customers
DateApr 16, 2021
Organic Position11
H1Breaking Down Market Segmentation
H25 Types of Market Segmentation & How To Use Them in 2021
5 Types of Market Segmentation & How To Use Them in 2021
Market Segmentation Definition
The Importance of the Market Segmentation Process
How to Conduct Segmentation Research
What Are the Five Types of Market Segmentation?
Common Segmentation Mistakes to Avoid
Types of Marketing Segmentation Strategies
Summing Up Market Segmentation
Newsletter
H3Emily Smith
Emily Smith
Market Research
Unlocking new competitive advantages
Improving the product development process
Optimizing campaign performance
Read: The State of AI on Market Research (Report)
1. Set an objective
2. Identify customer segments
3. Evaluate the target segment
4. Develop market segmentation strategy
5. Identify launch plan
Watch: How to Use Behavioral & Narrative Economics (Webinar)
Behavioral Segmentation: A Customer’s Choices
Psychographic Segmentation: A Customer’s Lifestyle
Read: The Impact of COVID-19 on Digital Ads (Report)
Read: Online Focus Groups vs Traditional Focus Groups
Demographic Segmentation: A Customer’s Profile
Geographic Segmentation: A Customer’s Home
Read: How to Write Discussion Guides (eBook)
Firmographic Segmentation: The Customer’s Company
Read: The Ultimate Guide to Conducting Online Qualitative Research
Targeting and Positioning
Newsletter
Related Blog Posts
Remesh Named #168 in 2021’s Deloitte Fast 500 List
100 Open-Ended Survey Questions for Effective Consumer Research in 2021
Research & Equitable Leadership Award Winners Announced (2021)
Newsletter
H2WithAnchors5 Types of Market Segmentation & How To Use Them in 2021
5 Types of Market Segmentation & How To Use Them in 2021
Market Segmentation Definition
The Importance of the Market Segmentation Process
How to Conduct Segmentation Research
What Are the Five Types of Market Segmentation?
Common Segmentation Mistakes to Avoid
Types of Marketing Segmentation Strategies
Summing Up Market Segmentation
Newsletter
BodyBreaking Down Market Segmentation Companies need stronger, faster, and cheaper insights. But how can an insight or marketing team divide their customer base up more precisely to accomplish this task? Cue, market segmentation research. Segmented personas will present your insights team with the strongest data. Behavior-based segmentation, especially, is increasingly popular among researchers. Let's dive into these 5 types of market segmentation strategies your team can use to unlock employee and consumer insights. In this market segmentation guide, you'll learn: 1. What is Market Segmentation? 2. How to Conduct Segmentation Research 3. 5 Types of Market Segmentation & Segmentation Examples Behavioral Segmentation Psychographic Segmentation Demographic Segmentation Geographic Segmentation Firmographic Segmentation 4. Common Mistakes to Avoid 5. Types of Market Segmentation Strategies 7. The State of AI in Market Research (eBook) Market Segmentation Definition. Market segmentation is a marketing technique that involves segmenting a target market into smaller, more defined segments, enabling a business to conduct strong market research into customers. By participating in market segmentation, researchers can reveal consumer experience insights, product development innovation approaches, suggestions for boosting customer loyalty, and more.  The Importance of the Market Segmentation Process. We know that market segmentation allows us to gain an in-depth understanding of our customer base, but what can we do with these insights? Market segmentation offers a wide range of actionable recommendations with projected business outcomes. These outcomes include: Unlocking new competitive advantages . Market segmentation can allow us to unlock competitive advantages by introducing new markets for organizations to explore. Using the insights gained from this method, we can identify untapped and growing markets but have low competition. High-growth and low competition markets allow the organization to expand its customer base and eventually drive product discovery. Improving the product development process. Through the use of market segmentation, organizations can power their product development process. Uncovering new segments and discovering their needs allows product teams to create products that satisfy that particular group’s pain points. In turn, specialized products or services may have little competition – and if niche enough, they may have no competition at all. Creating product guides and recommendations is one of the ways here that will allow dealing with competition issues niche will have. Optimizing campaign performance. Insights gained from market segmentation efforts can help marketing teams market actively by creating tailored messaging that strengthens campaign communications. Most importantly, market segmentation insights allow teams to make more calculated decisions, reducing media spend and improving the campaign’s cost-effectiveness.  How to Conduct Segmentation Research. You can split market segmentation into four distinct stages within a more prominent market research method separate from the segmentation divides themselves. Read: The State of AI on Market Research (Report). 1. Set an objective. What is the purpose of this market segmentation process? Identify customer segmentation models and variables (and those that apply to your specific market), then develop a hypothesis based on those findings. 2. Identify customer segments. Establish a research design, collect data, analyze the results, and develop your segments. This step will validate or disprove your hypothesis in part. 3. Evaluate the target segment. There are several potential customers you can choose from, so you must choose your most viable option and move your product forward from there.  Think of this step as a service to your future customer base. Identify the most specific use case, and your company will be able to offer a more personalized product or service. Think of your company as a resource, not a selling point. You can perform this step in market segmentation in a variety of manners. An online focus group is a fast and efficient way to discover new segments. You can use platforms like Remesh to dig into pre-existing customer segments. 4. Develop market segmentation strategy. Select your target segment and identify the implications of this segment or persona. Make moves based on a target segment, project goals, market viability, and product status. Use powerpoint templates to capture and present your marketing segmentation strategy effectively.  5. Identify launch plan. Identify key stakeholders, ideate and communicate the launch plan internally, then execute the project using your target segments. What Are the Five Types of Market Segmentation? The five types of market segmentation include: Behavioral Segmentation Psychographic Segmentation Demographic Segmentation Geographic Segmentation Firmographic Segmentation Watch: How to Use Behavioral & Narrative Economics (Webinar).  . Behavioral Segmentation: A Customer’s Choices. Behavioral segmentation digs deeper into customers' purchasing habits than demographic segmentation. It’s also one of the most popular customer profile types to be integrated into marketing campaigns. Behavioral segmentation comprises behavior patterns, like customer loyalty or engagement level, specific to customer interactions with a brand or company. Behavioral Segmentation Examples. Benefit(s) sought from product or service Readiness to buy or purchase Usage-based segmentation Common characteristics You can use behavioral segmentation to gain insights into customer experience, allowing for improvements in customer success. Some questions to consider: How engaged are shoppers throughout the customer journey?  What specific trends in timing or occasion do your customers tend to prefer your products?  How much time are your customers spending in the buyer’s process?  How does your business define a "good customer?" Behavioral segmentation is also used for marketers to determine future customer leads and prospects in the market who are more likely to purchase your product. Similar to psychographics, behavioral segments are primarily collected based on a consumer’s digital footprint. New improvements in technology compile metadata from customers to better understand their preferences. Unused data can be sent to customer support or used for marketing messages. Psychographic Segmentation: A Customer’s Lifestyle . Psychographics is a type of customer segmentation that focuses on inner or qualitative traits. Psychographic attributes are the ones that aren’t obvious just by looking at your customer, like demographic segmentation. Instead, psychographics requires deeper analysis. Psychographic Segmentation Examples. Habits Hobbies, activities, or interests Values or opinions Personality or attitude Lifestyle Social status By defining a customer persona this way, you’ll be more equipped to tailor your marketing strategies. And, you’ll appeal to customer tastes.  Defining Brand Personality Traits Through Psychographic Segmentation. You can use psychographic segmentation to develop a “brand personality” or brand personification. In other words, the personality traits that your brand exemplifies. For example, let’s say your insights team discovers your customer base purchases a new type of running shoe every year. Your market research team also knows that people interested in new running shoes value high energy and independence.  Read: The Impact of COVID-19 on Digital Ads (Report). Then, you can use that finding as a feature in your brand style, which could help sell other products related to fitness under those same traits. For example, your commercials might be fast-paced and emphasize the strength of the individual.  There are a few ways to collect demographics, including: 1. Interviewing existing clients. Depending on your relationship with a customer, you can more or less ask them directly about their consumer habits. Some quantitative feedback questions may include: How likely are you to purchase Company X’s sneaker again?  If you like Sneaker X, would you try Hoodie Y from the same company?  If you’re running out of ideas, you might start looking into some unusual places to collect customer feedback. Or, you might begin by investigating potential groups of customers you're not currently interviewing or more broadly into consumer trends. When you ask qualitative questions, you can discover meaningful insights about your customers. These questions may include: What do you enjoy about running?  Can you walk me through your running routine? These questions lead to further insights into a customer’s lifestyle. These questions, especially when asked to larger groups of people, are typically requested by creating a survey. However, online focus groups are becoming increasingly popular customer feedback tools, as well. Read: Online Focus Groups vs Traditional Focus Groups. 2. Observing customer data . This type of psychographic probe is more low-key and becoming increasingly efficient with A.I. advancement. For companies studying consumers, A.I. systems have allowed for a deeper understanding of consumer insights.  Some questions to consider: Where are your consumers on the internet?  How can you use their Instagram or Pinterest clicks to better market your products?  What niche marketing strategies can you tap into? Analyzing your customer’s social media and digital habits will enable you to optimize your product marketing efforts – and probably contribute to your market segmentation strategy, as well. An increasingly popular example of this play method is coming with the rise of voice technology.   Voice search is an essential asset in psychographic segmentation. Customers use devices like Google Home or Amazon’s Alexa to discuss personal preferences, interests, and other potentially sensitive data. Now, consumer data is available for companies to sculpt customer profiles.  With this access to detailed customer information comes some concerns over data privacy and ethical corporate use. Some risks can include: Data exploitation Identity tracking Voice and facial recognition Without consent and transparency, this data could easily make consumers less inclined to share their information with brands, which in turn, makes it harder to generate brand loyalty. If used responsibly, these technologies can create a fully tailored consumer marketplace, speed up efficiency, and increase time to market.  Demographic Segmentation: A Customer’s Profile. Demographics are the breakdown of your customer personas in the market for cursory traits like age or gender. These traits offer basic information on your customers and are often considered one of the more broad segmentation types. Examples of demographic segmentation include age, income, family size, education, or gender. Dive into these segments to cut down on time and resources to understand your target audience. Or tap into potential consumers that you have yet to reach. Demographics are generally less invasive to collect than other segmentation types. Demographic Segmentation Examples. Occupation Marital status Political party status  Race Religion Living status (if your subject is a homeowner or renter) Geographic Segmentation: A Customer’s Home. Geographics are the study of your customer based on their physical location, which can affect more physical interactions in the market. Consumers grouped in similar areas may share similar preferences. That’s why this type of market segmentation is excellent to pair alongside more abstract types, like behavioral. Geographic Segmentation Examples. City State Country Population density Economic status Zip Code Regional climate  However, geographic segmentation can also include geographic regions that aren’t technically defined, such as neighborhoods.  For example, consider a company that is advertising a lawn care service that utilizes a subscription model. The company would likely be more successful in targeting a suburban area where residents need extra yard care. The campaign would be less successful in an urban area, where consumers might be more interested in a food delivery service. Read: How to Write Discussion Guides (eBook). Studying customer geography can also help target search results in your prospect’s region. Firmographic Segmentation: The Customer’s Company. You can use firmographics to describe the attributes of firms or businesses. Firmographics are to firms and investors as demographics are to people. Companies can use this type of segmentation to determine whether or not a smaller firm is apt for an investment. With millions of firms worldwide, businesses can use firmographics to identify prospects based on size, scale, and funding. You can also breakdown firms into sections of: Non-profits Businesses Governmental entities Agencies Small-retail shops Independent contractors Investing in a smaller firm or company always comes with a risk. Therefore, investors have to be precise in segmenting venture opportunities to minimize that risk.  Segmentation variables for firms typically include things related to a smaller company’s potential. For example, before investing in a new application, venture capital firms look for company strengths. These can include things like the vision of the executive team or the product’s target market. Firmographic Segmentation Examples. Performance and annual revenue Average sales cycle Size and employee population Ownership (public, private, government, etc.) Organizational trends  . Read: The Ultimate Guide to Conducting Online Qualitative Research. Common Segmentation Mistakes to Avoid. Once you’ve created segments, keep an eye out for common mistakes that marketers and researchers make.  Making your segments too small or specializedSegments that are too small will be more challenging to organize or inaccurate, and they can distract from your objective. Like sample size, an over-segmented group can yield data that is not statistically or directionally significant. Not allowing your segments to changeStay focused on ROI. If your strategy isn’t working efficiently for your business, it may be time to switch things around.  Ignoring new potential personas   Customer profiles change. Try not to get too attached to your segments, as they will evolve with the market. Types of Marketing Segmentation Strategies . Targeting and Positioning. Targeting and positioning are the next steps in the roadmap following market segmentation. To evaluate the potential commercial value of a segment, use these strategies to assess the following criteria: Market Size. The market share for that segment must be large enough to justify spend.  Segment Differences. What’s different about each segment, and what is the value of those differences? Is one segment distinct from the others? Profit vs. Spend. The segment must provide returns on investment from the initial budget allocated for a campaign or project.  Accessibility of Segment: Is the segment available to your team? If not, how can your brand overcome the barriers to that segment? After settling on a target segment, move on to product positioning, which presents the benefits of your product to the chosen target segment. A simple way to evaluate your best positioning opportunities is to map them out.  Follow these steps to create a simple product positioning map: Define “hot buttons” or customer feedback trends about your product through surveys or focus groups Ask your customers to rate competitor products based on that given feedback criteria Place your product and competitor products on a scatter plot and evaluate the gaps Summing Up Market Segmentation . Whether it’s conducting an interview or writing a survey, the next phase of your research can sometimes be unclear. When collecting massive amounts of market segmentation data, keep the more extraordinary brand or marketing in mind. Rather than relying on one or two sole strategies to characterize your customer segments, combine the efforts of multiple strategies. For researchers, this allows for a complete perspective on target customers. Marketing segmentation allows companies to define and optimize future products and advertise their product to consumers in the future. Don't leave your market segmentation up to a manual process. Optimize your customer insights with AI, using our free guide below. SHARE. Newsletter. Related Blog Posts . Remesh Named #168 in 2021’s Deloitte Fast 500 List. By Team Remesh Deloitte today revealed that Remesh ranked No. 168 on its annual Fast 500 list, one of the most respected rankings of ... 100 Open-Ended Survey Questions for Effective Consumer Research in 2021. By Kevan Chew Because we live in a globalized economy, market trends and customer preferences constantly morph and change over time. ... Research & Equitable Leadership Award Winners Announced (2021). By Team Remesh In its second annual year, we're proud to announce the 2021 Research & Equitable Leadership (REEL) award, honoring ... logo-remesh Created with Sketch. Remesh enables you to discover Truth by engaging and understanding a live-audience in real-time. 6815 Euclid Ave. Cleveland, OH 44103 Twitter Facebook Telephone LinkedIn instagram Home Marketing and Branding Product Employee Experience About Product Innovation Blog Customer Experience Careers Politics Login Login - Legacy Support Support - Legacy Request a Demo Terms of Service Privacy Newsletter. © 2022  |  All rights reserved Newsletter. Sign up to get Remesh updates and sweet content!
Topics
  • Topic
  • Tf
  • Position
  • segmentation
  • 78
  • 11
  • customer
  • 63
  • 11
  • market
  • 52
  • 11
  • market segmentation
  • 31
  • 11
  • segment
  • 30
  • 11
  • product
  • 30
  • 11
  • company
  • 21
  • 11
  • type
  • 19
  • 11
  • consumer
  • 18
  • 11
  • research
  • 16
  • 11
  • insight
  • 15
  • 11
  • strategy
  • 13
  • 11
  • marketing
  • 13
  • 11
  • group
  • 12
  • 11
  • target
  • 12
  • 11
  • team
  • 12
  • 11
  • example
  • 12
  • 11
  • psychographic
  • 12
  • 11
  • segmentation customer
  • 11
  • 11
  • data
  • 11
  • 11
  • behavioral
  • 11
  • 11
  • demographic
  • 11
  • 11
  • identify
  • 10
  • 11
  • brand
  • 10
  • 11
  • type market
  • 9
  • 11
  • include
  • 9
  • 11
  • behavioral segmentation
  • 8
  • 11
  • based
  • 8
  • 11
  • remesh
  • 8
  • 11
  • question
  • 8
  • 11
  • firm
  • 8
  • 11
  • sneaker
  • 7
  • 11
  • focu group
  • 7
  • 11
  • segmentation strategy
  • 7
  • 11
  • psychographic segmentation
  • 7
  • 11
  • demographic segmentation
  • 7
  • 11
  • firmographic
  • 7
  • 11
  • business
  • 7
  • 11
  • service
  • 7
  • 11
  • type market segmentation
  • 6
  • 11
  • segmentation example
  • 6
  • 11
  • target segment
  • 6
  • 11
  • firmographic segmentation
  • 5
  • 11
  • customer base
  • 5
  • 11
  • geographic segmentation
  • 5
  • 11
  • market research
  • 5
  • 11
  • market segmentation strategy
  • 4
  • 11
  • segmentation research
  • 4
  • 11
  • customer segment
  • 4
  • 11
  • customer profile
  • 4
  • 11
  • insight customer
  • 4
  • 11
  • segmentation psychographic
  • 4
  • 11
  • segmentation psychographic segmentation
  • 3
  • 11
  • online focu group
  • 3
  • 11
  • insight team
  • 3
  • 11
  • increasingly popular
  • 3
  • 11
  • product development
  • 3
  • 11
  • product service
  • 3
  • 11
  • online focu
  • 3
  • 11
  • marketing segmentation
  • 3
  • 11
  • segmentation type
  • 3
  • 11
  • segmentation include
  • 3
  • 11
  • customer feedback
  • 3
  • 11
Result 12
TitleThe Essential Guide to Market Segmentation
Urlhttps://info.hurree.co/market-segmentation-pillar
DescriptionResearch shows that 85% of new product launches fail due to poor market segmentation. So here's the only essential guide to market segmentation you need!.
Date
Organic Position12
H1
H2The Essential Guide to Market Segmentation
What is Market Segmentation?
‘Market Segmentation’ was first coined in 1956
Research shows that marketers noted a 760% increase in revenue from segmented campaigns
Market Segmentation and Big Data
Big data streamlines your marketing efforts
Types of Segmentation
1. Demographic Segmentation
52% of consumers would share personal data in exchange for product recommendations, and 53% would do the same for personalised shopping experiences
2. Geographic Segmentation
3. Psychographic Segmentation
4. Behavioural Segmentation
Firmographic Segmentation
The M.A.S.D.A. Model
Benefits of Market Segmentation
Market Segmentation Improves Business Focus
Market Segmentation Improves Product Development
Market Segmentation Optimises User Experience [UX]
Market Segmentation Helps Break into New Markets
How to Create Great Segments
1. Set Your Objective
2. Develop a Segmentation Strategy
Research
"Find out as much as you can about existing customers, analyse your data [and] talk to your customers"
Data
3. Execute Go-To-Market Strategy
“Whoever understands the customer best wins.”
Four Little-known Tips for Market Segmentation
1. Communication is Key
2. Customer Journey Mapping Matters
3. Don’t define your segments too broadly
4. Be consistent with your segments globally
Brand consistency is the pattern of expression that affects what people think about your company.
Market Segmentation Analytics
Social Media
89% of shoppers who engage with retailers via social media channels say those interactions have an impact on their purchasing choices
Web Analytics
This is the real value and purpose of marketing analytics: Simply put, marketing analytics tells you what is working, what is not working, and how to adjust your marketing activities based on this feedback
Conclusion
H3Market Segmentation
H2WithAnchorsThe Essential Guide to Market Segmentation
What is Market Segmentation?
‘Market Segmentation’ was first coined in 1956
Research shows that marketers noted a 760% increase in revenue from segmented campaigns
Market Segmentation and Big Data
Big data streamlines your marketing efforts
Types of Segmentation
1. Demographic Segmentation
52% of consumers would share personal data in exchange for product recommendations, and 53% would do the same for personalised shopping experiences
2. Geographic Segmentation
3. Psychographic Segmentation
4. Behavioural Segmentation
Firmographic Segmentation
The M.A.S.D.A. Model
Benefits of Market Segmentation
Market Segmentation Improves Business Focus
Market Segmentation Improves Product Development
Market Segmentation Optimises User Experience [UX]
Market Segmentation Helps Break into New Markets
How to Create Great Segments
1. Set Your Objective
2. Develop a Segmentation Strategy
Research
"Find out as much as you can about existing customers, analyse your data [and] talk to your customers"
Data
3. Execute Go-To-Market Strategy
“Whoever understands the customer best wins.”
Four Little-known Tips for Market Segmentation
1. Communication is Key
2. Customer Journey Mapping Matters
3. Don’t define your segments too broadly
4. Be consistent with your segments globally
Brand consistency is the pattern of expression that affects what people think about your company.
Market Segmentation Analytics
Social Media
89% of shoppers who engage with retailers via social media channels say those interactions have an impact on their purchasing choices
Web Analytics
This is the real value and purpose of marketing analytics: Simply put, marketing analytics tells you what is working, what is not working, and how to adjust your marketing activities based on this feedback
Conclusion
Body  Get Started With Hurree Whether you want to understand your audience behaviour or send campaigns across multiple platforms based on that behaviour, Hurree has a solution for you.         Product   Why Hurree? Cross-Platform  Analytics Dashboard Plug & Play Integrations Smart Insights FAQS         Resources   Blog   Ebooks   Infographics   Videos   Podcasts   Market Segmentation   Market Strategy   Data Integration   Push Notifications   Company   About Us   Contact Us   Hurree Brand   Careers   Become a Partner     
Topics
  • Topic
  • Tf
  • Position
  • hurree
  • 4
  • 12
Result 13
TitleWhat is Marketing Segmentation and How You Can Create One
Urlhttps://useinsider.com/what-is-marketing-segmentation/
DescriptionMarketing Segmentation When Done Right Can Help in Growth and Minimizing Wastage on Irrelevant Media Channels and Strategies
DateSep 30, 2020
Organic Position13
H1What is marketing segmentation?
H2What is Market Segmentation?
Relationship between Market Segmentation, Target Marketing and Positioning?
What Are The Types of Marketing Segmentation?
How do you develop a marketing segmentation strategy?
How Insider Can Help in Marketing Segmentation
H3Understanding target marketing
Decoding Positioning
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
Geographic Segmentation
Conclusion
H2WithAnchorsWhat is Market Segmentation?
Relationship between Market Segmentation, Target Marketing and Positioning?
What Are The Types of Marketing Segmentation?
How do you develop a marketing segmentation strategy?
How Insider Can Help in Marketing Segmentation
BodyWhat is marketing segmentation? Christopher Lowe Sep 30, 2020 Christopher Lowe Sep 30, 2020 The success of a business lies in offering the right product to the right consumer. To do this, marketers need to know their customers inside out. This makes market segmentation a vital tool for organizations, to study and segment consumer behavior. It can reap huge dividends. A Harvard Business School survey conducted in the US found that 95% new products fail due to ineffective marketing segmentation.  Every consumer comes with unique requirements. So a one-size-fits-all marketing strategy will not work to engage users across the board. Marketing segmentation can help companies divide users into unique groups, in order to analyze their needs and communicate with them effectively. This gives a competitive advantage to organizations, as well as improve Return on Ad Spend (ROAS).  A quick overview of what you’ll read in this blog: What is marketing segmentation? What is the relationship between market segmentation, target marketing and positioning? What are the types of marketing segmentation? How do you develop a market segmentation strategy? How can Insider help you with marketing segmentation? Table of Contents What is Market Segmentation? Relationship between Market Segmentation, Target Marketing and Positioning? What Are The Types of Marketing Segmentation? How Do You Develop a Market Segmentation Strategy? How Insider Can Help in Marketing Segmentation What is Market Segmentation? Marketing segmentation is the process of creating customer groups based on common behavioral and consumption patterns. In fact, demographic, psychographic, behavioral, and geographic similarities cluster customers. Specifically, these four segments break into subcategories to optimize marketing strategy. Understanding target marketing. In today’s digital world, marketing has become a precise and customer-centric process. Targeting your customers with specific advertisements that are relevant and timely for them works better, than running a generic, fancy ad campaign. Decoding Positioning. This is a strategic exercise that outlines the USP of a product and highlights what makes it better than its competitors. This exercise is a basic tenet of every marketing story. It works at three levels: find out who the right audience is, find out their needs and craft a marketing strategy that tells them how the product is best-fit for them. The better a product’s positioning, the higher its business success. Relationship between Market Segmentation, Target Marketing and Positioning? Market segmentation, target marketing and positioning is a chain of events that result in a well-rounded marketing strategy. All three rely on each other to perform a perfect marketing masterstroke. Marketing segmentation categorizes a customer base according to their interests. This helps marketers target potential customers with relevant products. This, in turn, optimizes their marketing strategy. Take the market segmentation example of YouTube, which segments users and then places advertisements as per their interests.  Once marketers have the relevant data on customers and their requirements, they can position a product in a way that ticks all the boxes for the user. This way, marketers can position a product or a service effectively and improve conversion rates on their leads. What Are The Types of Marketing Segmentation? There are four broad types, based on their unique attributes. Each is subdivides into smaller categories, to serve them better. Demographic segmentationPsychographic segmentationBehavioral segmentationGeographic segmentation Demographic segmentation. It’s the simplest and most generalized segmentation category. It creates large groups of people based on their age, gender, religion, location or occupation. For example, a beauty cream is more relevant to women in the age group of 16 to 35 years, rather than men.  Psychographic segmentation. People who think alike usually shop alike. The consumer is segmented based on their attitudes, lifestyles, interests or values. Though psychographic segmentation isn’t as easy to mark as demographic, it gives marketers deeper insights into their audience. For example, if a consumer is highly concerned about the privacy features of her smartphone, she might opt to buy an iPhone.  Behavioral segmentation. Marketing expert Jon Miller said: “Knowing who your customers are is great. Knowing how they behave is better.” Behavioral segmentation divides customers based on what they do, using insights derived from customers’ actions. It is based on patterns of behavior displayed by customers as they interact with a company or make a purchase decision.  Examples: Buying patterns of a user, brand interaction, website interaction, engagement on an app or website, loyalty. Geographic Segmentation. People are categorized based on geographical boundaries, so that marketers can better serve customers in a particular area. Besides geographic units, factors like climate, cultural preferences and urban-suburban-rural divides also factor in to segment consumers.  How do you develop a marketing segmentation strategy? We’ve understood marketing segmentation at a theoretical level. Now let’s delve into how it works at a practical level. Here’s a step-by-step guide to how marketers can develop a market segmentation strategy: Analyze your existing customers: This will help marketers understand their customers’ behavior. Here are some marketing techniques to engage with customers: Get feedback: Ask customers about their experience with your product and optimize it accordingly. Brainstorm with your sales team: Your sales team spends the most time interfacing with the customer and knows them well. Use insights from this team as a critical resource. Analyze your website analytics: There’s enough data on your website- time spent on your website, what is the bounce rate, which page did they spend maximum time on. Use these metrics to understand your customer and engagement levels.Analyze audience interest: If a consumer is visiting your website to explore a particular product category, put them in the concerned psychographic segment. 2. Build a consumer segment group for your product: Once you’ve understood your consumer, you can draw a complete picture of your target user group. This will help you get a 360 degree understanding of your consumer and create the right marketing strategy to target them.  3. Create a brand positioning for your product: When a marketer is clear about who his potential customer is, it becomes easy to position a product in a way that it addresses the user’s issues.  4. Find the right market segment that’s a right-fit for your brand: This is where you link your product’s positioning with your consumer’s requirements. For example: What problem does your product solve? Is there a customer segment that not having its needs met? Link the two, and find your right-fit user segment. 5. Launch your campaign: The homework: check. It’s time to launch your campaign. Of course to play completely safe, you can A/B Test your campaign for optimal results.  How Insider Can Help in Marketing Segmentation. Marketers segment their customers to gain insight into buyer personas. Even then, missteps can happen in the segmentation process. At times, segmentation gets confused with plain demographics. Or a company may not close the gaps between consumer segmentation and creating the right strategies. Marketers need to ask some critical questions: Why do you want to segment? How will the marketing campaign encompass all the information they collect about customers and the market?  Technology can help marketers create the right customer segment groups and engage with them using the right tools. Let’s look at some of these handy tech tools: Use Predictive Segments & App Tracker to detect users who are about to uninstall and switch to a rival brand. Engage to bring them back onboard. Let’s take an example of a finance company that has an app to sell services like loans, insurance and mutual funds. It’s a leading industry brand and its app has been downloaded by thousands of users. But competition is stiff. The company realizes that a growing number of its VIP users are uninstalling its app and switching to a rival company. How can it halt the trend? How can it convince someone who has decided to move to a competitor to stay on? The company realizes that if its existing customers switch to a rival company, it will directly impact its Customer Lifetime Value metric. After all, it costs less to keep existing customers than to acquire new ones.  Using Insider’s Predictive Segments and App Tracker, the finance firm is able to track the online behavior of its users, and find out if they are following a competitor’s application. Users enter a segment likely to uninstall their app in the future. Next, comes engagement with a clear target. Naturally, the company doesn’t want to lose a consumer to a rival brand at any cost.  Once this user segment is identified like above, the company uses Insider’s Architect to engage with the consumer through appropriate channels. If the user is opted-in to the email channel send a strong offer, if the user is not opted-in, send an app push notification which specifies new product arrivals. If the user does not take any action send him to Facebook remarketing channel. The emails highlight the ongoing relationship between the consumer and the brand and the special deals they can avail as long-term clients. The users are made to feel unique and opt to remain onboard.  2. Target users who visit a product page multiple times but don’t purchase. Help them change their mind. A travel company offers customized holidays, hotel bookings and flight tickets through its website. During one of its audits, the company discovered that there was a large base of users who would visit its website, check out holiday destinations and airfares but did not book anything. One thing is clear to the company: this is a user segment that is highly likely to purchase. They want to go on that holiday to Egypt or Greece but seem to have a change of mind at the last minute. The company decides to engage with these users to get them to convert. As a first step, it created a segment of consumers who visited the website more than five times in one week.  Next, using Insider’s Architect, it started sending them web push notifications, offering steal hotel deals and the cheapest airfares available. If the user did not respond to the notifications, it was followed with emails.  The strategy works and users land on the company website. Insider’s Onsite Smart Recommender takes over from here, showing a personalized webpage to them as per their travel interests. As the users revisit the page, Smart Recommender’s Shuffling application shuffles the categories and shows the users a new product in every visit. The personalized website experience increases conversion rates. 3. Cut down on cart abandonment by creating urgency around your product. Thousands of shoppers go online to shop with an e-commerce retailer, who sold an array of products: from electronic items and smartphones, to shoes and clothes. The company, however, realized that there were a growing number of cart abandoners on the site. They would add an item from a specific product category and then not return to purchase for days.  Besides hampering sales, this posed another problem: the item in the cart automatically reduced the stock numbers listed with the company. They were not able to show it to other customers. Besides hampering sales, this posed another problem: the item in the cart automatically reduced the stock numbers listed with the company. They were not able to show it to other customers. To convert the cart abandoners, the retailer began sending them dynamic push notifications, using Insider’s Automated App Push. When a user clicked on this notification, she landed directly on the product page of the sweatshirt that she had left forgotten in her cart. Insider’s Social Proof took charge from here. To build urgency around the product, the tool posted a banner on the product page: “Only 10 items left in stock.”  This nudged the consumer to make the purchase before it ran out of stock.  4. Target new and returning users by persuading them to stay on the website, register and purchase. Let’s take an example of an e-commerce company. It’s a new company, has just launched its website and is looking at attracting visitors to its webpage to drive sales. E-retail is a crowded marketplace and the company doesn’t want to lose the consumers who land on its webpage for the first time to check out its product line up. The company used Insider’s Exit Intent to capture a user’s cursor movement on the webpage. If the tool sensed that the user was about to click out, a pop up showed up on the webpage, handing out offers like free shipping and money back guarantee. This was a clincher, as most users opted to take up the offer, after sharing their email id. This way, the startup retailer got to build its user database as well. 5. Retarget registered users by reinforcing the benefits of your product.  As a global fitness fad gains momentum, a fitness app saw the number of registrations soar on its application. However, the high registration rates were not translating into an equally high number of active users.  The firm drew a marketing strategy to engage users who registered for its fitness programs but did not start a session for a fortnight. It used Insider’s Mobile App Push, to send notifications to these users. Not only did the notifications talk about the various workout programs and free online classes that the company offered, but also highlighted the importance of staying fit to lead a meaningful life. The idea worked wonders with consumers. Example of Insider’s Mobile App Push that send notifications Conclusion . Marketing segmentation helps companies target customers based on their unique characteristics and requirements. It is easier for businesses to focus their marketing energies and resources on reaching the right audiences to achieve their business goals. Getting a segmentation strategy right can, however, take time and effort. Make it seamless with the right technology. Schedule a demo Written by Christopher Lowe Christopher has a long history of driving value and creating personalized, omnichannel journeys that enhance customer experience. He's passionate about learning and development and has a keen interest in developing economies, especially ones with a lot of room for digital growth. How-to Optimizing your Customer Lifetime Value (CLV) with a mobile-first marketing strategy See All How-to How to optimize Customer Lifetime Value and the most effective tools for marketers See All How-to Web push win-back campaigns: Re-engaging inactive customer segments for higher conversions See All © 2021 Insider. All rights reserved. Subscribe to our newsletter © 2021 Insider. All rights reserved. PlatformIndividualize Connect Predict ResourcesSuccess Stories Ebooks Reports Webinars Glossary Blog CompanyAbout Us Partner with Insider Newsroom Contact Us We’re Hiring! PoliciesPrivacy Policy Product Privacy Policy Terms of Use Security SOC 2 Information Security Policy Anti-Corruption Policy GDPR GDPR Data Subject Access Request Form CCPA Data Subject Access Request Form This website uses cookiesCookies are used on this website to personalize content and ads and to provide analytics about website usage. We also share information about your use of our website with our social media, advertising, and analytics partner. Our partners may combine this information with other data that you have provided to them or that they have collected in the course of your use of the Services. Please make your individual settings about the types of cookies that should be allowed. Please note that due to your setting, all functions of the website may no longer be available. You can also revoke your consent at any time. Further information on the details of the data involved, the storage period, access to your data by third parties, third country data transfers and your right of revocation can be found under “cookie settings” and in our privacy policy. Legal information. Cookie Settings Only NecessaryAccept AllManage consent Close Privacy Overview. This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience. Necessary Necessary Always Enabled Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously. CookieDurationDescription__hssrcsessionThis cookie is set by Hubspot. According to their documentation, whenever HubSpot changes the session cookie, this cookie is also set to determine if the visitor has restarted their browser. If this cookie does not exist when HubSpot manages cookies, it is considered a new session.cookielawinfo-checkbox-advertisement1 yearThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement".cookielawinfo-checkbox-analytics1 yearThis cookies is set by GDPR Cookie Consent WordPress Plugin. The cookie is used to remember the user consent for the cookies under the category "Analytics".cookielawinfo-checkbox-necessary1 yearThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".cookielawinfo-checkbox-performance1 yearThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". Functional functional Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. CookieDurationDescription__hssc30 minutesThis cookie is set by HubSpot. The purpose of the cookie is to keep track of sessions. This is used to determine if HubSpot should increment the session number and timestamps in the __hstc cookie. It contains the domain, viewCount (increments each pageView in a session), and session start timestamp.bcookie2 yearsThis cookie is set by linkedIn. The purpose of the cookie is to enable LinkedIn functionalities on the page.langsessionThis cookie is used to store the language preferences of a user to serve up content in that stored language the next time user visit the website.lidc1 dayThis cookie is set by LinkedIn and used for routing. Performance performance Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors. CookieDurationDescriptionYSCsessionThis cookies is set by Youtube and is used to track the views of embedded videos. Analytics analytics Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. CookieDurationDescription__hstc1 year 24 daysThis cookie is set by Hubspot and is used for tracking visitors. It contains the domain, utk, initial timestamp (first visit), last timestamp (last visit), current timestamp (this visit), and session number (increments for each subsequent session)._ga2 yearsThis cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors._gat_UA-81205217-11 minuteThis is a pattern type cookie set by Google Analytics, where the pattern element on the name contains the unique identity number of the account or website it relates to. It appears to be a variation of the _gat cookie which is used to limit the amount of data recorded by Google on high traffic volume websites._gcl_au3 monthsThis cookie is used by Google Analytics to understand user interaction with the website._gid1 dayThis cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form.hubspotutk1 year 24 daysThis cookie is used by HubSpot to keep track of the visitors to the website. This cookie is passed to Hubspot on form submission and used when deduplicating contacts. Advertisement advertisement Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads. CookieDurationDescription_fbp3 monthsThis cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website.bscookie2 yearsThis cookie is a browser ID cookie set by Linked share Buttons and ad tags.fr3 monthsThe cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin.IDE1 year 24 daysUsed by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile.test_cookie15 minutesThis cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies.VISITOR_INFO1_LIVE5 months 27 daysThis cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website. Others others Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. CookieDurationDescriptionAnalyticsSyncHistory1 monthNo descriptionCONSENT16 years 7 months 15 days 6 hoursNo descriptioncookielawinfo-checkbox-functional1 yearThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".cookielawinfo-checkbox-others1 yearNo descriptionins-c1 dayNo descriptionins-storage-version1 yearNo descriptioninsdrPushCookieStatus1 dayThis cookie is set by the provider Insider. This cookie is used for web push recieving.RUL1 yearNo descriptionUserMatchHistory1 monthLinkedin - Used to track visitors on multiple websites, in order to present relevant advertisement based on the visitor's preferences.
Topics
  • Topic
  • Tf
  • Position
  • user
  • 53
  • 13
  • cookie
  • 44
  • 13
  • marketing
  • 38
  • 13
  • segmentation
  • 38
  • 13
  • website
  • 37
  • 13
  • customer
  • 36
  • 13
  • product
  • 30
  • 13
  • cooky
  • 28
  • 13
  • insider
  • 27
  • 13
  • company
  • 24
  • 13
  • segment
  • 23
  • 13
  • consumer
  • 20
  • 13
  • set
  • 19
  • 13
  • cookie set
  • 17
  • 13
  • target
  • 16
  • 13
  • marketing segmentation
  • 15
  • 13
  • strategy
  • 15
  • 13
  • visitor
  • 14
  • 13
  • app
  • 13
  • 13
  • information
  • 13
  • 13
  • marketer
  • 13
  • 13
  • market
  • 13
  • 13
  • consent
  • 13
  • 13
  • data
  • 12
  • 13
  • number
  • 12
  • 13
  • market segmentation
  • 11
  • 13
  • category
  • 11
  • 13
  • time
  • 11
  • 13
  • analytic
  • 11
  • 13
  • marketing strategy
  • 10
  • 13
  • based
  • 9
  • 13
  • advertisement
  • 9
  • 13
  • track
  • 9
  • 13
  • hubspot
  • 8
  • 13
  • fit
  • 6
  • 13
  • set gdpr cookie
  • 5
  • 13
  • gdpr cookie consent
  • 5
  • 13
  • user consent cooky
  • 5
  • 13
  • consent cooky category
  • 5
  • 13
  • existing customer
  • 5
  • 13
  • user opted
  • 5
  • 13
  • web push
  • 5
  • 13
  • target marketing
  • 5
  • 13
  • segmentation strategy
  • 5
  • 13
  • set gdpr
  • 5
  • 13
  • gdpr cookie
  • 5
  • 13
  • cookie consent
  • 5
  • 13
  • user consent
  • 5
  • 13
  • consent cooky
  • 5
  • 13
  • cooky category
  • 5
  • 13
  • market segmentation target
  • 4
  • 13
  • segmentation target marketing
  • 4
  • 13
  • target marketing positioning
  • 4
  • 13
  • cookie set gdpr
  • 4
  • 13
  • user segment
  • 4
  • 13
  • customer lifetime
  • 4
  • 13
  • architect
  • 4
  • 13
  • segmentation target
  • 4
  • 13
  • marketing positioning
  • 4
  • 13
  • app push
  • 4
  • 13
  • website cooky
  • 4
  • 13
  • google analytic
  • 4
  • 13
  • relationship market segmentation
  • 3
  • 13
  • type marketing segmentation
  • 3
  • 13
  • develop market segmentation
  • 3
  • 13
  • market segmentation strategy
  • 3
  • 13
  • insider marketing segmentation
  • 3
  • 13
  • cookie set hubspot
  • 3
  • 13
  • christopher lowe
  • 3
  • 13
  • segment consumer
  • 3
  • 13
  • engage user
  • 3
  • 13
  • relationship market
  • 3
  • 13
  • type marketing
  • 3
  • 13
  • develop market
  • 3
  • 13
  • insider marketing
  • 3
  • 13
  • position product
  • 3
  • 13
  • customer segment
  • 3
  • 13
  • push notification
  • 3
  • 13
  • user visit
  • 3
  • 13
  • product page
  • 3
  • 13
  • mobile
  • 3
  • 13
  • how
  • 3
  • 13
  • set hubspot
  • 3
  • 13
  • cookie store
  • 3
  • 13
  • purpose cookie
  • 3
  • 13
  • yearsthi cookie
  • 3
  • 13
  • daythi cookie
  • 3
  • 13
  • year 24
  • 3
  • 13
  • daysthi cookie
  • 3
  • 13
  • timestamp visit
  • 3
  • 13
  • store information
  • 3
  • 13
  • visitor website
  • 3
  • 13
  • track visitor
  • 3
  • 13
Result 14
TitleWhat is Market Segmentation? Methods & Examples | 280 Group
Urlhttps://280group.com/what-is-product-management/skills/market-segmentation/
DescriptionMarket segmentation determines who is in your target market – and who is out. Look at all the people who could buy your product and decide how to break them up into groups that have similar needs, wants or demand characteristics
Date
Organic Position14
H1What is Market Segmentation?
H2What is Market Segmentation?
What Makes Up Market Segmentation?
Why Develop Market Segmentation?
Product Market Segmentation:
Who Develops Customer and Market Segmentation?
What is Market Segmentation for Product Development
Market Segmentation for Marketing
H31What is Product Management?
2Roles and Responsibilities
3Skills and Strategies
4Documents and Templates
5Agile Product Management
6The Ultimate Guide to Digital Product Management
Develop Digital Products That Matter
A Simple Example of Market Segmentation
McDonald’s hungry teenager offering
McDonald’s small children and family offering
Let’s Dive Deeper Into Key Roles Associated with Product Management
H2WithAnchorsWhat is Market Segmentation?
What Makes Up Market Segmentation?
Why Develop Market Segmentation?
Product Market Segmentation:
Who Develops Customer and Market Segmentation?
What is Market Segmentation for Product Development
Market Segmentation for Marketing
BodyWhat is Market Segmentation? What is market segmentation? What is customer segmentation? Are they the same? What is Market Segmentation? In business, market segmentation determines who is in your target market – and who is not. When utilizing market segmentation you look at all the people who could buy your product and decide how to break them up into groups that have similar needs, wants or demand characteristics. When you do this, you are able to communicate with different groups using different messages and marketing techniques. It’s common to get these confused because they are a similar. Although we write customer segmentation, it’s more useful to look at it as market segmentation. Most of our products aren’t sold to one customer. They are sold to a group of customers that act in a similar way. That’s why we use the term market segmentation. In the section on how to create a positioning statement, the format starts with this term: (target customer). After seeing many versions of Product Manager’s positioning statements, it’s clear that many Product Managers aren’t very clear about who their target customer is at all. Hint: “Corporate customer” is not a market segment. In order to position your product correctly in the marketplace you must develop your customer and market segments first. What Makes Up Market Segmentation? Market segmentation determines who is in your target market – and who is out. The simple answer is that you look at all the people who could buy your product and decide how to break them up into groups that have similar needs, wants or demand characteristics. When you do this, you are able to communicate with different groups using different messages and marketing techniques. Develop Digital Products That Matter. Learn the iterative customer-led product management methodology used by successful companies. Register Now Why Develop Market Segmentation? Market segmentation can save you a lot of time and effort. If you define who you are talking to, you also define who you are NOT talking to. As Philip Kotler so aptly said: “No one in their right mind tries to sell to everyone.” With extremely few exceptions, it’s hard enough to target the customers you really want to talk to and who really value the product or service you provide to them. Let’s agree that anything else wastes time and money. Product Market Segmentation:. Product Managers typically work with marketing teams to develop their market segmentation. They can use data from purchased surveys, their internal customer surveys, registration documents, website visits and any other data available to them. They then break down the details until they find natural groupings which form the starting point of their market segments. Market Segmentation – Philip Kotler Who Develops Customer and Market Segmentation? Product Managers typically work with Product Marketing Managers and marketing folks to develop their market segmentation. They can use data from purchased surveys, their internal customer surveys, registration documents, website visits and any other data available to them. They then break down the details until they find natural groupings. Chances are that you already do this instinctively. However, confirmation from data sources will make your segments clearer and your decision making easier. What is Market Segmentation for Product Development. While much of the segmentation focuses on marketing to customers, segmentation is extremely useful for developing products. Instead of a market focus, here Product Managers often personalize the segment to create a customer persona. A persona is an archetype customer that developers can focus their efforts and imagination on. Personas often have names and even pictures associated with them. Market Segmentation for Marketing. In most cases, customer and market segmentation focuses on marketing. Who do we talk to? We want to define the segment enough so that we can make marketing decisions using them. A Simple Example of Market Segmentation. Let’s try a simple market segmentation example. Let’s use fast food. How about McDonalds? Let’s create a segmentation of two groups and see how the product and the marketing change the offering: Hungry teenagersSmall children and the rest of their family Teenagers Needs and/or wants – Be with their friends, Eat cheaplyGoals and Motivation – Get food without having to deal with parentsBuying behaviors or triggers – Teenagers are virtually always hungryValues and Attitudes – Cheap is betterLifestyle – On the go with friends Small children (with family) Needs and/or wants – Want tasty food that they can hold themselvesGoals and Motivation – Have eating be a fun experienceBuying behaviors or triggers – Time is of the essence when faced with a hungry childValues and Attitudes – Like colorful areas, Believe marketing implicitlyLifestyle – Tagging along with their parents McDonald’s hungry teenager offering. Product offering: A variety of large hamburgers at a variety of price pointsDrive through or sit in. You can still hang out with your friends in the boothsOpen late – sometimes all night Marketing: Emphasizes groups of teens laughing and having fun.Talks about reasonable price points for certain products McDonald’s small children and family offering. Product offering: The happy meal: colorful box, small portions, and a TOY!Drive through or sit in. It depends on what the family’s plans are. Marketing: Ads on TV showing happy meals. A token apple slice bag shown to make sure it’s ‘healthy.’Kids laughing and giggling with friends or a quiet time with their parent By creating market segmentation, a company is able to dissect what makes each type of customer happy and put all aspects of the product offering in place and then use marketing techniques to communicate why that market segment should buy their product. So what different market segments are you talking to? Have you identified them and do you know which messages will make the difference when it comes to your product? Share the gift of knowledge. ShareShareTweetEmail Let’s Dive Deeper Into Key Roles Associated with Product Management. What is Market Research and Competitive Analysis? What are Product Pricing Strategies? What is Product Vision? ShareShareTweetEmail Develop Digital Products That Matter. Learn the iterative customer-led product management methodology used by successful companies. Register Now ✕ I'm currently a Product Manager, Product Marketer, or Product Owner. Next Step I’m a Director, VP, Manager or Executive. Next Step I want to become a Product Manager, Product Marketer, or Product Owner. Next Step ✕ I’m a Director, VP, Manager or Executive. Next Step I want to become a Product Manager, Product Marketer, or Product Owner. Next Step
Topics
  • Topic
  • Tf
  • Position
  • product
  • 38
  • 14
  • market
  • 31
  • 14
  • segmentation
  • 27
  • 14
  • market segmentation
  • 22
  • 14
  • customer
  • 19
  • 14
  • marketing
  • 15
  • 14
  • manager
  • 13
  • 14
  • product manager
  • 9
  • 14
  • segment
  • 8
  • 14
  • target
  • 7
  • 14
  • group
  • 7
  • 14
  • develop
  • 7
  • 14
  • step
  • 6
  • 14
  • offering
  • 6
  • 14
  • segmentation market segmentation
  • 5
  • 14
  • segmentation market
  • 5
  • 14
  • market segment
  • 5
  • 14
  • mcdonald
  • 5
  • 14
  • family
  • 5
  • 14
  • data
  • 5
  • 14
  • market segmentation product
  • 4
  • 14
  • owner step
  • 4
  • 14
  • segmentation product
  • 4
  • 14
  • customer market
  • 4
  • 14
  • hungry
  • 4
  • 14
  • small
  • 4
  • 14
  • break
  • 4
  • 14
  • similar
  • 4
  • 14
  • time
  • 4
  • 14
  • survey
  • 4
  • 14
  • friend
  • 4
  • 14
  • market segmentation market
  • 3
  • 14
  • develop market segmentation
  • 3
  • 14
  • product manager product
  • 3
  • 14
  • manager product marketer
  • 3
  • 14
  • product marketer product
  • 3
  • 14
  • marketer product owner
  • 3
  • 14
  • product owner step
  • 3
  • 14
  • customer segmentation
  • 3
  • 14
  • buy product
  • 3
  • 14
  • marketing technique
  • 3
  • 14
  • target customer
  • 3
  • 14
  • product management
  • 3
  • 14
  • develop market
  • 3
  • 14
  • product market
  • 3
  • 14
  • product offering
  • 3
  • 14
  • manager product
  • 3
  • 14
  • product marketer
  • 3
  • 14
  • marketer product
  • 3
  • 14
  • product owner
  • 3
  • 14
  • talking
  • 3
  • 14
  • persona
  • 3
  • 14
  • food
  • 3
  • 14
  • child
  • 3
  • 14
  • teenager
  • 3
  • 14
  • happy
  • 3
  • 14
  • marketer
  • 3
  • 14
  • owner
  • 3
  • 14
Result 15
TitleMarket Segmentation | Boundless Marketing
Urlhttps://courses.lumenlearning.com/boundless-marketing/chapter/market-segmentation/
Description
Date
Organic Position15
H1
H2Market Segmentation
What Are Markets
The Importance of Market Segmentation
Developing a Market Segmentation
H3Consumer Marketing
Learning Objectives
Key Takeaways
Defining the Market
Types of markets
Consumer Markets
Industrial Markets
Institutional Markets
Reseller Markets
Learning Objectives
Key Takeaways
Benefits of Segmentation
The Segmented Market
Choosing a Target Market from within a Defined Segment
Learning Objectives
Key Takeaways
Criteria for Segmenting
Segmentation Strategies
Segmenting Methods
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Behavioral Segmentation
Occasions
Benefits
Usage Rate
H2WithAnchorsMarket Segmentation
What Are Markets
The Importance of Market Segmentation
Developing a Market Segmentation
BodySkip to main content Consumer Marketing. Market Segmentation. What Are Markets. Markets are a group of potential buyers with needs and wants and the purchasing power to satisfy them. Learning Objectives. Diagram the different types of markets and their relationship to one another Key Takeaways. Key Points. Markets can be more tightly defined as a people who have a true need or want for the company’s offering, the ability to pay for it, and the willingness and authority to buy it. The total number of buyers must be large enough to be profitable for the company. Markets can also be a place such as a shopping center. This identification of markets is useful for marketing decision-making purposes because factors such as product features, price, location of facilities, and promotional design are affected by geographic factors. The market can be defined as an economic entity because in most cases, a market is characterized by a dynamic system of economic forces including supply, demand, competition, and government intervention. The primary types of markets are consumer markets, industrial markets, institutional markets, and reseller markets. These categories are not always clear-cut and in some industries, a business may be in a different category altogether or may even encompass multiple categories. Key Terms. latent: Existing or present but concealed or inactive. esoteric: Confidential; private. buyer’s market: An excess of supply over demand, leading to abnormally low prices. A situation when there is an abundance of product, prices are usually low, and customers dictate the terms of sale. Defining the Market. A basic definition of a market is a group of potential buyers with needs and wants and the purchasing power to satisfy them. We will also consider a more expansive definition given the complexities of these components. The Market is People: Since exchange involves two or more people, the market can be thought of as people, individuals, or groups. People constitute markets only if they currently recognize their need or desire for an existing or future product. Individuals and members of households are the largest category of markets, but business establishments and other organized behavior systems also represent valid markets. However, people or organizations must meet all five of the following basic criteria in order to represent a valid market: There must be a true need or want for the product, service, or idea; this need may be recognized, unrecognized, or latent. The person or organization must have the ability to pay for the product via means acceptable to the marketer. The person or organization must be willing to buy the product. The person or organization must have the authority to buy the product. The total number of people or organizations meeting the previous criteria must be large enough to be profitable for the marketer. The Market is a Place: The market can also be thought of as a place or as a geographical area within which trading occurs. International markets, American markets, a shopping center, and even the site of a single retail store can be called a market. Shopping Mall: A market is a place where trading takes place. An example of a market is a shopping mall. This identification of markets is useful for marketing decision-making purposes because factors such as product features, price, location of facilities, and promotional design are all affected by geographic factors. Finally, a market may be somewhere other than a geographical region, such as a catalog or ad that allows you to place an order without a marketing intermediary. The Market is an Economic Entity: In most cases, a market is characterized by a dynamic system of economic forces including supply, demand, competition, and government intervention. The terms buyer’s market and seller’s market describe different conditions of bargaining strength. Finally, the extent of personal freedom and government control produces free market systems, socialistic systems, and other systems of trade and commerce. Types of markets. The primary types of markets are consumer markets, industrial markets, institutional markets, and reseller markets. These categories are not always clear-cut. In some industries, a business may be in a different category altogether or may even encompass multiple categories. It is also possible that a product may be sold in all four markets. Consumer Markets. Consumer markets include individuals and households who buy consumer goods and services for their own personal use. They are not interested in reselling the product or setting themselves up as a manufacturer. Industrial Markets. The industrial market consists of organizations and the people who work for them, those who buy products or services for use in their own businesses or to make other products. For example, a steel mill might purchase computer software, pencils, and flooring as part of the operation and maintenance of their business. Institutional Markets. The institutional market is made up of various types of profit and nonprofit institutions, such as hospitals, schools, churches, and government agencies. Institutional markets differ from typical businesses because they are motivated by satisfying esoteric, often intangible, needs rather than profits or market share. Because institutions operate under different restrictions and employ different goals, marketers must use different strategies to be successful. Reseller Markets. All intermediaries that buy finished or semi-finished products and resell them for profit are part of the reseller market. This market includes approximately 383,000 wholesalers and 1,300,000 retailers that operate in the US. With the exception of products obtained directly from the producer, all products are sold through resellers. Producers are always cognizant of the fact that successful marketing to resellers is just as important as successful marketing to consumers. The Importance of Market Segmentation. Segmentation splits buyers into groups with similar needs and wants to best utilize a firm’s finite resources through buyer based marketing. Learning Objectives. Examine the benefits of market segmentation Key Takeaways. Key Points. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage. Most market segmentations are the techniques used to attract the right customer. Objectives of segmentation are: 1) To reduce risk in deciding where, when, how, and to whom a product, service, or brand will be marketed; 2) To increase marketing efficiency by directing effort specifically toward the designated segment in a manner consistent with that segment’s characteristics. While the market is initially reduced to its smallest homogeneous components (perhaps an individual), business in practice requires the marketer to find common dimensions that will allow him to view these individuals as larger, profitable segments. Key Terms. target: A person (or group of people) that a person or organization is trying to employ or to have as a customer, audience etc. product differentiation: Tangibly or intangibly distinguishing a product from that of all competitors in the eyes of customers. Market segmentation pertains to the division of a set of consumers into persons with similar needs and wants. Market segmentation allows for a better allocation of a firm’s finite resources. Due to limited resources, a firm must make choices in servicing specific groups of consumers. With growing diversity in the tastes of modern consumers, firms are taking note of the benefit of servicing a multiplicity of new markets. Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target and Position. Benefits of Segmentation. While there may be theoretically ‘ideal’ market segments, in reality, every organization engaged in a market will develop different ways of imagining market segments, and create product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage. Most market segmentations are the techniques used to attract the right customer. In essence, the marketing objectives of segmentation analysis are: To reduce risk in deciding where, when, how, and to whom a product, service, or brand will be marketed To increase marketing efficiency by directing effort specifically toward the designated segment in a manner consistent with that segment’s characteristics Market segmentation is a twofold process that includes: Identifying and classifying people into homogeneous groupings, called segments Determining which of these segments are viable target markets. The Segmented Market. The premise of segmenting the market theorizes that people and/or organizations can be most effectively approached by recognizing their differences and adjusting accordingly. By emphasizing a segmentation approach, the exchange process should be enhanced, since a company can more precisely match the needs and wants of the customer. While product differentiation is an effective strategy to distinguish a brand from competitors ‘, it also differentiates one product from another. For example, a company such as Franco-American Spaghetti has differentiated its basic product by offering various sizes, flavors, and shapes. The objective is to sell more product, to more people, more often. The problem is not competition; the problem is the acknowledgment that people within markets are different and that successful marketers must respond to these differences. Choosing a Target Market from within a Defined Segment. While it is relatively easy to identify segments of consumers, most firms do not have the capabilities or the need to effectively market their product to all of the segments that can be identified. Rather, one or more target markets (segments) must be selected. A company selects its target market because it exhibits the strongest affinity to a particular product or brand. It is in essence the most likely to buy the product. Kellogg’s Crunchy Nut Cereal: Kellogg’s segmented its audience into children and adults. The cereal appealed to children, while free bowling appealed to adults. While the market is initially reduced to its smallest homogeneous components (perhaps a single individual), business in practice requires the marketer to find common dimensions that will allow him to view these individuals as larger, profitable segments. Developing a Market Segmentation. A market segmentation is developed based on one of two strategies and several consumer identifying characteristics like demographics and behavior. Learning Objectives. Review the characteristics of market segmentation Key Takeaways. Key Points. The two major segmentation strategies followed by marketing organizations are concentration strategy and multi- segment strategy. Segmentation of a market to reach a target consumer base can be done by defining consumers in terms of geographic, demographic, psychographic, and behavioral characteristics. An ideal market segment is possible to measure, large enough to earn profit, stable, possible to reach, internally homogeneous, externally heterogeneous, consistent in response to market stimulus, reachable in a cost-effective manner, and useful in determining marketing mix. Key Terms. marketing mix: A business tool used in marketing products; often crucial when determining a product or brand’s unique selling point. Often synonymous with the four Ps: price, product, promotion, and place. psychographic segmentation: The division of the market into subsets according to consumers’ lifestyle, personality, values, and social class. psychographic: The science of using psychology and demographics to better understand consumers. market segment: A subset of consumers who have common needs and desires as well as common applications for the relevant goods and services. Criteria for Segmenting. An ideal market segment meets all of the following criteria: It is possible to measure. It must be large enough to earn profit. It must be stable enough that it does not vanish after some time. It is possible to reach potential customers via the organization’s promotion and distribution channel. It is internally homogeneous (potential customers in the same segment prefer the same product qualities ). It is externally heterogeneous. In other words, potential customers from different segments have different quality preferences. It responds consistently to a given market stimulus. It can be reached by market intervention in a cost-effective manner. It is useful in deciding on the marketing mix. Segmentation Strategies. There are two major segmentation strategies followed by marketing organizations: a concentration strategy and a multi-segment strategy. In the concentration strategy, a company chooses to focus its marketing efforts on only one market segment. Only one marketing mix is developed. This strategy is advantageous because it enables the organization to analyze the needs and wants of only one segment and then focus all its efforts on that segment. The primary disadvantage of concentration is that if demand in the segment declines, the organization’s financial position will also decline. Concentration Strategy: Rolex focuses on customers who want a luxury watch. Rolex is a prime example of the concentration strategy in market segmentation. In the multi-segment strategy, a company focuses its marketing efforts on two or more distinct market segments. The organization does so by developing a distinct marketing mix for each segment. They then develop marketing programs tailored to each of these segments. This strategy is advantageous because it can increase total sales since more marketing programs are focused at more customers. The disadvantage of this strategy is the higher costs stemming from the need for multiple marketing programs. Segmenting Methods. Segmentation of a market to define a target consumer base can be done in a variety of methods such as: Geographic Segmentation. Geographic criteria—nations, states, regions, countries, cities, neighborhoods, or zip codes–define the market segments. The geo-cluster approach combines demographic data with geographic data to create a more accurate profile of a specific consumer. In areas prone to rain, you can sell things like raincoats, umbrellas, and gumboots. In hot regions, you can sell summer wear, while in cold regions, you can sell warm clothes. Demographic Segmentation. This consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race, and nationality. Demographic segmentation variables are among the most popular bases for segmenting customer groups because customer wants are closely linked to variables such as income and age and because there is a plethora of demographic data available. Psychographic Segmentation. In psychographic segmentation, consumers are divided according to their lifestyle, personality, values, and social class. Foreigners within the same demographic group can exhibit very different psychographic profiles. Behavioral Segmentation. Consumers are divided into groups according to their knowledge of, attitude toward, use of, or response to a product. It is actually based on the behavior of the consumer. Occasions. Companies can segment the market according to the occasions of use, such as whether the product will be used alone or in a group, or whether it is being purchased as a present or for personal use. Benefits. Companies can segment the market according to the benefits sought by the consumer. Usage Rate. Markets could also be segmented by usage rates. For example, it has been suggested that targeting heavy users can lead to increased sales. Segmenting by usage could divide the market by heavy users vs. light users. Licenses and Attributions CC licensed content, Shared previouslyCuration and Revision. Provided by: Boundless.com. License: CC BY-SA: Attribution-ShareAlikeCC licensed content, Specific attributionIntroducing Marketing by John Burnett. Provided by: Global Text Project. Located at: https://dl.dropboxusercontent.com/u/31779972/Introducing%20Marketing.pdf. License: CC BY: Attributionesoteric. Provided by: Wiktionary. Located at: http://en.wiktionary.org/wiki/esoteric. License: CC BY-SA: Attribution-ShareAlikelatent. Provided by: Wiktionary. Located at: http://en.wiktionary.org/wiki/latent. License: CC BY-SA: Attribution-ShareAlikebuyer's market. Provided by: Wikipedia. Located at: http://en.wikipedia.org/wiki/buyer's%20market. License: CC BY-SA: Attribution-ShareAlikeCityLink Mall. Provided by: Wikimedia. Located at: http://commons.wikimedia.org/wiki/File:CityLink_Mall.JPG. License: CC BY: AttributionIntroducing Marketing by John Burnett. Provided by: Global Text Project. Located at: https://dl.dropboxusercontent.com/u/31779972/Introducing%20Marketing.pdf. License: CC BY: AttributionMarket segmentation. Provided by: Wikipedia. Located at: http://en.wikipedia.org/wiki/Market_segmentation. License: CC BY-SA: Attribution-ShareAlikeMarketing. Provided by: Wikipedia. Located at: http://en.wikipedia.org/wiki/Marketing. License: CC BY-SA: Attribution-ShareAliketarget. Provided by: Wiktionary. Located at: http://en.wiktionary.org/wiki/target. License: CC BY-SA: Attribution-ShareAlikeproduct differentiation. Provided by: Wiktionary. Located at: http://en.wiktionary.org/wiki/product_differentiation. License: CC BY-SA: Attribution-ShareAlikeCityLink Mall. Provided by: Wikimedia. Located at: http://commons.wikimedia.org/wiki/File:CityLink_Mall.JPG. License: CC BY: AttributionCrunchy Nut Spring 2012. Provided by: Wikimedia. Located at: http://commons.wikimedia.org/wiki/File:Crunchy_Nut_Spring_2012.jpg. License: CC BY: AttributionIntroducing Marketing by John Burnett. Provided by: Global Text Project. Located at: https://dl.dropboxusercontent.com/u/31779972/Introducing%20Marketing.pdf. License: CC BY: Attributionpsychographic. Provided by: Wikipedia. Located at: http://en.wikipedia.org/wiki/psychographic. License: CC BY-SA: Attribution-ShareAlikeMarket segmentation. Provided by: Wikipedia. Located at: http://en.wikipedia.org/wiki/Market_segmentation. License: CC BY-SA: Attribution-ShareAlikemarketing mix. Provided by: Wikipedia. Located at: http://en.wikipedia.org/wiki/marketing%20mix. License: CC BY-SA: Attribution-ShareAlikemarket segment. Provided by: Wikipedia. Located at: http://en.wikipedia.org/wiki/market%20segment. License: CC BY-SA: Attribution-ShareAlikeCityLink Mall. Provided by: Wikimedia. Located at: http://commons.wikimedia.org/wiki/File:CityLink_Mall.JPG. License: CC BY: AttributionCrunchy Nut Spring 2012. Provided by: Wikimedia. Located at: http://commons.wikimedia.org/wiki/File:Crunchy_Nut_Spring_2012.jpg. License: CC BY: AttributionRolex Sub2. Provided by: Wikimedia. Located at: http://commons.wikimedia.org/wiki/File:Rolex_Sub2.JPG. License: CC BY-SA: Attribution-ShareAlike Privacy Policy
Topics
  • Topic
  • Tf
  • Position
  • market
  • 104
  • 15
  • segment
  • 37
  • 15
  • segmentation
  • 35
  • 15
  • product
  • 35
  • 15
  • marketing
  • 26
  • 15
  • consumer
  • 23
  • 15
  • license
  • 22
  • 15
  • cc
  • 22
  • 15
  • license cc
  • 21
  • 15
  • provided
  • 21
  • 15
  • strategy
  • 20
  • 15
  • located
  • 20
  • 15
  • person
  • 19
  • 15
  • organization
  • 17
  • 15
  • market segmentation
  • 15
  • 15
  • attribution
  • 14
  • 15
  • license cc by
  • 13
  • 15
  • cc by sa
  • 13
  • 15
  • by sa attribution
  • 13
  • 15
  • cc by
  • 13
  • 15
  • by sa
  • 13
  • 15
  • sa attribution
  • 13
  • 15
  • customer
  • 13
  • 15
  • by
  • 13
  • 15
  • sa
  • 13
  • 15
  • group
  • 11
  • 15
  • company
  • 10
  • 15
  • market segment
  • 9
  • 15
  • firm
  • 9
  • 15
  • key
  • 9
  • 15
  • business
  • 9
  • 15
  • target
  • 8
  • 15
  • demographic
  • 8
  • 15
  • provided wikipedia located
  • 7
  • 15
  • provided wikipedia
  • 7
  • 15
  • wikipedia located
  • 7
  • 15
  • buy
  • 7
  • 15
  • place
  • 7
  • 15
  • category
  • 7
  • 15
  • term
  • 7
  • 15
  • individual
  • 7
  • 15
  • wikipedia
  • 7
  • 15
  • provided wikimedia located
  • 6
  • 15
  • person organization
  • 6
  • 15
  • provided wikimedia
  • 6
  • 15
  • wikimedia located
  • 6
  • 15
  • characteristic market
  • 5
  • 15
  • consumer market
  • 5
  • 15
  • institutional market
  • 5
  • 15
  • product differentiation
  • 5
  • 15
  • concentration strategy
  • 5
  • 15
  • marketing mix
  • 5
  • 15
  • market consumer market
  • 4
  • 15
  • provided wiktionary located
  • 4
  • 15
  • segmentation market
  • 4
  • 15
  • type market
  • 4
  • 15
  • market consumer
  • 4
  • 15
  • industrial market
  • 4
  • 15
  • reseller market
  • 4
  • 15
  • product service
  • 4
  • 15
  • buy product
  • 4
  • 15
  • target market
  • 4
  • 15
  • segment strategy
  • 4
  • 15
  • provided wiktionary
  • 4
  • 15
  • wiktionary located
  • 4
  • 15
  • key takeaway key
  • 3
  • 15
  • takeaway key point
  • 3
  • 15
  • market industrial market
  • 3
  • 15
  • market institutional market
  • 3
  • 15
  • product differentiation strategy
  • 3
  • 15
  • ideal market segment
  • 3
  • 15
  • multi segment strategy
  • 3
  • 15
  • attributionintroducing marketing john
  • 3
  • 15
  • marketing john burnett
  • 3
  • 15
  • john burnett provided
  • 3
  • 15
  • burnett provided global
  • 3
  • 15
  • provided global text
  • 3
  • 15
  • global text project
  • 3
  • 15
  • text project located
  • 3
  • 15
  • project located httpsdldropboxusercontentcomu31779972introducing20marketingpdf
  • 3
  • 15
  • located httpsdldropboxusercontentcomu31779972introducing20marketingpdf license
  • 3
  • 15
  • httpsdldropboxusercontentcomu31779972introducing20marketingpdf license cc
  • 3
  • 15
  • sa attribution sharealikecitylink
  • 3
  • 15
  • attribution sharealikecitylink mall
  • 3
  • 15
  • sharealikecitylink mall provided
  • 3
  • 15
  • mall provided wikimedia
  • 3
  • 15
  • wikimedia located httpcommonswikimediaorgwikifilecitylink_malljpg
  • 3
  • 15
  • located httpcommonswikimediaorgwikifilecitylink_malljpg license
  • 3
  • 15
  • httpcommonswikimediaorgwikifilecitylink_malljpg license cc
  • 3
  • 15
  • market market
  • 3
  • 15
  • market group
  • 3
  • 15
  • learning objectif
  • 3
  • 15
  • key takeaway
  • 3
  • 15
  • takeaway key
  • 3
  • 15
  • key point
  • 3
  • 15
  • market place
  • 3
  • 15
  • supply demand
  • 3
  • 15
  • market industrial
  • 3
  • 15
  • market institutional
  • 3
  • 15
  • key term
  • 3
  • 15
  • market shopping
  • 3
  • 15
  • differentiation strategy
  • 3
  • 15
  • ideal market
  • 3
  • 15
  • segment market
  • 3
  • 15
  • segmentation strategy
  • 3
  • 15
  • multi segment
  • 3
  • 15
  • psychographic segmentation
  • 3
  • 15
  • potential customer
  • 3
  • 15
  • marketing program
  • 3
  • 15
  • attributionintroducing marketing
  • 3
  • 15
  • marketing john
  • 3
  • 15
  • john burnett
  • 3
  • 15
  • burnett provided
  • 3
  • 15
  • provided global
  • 3
  • 15
  • global text
  • 3
  • 15
  • text project
  • 3
  • 15
  • project located
  • 3
  • 15
  • located httpsdldropboxusercontentcomu31779972introducing20marketingpdf
  • 3
  • 15
  • httpsdldropboxusercontentcomu31779972introducing20marketingpdf license
  • 3
  • 15
  • attribution sharealikecitylink
  • 3
  • 15
  • sharealikecitylink mall
  • 3
  • 15
  • mall provided
  • 3
  • 15
  • located httpcommonswikimediaorgwikifilecitylink_malljpg
  • 3
  • 15
  • httpcommonswikimediaorgwikifilecitylink_malljpg license
  • 3
  • 15
Result 16
TitleMarket Segmentation - Marketing Skills Training from MindTools.com
Urlhttps://www.mindtools.com/pages/article/newSTR_84.htm
DescriptionHow can you meet the various needs of different customers? Use market segmentation to deliver products that satisfy all your customers and boost loyalty
Date
Organic Position16
H1Market Segmentation
H2Identifying Your Different Target Markets
Market Segmentation: Definition and Benefits
Market Segmentation: An Example
Types of Market Segmentation
How to Use Market Segmentation
Finding This Article Useful?
Hyper Segmentation
Ratings
H3Geographical
Demographic
Psychographic
Behavioral
Other Types of Market Segmentation
H2WithAnchorsIdentifying Your Different Target Markets
Market Segmentation: Definition and Benefits
Market Segmentation: An Example
Types of Market Segmentation
How to Use Market Segmentation
Finding This Article Useful?
Hyper Segmentation
Ratings
BodyMarket SegmentationIdentifying Your Different Target Markets. © iStockphotoJANIFESTSegmenting your market can radically increase your profits. How do you know your product or service is really hitting the mark with all of your customers? While some of your customers find a new product feature delightful, others may detest it. After all, you may have thousands, even millions of customers and they're all different, with often very different preferences, tastes and thoughts. Market segmentation can help you to divide your customer base into groups of people with similar desires. This means that you can tune your product, services and marketing strategy to meet each segment's specific requirements. In this article, we'll take a deeper look at market segmentation, as well as the benefits of using it, and how you can apply it to your organization. Market Segmentation: Definition and Benefits. Market segmentation is the process of dividing your target market into clearly defined subgroups of consumers who have common charactistics and priorities. When you identify these segments, you can tailor your marketing strategy   so you are better able to meet your customer's wants and needs. This approach enables you to focus your marketing and sales efforts where they're most likely to pay off, thus maximizing your return on investment. Tailoring products and services to market segments can also help to increase customer loyalty and engagement. Even if you sell the same basic product to all customers, you can use market segmentation to develop packages of products or services that are tailored to each group that you identify. In many cases, marketers intuitively understand who their subgroups are. However, a formal analysis is useful to ensure that you don't overlook an important segment – particularly as products develop over time. Market Segmentation: An Example. A fitness center, with thousands of customers, wants to improve it's marketing strategy and product offering. It begins by analyzing it's customer base using market segmentation. The fitness center already knows that its daytime users are mainly parents and retirees. To appeal to parents, it could advertise family-friendly facilities on billboards, leaflets or targeted websites. The fitness center also explores how it can improve its product offering to meet the needs of its parent customer base. One option could be to offer childcare services and fitness activities for older children while their parents work out. It also considers offering a reduced price for customers belonging to this category in the afternoons, to boost attendance during the quieter period of the day. Another customer segment identified by the fitness center is retirees. These customers have entirely different expectations and needs. To meet the needs of this segment, the center considers employing personal trainers who specialize in helping older adults keep fit, or running special exercise classes during the day. These new products could then be advertised on channels that older customers tend to prefer, such as the radio, local newspapers, or targeted websites and social media groups. The fitness center also considers offering lower-priced packages to encourage older people to visit the center outside of peak times. Finally, the fitness center considers how to tailor its offering to its evening crowd. Generally, these include busy professionals, who want to attend outside of working hours. The fitness center could showcase cutting-edge machines that might interest these customers, or it could make more personal trainers available in the evenings to customize workouts. Marketing and promotions could then be sent to customers on targeted channels, such as text, social media, or the web. These activities would significantly boost the fitness center's profits, since the number of people using the clubs tends to increase in the evening. Types of Market Segmentation. Typically, markets are segmented in four main ways: Geographical. This involves tailoring products or marketing activity by customer location. For example by your customers' country, language, region, state, city, or zipcode. Demographic. This is often the most common form of segmentation as it focuses on basic customer demographics, such as age, gender, occupation, income, or ethnicity. Psychographic. This type of data is often harder to collect, as it deals with customer emotions and feelings. However, it can add valuable insight into your customers' motives and preferences. Psychographic segmentation focuses on things like lifestyle, values, hobbies, or interests. Behavioral. This form of market segmentation includes buying behaviour, spending habits, social media interactions, or previous customer feedback. Behaviorial segmentation is often the easiest to explore, as organizations can build up a picture of customers' behavior relatively easily using web analytic tools, which collect data such as page clicks, past orders, usage, and social media interactions. For example, online retail giant Amazon® advertises products to customers based on items that they have purchased in the past. While film streaming service Netflix™ recommends movies to users based on the ones that they have already expressed interest in. Both of these organizations track consumer purchases and activity, and segment their market based on actual behavior. Other Types of Market Segmentation. Although the four categories described above are typically used in market segmentation, you can segment your customers any way you want. Here are some other forms of segmentation you may want to consider: Generational/Life Stage – this expands on the demographic approach, but segments customers into generational groups, such as Baby Boomers, Gen X, Gen Y (millennials), and Gen Z (also known as "zoomers"). You can also split customers up by life stage. For example, whether they're going to college, getting married, having children, or are retired. Technographic – this type of segmentation looks at customers based on their use of technology. For example, whether they are early adopters of a certain piece of tech, majority users, or late adopters. Tech giant Apple®, for instance, often offers a “luxury,” cutting-edge model of its newly-launched products to early adopters for a premium. These particular customers are a highly diverse group, but they are all willing to spend more to have the newest Apple products first. At the same time, Apple continues to sell its previous generation items, which are less expensive and so more appealing to cost-conscious users. Value – some organizations segment their customers according to the value that they can provide. In other words, how much they're likely to spend on products based on their previous purchase history. Firmographic – this type of segmentation is most often used by organizations that target the business-to-business (B2B) market. It works by splitting up business customers into groups depending on shared characteristics, such as by industry, revenue, size, or location. How to Use Market Segmentation. Whatever way you decide to segment your market, it's important to first clarify the common characteristics of each group, as well as the differences between them. Also consider the following questions: Accessible: are you able to reach the subgroup you've identified through cost-effective and practical marketing and distribution channels? Measurable: can you estimate each subgroup's size   easily, so that you can allocate marketing spend accordingly? Substantial: is the segment large, established and stable enough to justify its own marketing activity? Viable: can people within the subgroup afford your product   , and will they see clear and desirable advantages of using it, compared with other products and services? Tip:. Segments that represent small sections of an overall market are known as "niche markets." Organizations may focus on these when their product's price is high, or when the market is especially large. A segment representing only two percent of the total market may be big enough to sustain a good-sized business. Finding This Article Useful? You can learn another 144 strategy skills, like this, by joining the Mind Tools Club. Join the Mind Tools Club Today! Get the Free Newsletter. Learn essential career skills every week, plus get a bonus Essential Strategy Checklist, free! Read our Privacy Policy Hyper Segmentation. Hyper segmentation means breaking down large customer segments into ever smaller sub-groups. It goes beyond niche segmentation, and can even encompass one-to-one marketing. New technologies have enabled companies to collect a vast amount of data on their customers and their buying habits. This has allowed them to gain a a great deal of insight into their customers' personal interactions with their brand, as well as their spending habits and online activity. Big Data   has stimulated this trend, and allowed companies to become more and more effective at personalizing their ads and messaging even to specific, individual customers. Hyper segmentation can have a number of benefits: The ability to offer personalized solutions, products or tailored marketing content to customers. Customers feel seen and heard by the brands they use, which can increase customer loyalty and intimacy   . Companies are better able to match the specific needs and wants of their customers. However, hyper segmentation has a number of limitations, particularly in terms of the ethics and legalities involved in collecting customer data. It can also be very difficult and costly to tailor items and marketing to each individual customer, and so some, more generalized market segmentation is still required. Key Points. Market segmentation is the process of dividing your customer base into different sub-groups that have shared characteristics. This can help you to understand more about your customers' wants and needs, to tailor products and marketing activity to meet these specific needs, and to identify segments of the market that will be most profitable to you. Markets tend to be segmented in four main ways: Geographically – country, region, city, or zipcode. Demographicly – age, gender, occupation, income, or ethnicity. Psychographic4ly – lifestyle, values, hobbies, or interests. Behaviorially – buying behavior, spending habits, social media interactions, or customer feedback. However, customers can segment their customers in any way they want, so that it is most useful to them. This site teaches you the skills you need for a happy and successful career; and this is just one of many tools and resources that you'll find here at Mind Tools. Subscribe to our free newsletter, or join the Mind Tools Club and really supercharge your career! Add this article to My Learning Plan Mark article as Complete Show Ratings Hide Ratings Ratings. Free login needed. Login / Create Log in. Join the Mind Tools Club and Get 4 Free Workbooks! The Mind Tools Club gives you exclusive tips and tools to boost your career - plus a friendly community and support from our career coaches!  Find Out More Join the Mind Tools Club Sign up for our FREE newsletter Comments (13) Over a month ago Michele wrote Hi Dishaskills, Welcome to the club! It's great to see you jumping right in to find the resources you need. We appreciate your feedback on the article. If you need support finding resources, let us know. A member of the Mind Tools Team will be happy to help you. Remember to check out the Forums too. Michele Mind Tolls Team Over a month ago Dishaskills wrote Excellent , very effective & clear Over a month ago Midgie wrote Hi Lillian_Flowers, Great to hear that you appreciate the idea of applying things to your life! There are indeed many parallels. That could be a great discussion in the Club forum area to see how other members apply this to their lives. Why not hop over there and start a discussion to see what everyone has to offer. Midgie Mind Tools Team View All Comments Previous Article Previous Next Article Next Processing. Please wait...
Topics
  • Topic
  • Tf
  • Position
  • customer
  • 46
  • 16
  • market
  • 29
  • 16
  • segmentation
  • 25
  • 16
  • product
  • 20
  • 16
  • segment
  • 17
  • 16
  • marketing
  • 15
  • 16
  • market segmentation
  • 14
  • 16
  • tool
  • 13
  • 16
  • group
  • 11
  • 16
  • club
  • 10
  • 16
  • center
  • 10
  • 16
  • mind
  • 10
  • 16
  • mind tool
  • 9
  • 16
  • fitness
  • 9
  • 16
  • fitness center
  • 8
  • 16
  • tool club
  • 7
  • 16
  • free
  • 7
  • 16
  • service
  • 7
  • 16
  • article
  • 7
  • 16
  • activity
  • 7
  • 16
  • mind tool club
  • 6
  • 16
  • career
  • 6
  • 16
  • organization
  • 6
  • 16
  • customer base
  • 5
  • 16
  • gen
  • 5
  • 16
  • product service
  • 5
  • 16
  • social media
  • 5
  • 16
  • strategy
  • 5
  • 16
  • meet
  • 5
  • 16
  • subgroup
  • 5
  • 16
  • example
  • 5
  • 16
  • offering
  • 5
  • 16
  • social
  • 5
  • 16
  • media
  • 5
  • 16
  • type
  • 5
  • 16
  • data
  • 5
  • 16
  • previou
  • 5
  • 16
  • based
  • 5
  • 16
  • join mind tool
  • 4
  • 16
  • segment customer
  • 4
  • 16
  • join mind
  • 4
  • 16
  • hyper segmentation
  • 4
  • 16
  • great
  • 4
  • 16
  • social media interaction
  • 3
  • 16
  • marketing strategy
  • 3
  • 16
  • customer segment
  • 3
  • 16
  • center consider
  • 3
  • 16
  • marketing activity
  • 3
  • 16
  • spending habit
  • 3
  • 16
  • media interaction
  • 3
  • 16
  • segment market
  • 3
  • 16
  • free newsletter
  • 3
  • 16
  • month ago
  • 3
  • 16
Result 17
TitleMarket segmentation: strategies for success | Emerald Insight
Urlhttps://www.emerald.com/insight/content/doi/10.1108/02634509810244390/full/html
DescriptionMarket segmentation: strategies for success - Author: Sally Dibb
Dateby S Dibb · 1998 · Cited by 285
Organic Position17
H1Market segmentation: strategies for success
H2Abstract
Keywords
Citation
Publisher
We’re listening — tell us what you think
Join us on our journey
H3Something didn’t work…
All feedback is valuable
Member of Emerald Engage?
Platform update page
Questions & More Information
H2WithAnchorsAbstract
Keywords
Citation
Publisher
We’re listening — tell us what you think
Join us on our journey
BodyMarket segmentation: strategies for success Sally Dibb (Senior Lecturer in Marketing, Marketing and Strategic Management Group, Warwick Business School, University of Warwick, Coventry, UK) Marketing Intelligence & Planning ISSN: 0263-4503 Article publication date: 1 December 1998 Downloads 57077 Abstract. Despite the well‐documented benefits which segmentation offers, businesses continue to encounter implementation difficulties. This raises concerns about the cause of these problems and how they might be overcome. These concerns are addressed in this paper in the form of three questions: Is segmentation a good idea? If segmentation is such a good idea, why does it sometimes fail? What can be done to reduce the chance of failure? A mix of published evidence and case examples is used to explore these questions. The paper concludes by suggesting that if marketers are to overcome their segmentation implementation difficulties, they need practical guidance at three stages in the segmentation process. Before the project begins they must understand the role of success factors contributing to a successful result. During the segmentation project the qualities of the emerging segments must be clarified. After segmentation is complete the question of segment attractiveness must be considered. There is currently a gulf between the priorities of academics and practitioners carrying out segmentation. If this is to be bridged, further research is needed to provide guidance on segmentation success factors. Keywords. Consumer behaviour Implementation Market segmentation Marketing planning Target marketing Target markets Citation. Dibb, S. (1998), "Market segmentation: strategies for success", Marketing Intelligence & Planning, Vol. 16 No. 7, pp. 394-406. https://doi.org/10.1108/02634509810244390 Publisher. : MCB UP Ltd Copyright © 1998, MCB UP Limited × Support & Feedback Manage cookies We’re listening — tell us what you think. Something didn’t work…. Report bugs here All feedback is valuable. Please share your general feedback Member of Emerald Engage? You can join in the discussion by joining the community or logging in here.You can also find out more about Emerald Engage. Join us on our journey. Platform update page. Visit emeraldpublishing.com/platformupdate to discover the latest news and updates Questions & More Information. Answers to the most commonly asked questions here
Topics
  • Topic
  • Tf
  • Position
  • segmentation
  • 12
  • 17
  • marketing
  • 6
  • 17
  • question
  • 5
  • 17
  • 1998
  • 4
  • 17
  • market
  • 4
  • 17
  • success
  • 4
  • 17
  • market segmentation
  • 3
  • 17
  • planning
  • 3
  • 17
  • implementation
  • 3
  • 17
  • feedback
  • 3
  • 17
Result 18
TitleWhat is Market Segmentation? | Voxco
Urlhttps://www.voxco.com/blog/what-is-market-segmentation/
DescriptionConducting research studies can be intense! Surveys, analytics, data verification, and monitoring. One of the most rewarding parts of research is when you get to showcase your survey results to your stakeholders
Date
Organic Position18
H1What is Market Segmentation?
H2What makes Market Segmentation important?
Benefits of Market Segmentation
FAQs
Voxco has acquired Actify, an end-to-end data and analytics platform
H3Want to know how to increase your survey response rates?
Role of Big Data in Market Segmentation
Types of Market Segmentation
Demographic Segmentation:
Psychographic Segmentation:
Behavioral Segmentation:
Geographic Segmentation:
Improve Business Focus:
Helps in Product Development:
Effective Marketing Efforts:
Identifying Pain points:
H2WithAnchorsWhat makes Market Segmentation important?
Benefits of Market Segmentation
FAQs
Voxco has acquired Actify, an end-to-end data and analytics platform
BodyWhat is Market Segmentation? Market Research Toolkit Get started with Voxco’s Market Research Toolkit.Market Research trends guide + Online Surveys guide + Agile MArket Research Guide + 5 Market Research Templates  SHARE THE ARTICLE ON Share on facebook Share on twitter Share on linkedin TALK TO AN MR EXPERT Download MR Toolkit The term “Market Segmentation” was coined in 1956 by Wendell R. Smith.Market Segmentation simply refers to the grouping or segmenting of consumers into subgroups. The consumers are grouped together based on the characters they share. The segments most commonly used to define these characteristics are: Demographic, Psychographic, Behavioral, and Geographic Segmentation.Market Segmentation, in the beginning, started with simple Demographic Segmentation. With the growth of the business, the demands and needs of customers also grew. So, market segmentation also became complex with a wide variety of characteristics to divide the audience.The subgroups or segmented groups include current along with potential customers of the company. These people make it possible for the company to succeed. [Free Webinar Recording] Want to know how to increase your survey response rates? . Learn how to meet respondents where they are, drive survey completion while offering a seamless experience, Every Time! Watch Webinar Now! What makes Market Segmentation important? Markets that adopted campaigns based on Market Segmentation noted an increase of 760% in revenue.The purpose of Market Segmentation is to help you create a precise customer segment that suits your brand perfectly. It creates relevant sub-groups, allowing you to personalize your marketing strategy and marketing messages.Segmentation provides you with the knowledge that helps you to ensure your brand that the consumers you are targeting are most suited for your brand. It ensures that your targeted audience will find your brand’s product/service or content valuable and appealing.According to the Global web index, 34% of customers are willing to promote a brand if their content is relevant to the customer’s interest.Marketers use segmentation to give their customers what they want. Personalization and offering relevant content make a brand more appealing to the customers. Customers as well expect to receive tailored messages and products from the brand.Personalization is a smart way of reaching a large audience. Market Segmentation is the stage for it. Understanding your customers – traits, behaviors, needs – and identifying segments to target can help you develop messages best suited for the segment. Personalization means targeting the right audience at the right time and right place. B2B Market Research Trends of 2021Get to know B2B market research trends with our detailed PDFClick Here3Mn Phone Calls | 96 Polls | 2 MonthsSiena College uses Voxco Survey Software for NY Times Upshot Polls 3M Phone Calls | 96 Polls Download Case StudyGet Started with Agile Market ResearchAgile methods can help transform your business, download the guide to start using agile approach for your research. Download NowHow to use Online Surveys for your Research?Use our in-depth online survey guide to create an actionable feedback collection survey process.Click Here Previous Next Role of Big Data in Market Segmentation. Big Data refers to the growing volume and variety of online information. The information is collected and analyzed in a cost-effective way. The analyzed information provides actionable insights that help a company in the decision-making process.In the not-so-distant past, marketers played the guessing game because it was difficult to obtain information about the wants and needs of the audience. However, now with modern marketing segmentation and the possibility of collecting accurate information fast, marketing strategies have become data-driven.According to Domo (computer software company), approx 2.5 quintillion bytes of data are developed every day on a global scale. Internet users are increasing day by day and as a result, the data is widely available to be discovered. It comes as no surprise that marketers are using multiple channels to access these data for their benefit.Big Data helps a brand build a more intimate relationship with the audience. It enables you to offer personalized service by putting a customer at the center of your marketing effort. It offers you clear data that helps you make precise segments. As a result, you develop marketing strategies beneficial for your brand as well as for the audience. Types of Market Segmentation. Free Market Research Toolkit Fill out this form to access 5 market research survey templates + 2 MR guides Assuming that your target market is perfectly organized for you and your business is the biggest mistake you can make.Demographic Segmentation:. Age, gender, education level, occupation, income, etc. falls under Demographic Segmentation.Age is the most common category used to target the audience. Preferences differ between generations and also with the change in stages of life. It is important for marketers to recognize the age range they want to target along with the channels they prefer so that your messages reach them.Psychographic Segmentation:. Values, attitudes, interests, lifestyles, personalities belong to the category of Psychographic Segmentation.A person who lives in a big city will have different requirements, preferences, and lifestyle choices than a person who lives in a small town. Marketers need to note and understand the differences between the two people to develop a marketing message suitable for both.Behavioral Segmentation:. This category focuses on the reasons and the process they undergo to make their purchase decision. It involves a customer’s attitude towards your brand, how they interact with your brand and what they know about your brand.Brand Loyalty is an element in Behavioral Segmentation. Marketers study their customers to provide them what they love about the brand in order to retain their loyal customers.Geographic Segmentation:. As the word suggests, the Geographic Segmentation studies the different interests, preferences customers have across different cities, states, and countries.It is important to know what customers require where they live. You cannot offer swimsuits in the winter. It is mostly sold in the summer and spring seasons. Start creating Descriptive Research Surveys on a Large Scale using Voxco Book a Free Demo Benefits of Market Segmentation. Brand –local or global, small or large scale – needs to identify audiences for their different preference. Knowing what works for a segment of the audience and why can help you understand how you can satisfy their needs.Improve Business Focus:. Market Segmentation helps you dig deeper and understand exactly what you need to focus on and what you need to avoid to attract your customers. Your marketing effort becomes customer-centric and focuses more on their needs.The information you obtain helps you avoid potential mistakes that you may cause otherwise. You can focus your marketing agenda on the factors that will appeal to your audience the most.Helps in Product Development:. Market Segmentation can provide you with data to give you an idea of what product you need to create. The preference, interests, needs, etc. from each segment leaves you with the scope of developing segment-specific products.With clever use of segmentation, you can figure out what products and which features/functions your audience would value and appreciate more.Effective Marketing Efforts:. Knowing ‘what’ your audience wants can also tell you ‘why’ your audience wants it. As you begin to understand and analyze your audience more, you will figure out ‘how’ you can get your message across. Marketing Segmentation can help you in creating a personalized marketing message that appeals to specific segments.You can identify effective marketing efforts that reach your target audience and improve their interaction with your brand.Identifying Pain points:. Understanding your audience for a better marketing effort can also give you information on the pain points. Not every one of your customers have the same preferences similarly, they also don’t have the same pain points. You may find issues that you may have not thought about. As a result, market segmentation can help you clear out any issues your customers may be facing without your knowledge. FAQs. What are the basic types of Market Segmentations? There are four basic categories of Market Segmentation:Demographic SegmentationPsychographic SegmentationBehavioral SegmentationGeographic Segmentation What is the importance of Market Segmentation? Market Segmentation helps a marketer or brand to understand the needs of their customers. The knowledge about their customer’s preference allows the brand to develop better marketing strategies to target the right audience at the right time and place. What is the use of Geographic Segmentation? Geographic Segmentation allows a brand to target their customers on the basis of where they live. Customers are segmented in terms of the state, city, country, region or any other geographical factor required for the marketing purpose. This helps the brand target their products and services better to specific types of audience. 3Mn Phone Calls | 96 Polls | 2 MonthsSiena College uses Voxco Survey Software for NY Times Upshot Polls 3M Phone Calls | 96 Polls Download Case StudyB2B Market Research Trends of 2021Get to know B2B market research trends with our detailed PDFClick HereHow to use Online Surveys for your Research?Use our in-depth online survey guide to create an actionable feedback collection survey process.Click HereGet Started with Agile Market ResearchAgile methods can help transform your business, download the guide to start using agile approach for your research. Download Now Previous Next Read more Concept Testing . Concept Testing SHARE THE ARTICLE ON Share on facebook Share on twitter Share on linked ... Panel Management Market Research . Panel Management Market Research SHARE THE ARTICLE ON Share on facebook Share on twitter Share on linkedin Table of Contents What is Panel Mana ... Correlation vs Causation . Correlation vs Causation The Ultimate Guide to Cluster Sampling Get a step-by-step guide for choosing the correct representative sample for survey research. ... Quantitative Survey Questions . Quantitative Survey Questions SHARE THE ARTICLE ON Share on facebook Share on twitter Share on linkedin Table of Contents What are Quantitative ... What are Scales of measurement? . What are Scales of measurement? Try a free Voxco Online sample survey! Unlock your Sample Survey SHARE THE ARTICLE ON ... Voice of customer vs customer experience . Voice of customer vs customer experience SHARE THE ARTICLE ON Share on facebook Share on twitter ... A Detailed Guide on Control Variables: What, Why, and How . A Detailed Guide on Control Variables: What, Why, and How SHARE THE ARTICLE ON Share on facebook Share on twitter Share on linkedin ... An overview of research methods : Types , advantages , disadvantages . .elementor-element-80a691e{display:none !important} An overview of research methods : Types , advantages , disadvantages Transform ... Shopping Basket We use cookies in our website to give you the best browsing experience and to tailor advertising. By continuing to use our website, you give us consent to the use of cookies. Read More Accept Decline Modify I consent to the use of following cookies: Necessary Marketing Analytics Preferences Unclassified Cookie Declaration About Cookies Necessary (3) Marketing (4) Analytics (10) Preferences (1) Unclassified (10) Necessary cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies. Name Domain Purpose Expiry Type hubspotutk voxco.com HubSpot functional cookie. 1 year HTTP lhc_dir_locale amplifyreach.com --- 52 years --- lhc_dirclass amplifyreach.com --- 52 years --- Marketing cookies are used to track visitors across websites. The intention is to display ads that are relevant and engaging for the individual user and thereby more valuable for publishers and third party advertisers. Name Domain Purpose Expiry Type _fbp voxco.com Facebook Pixel advertising first-party cookie 3 months HTTP __hstc voxco.com Hubspot marketing platform cookie. 1 year HTTP __hssrc voxco.com Hubspot marketing platform cookie. 52 years HTTP __hssc voxco.com Hubspot marketing platform cookie. Session HTTP Analytics cookies help website owners to understand how visitors interact with websites by collecting and reporting information anonymously. Name Domain Purpose Expiry Type _gid voxco.com Google Universal Analytics short-time unique user tracking identifier. 1 days HTTP MUID bing.com Microsoft User Identifier tracking cookie used by Bing Ads. 1 year HTTP MR bat.bing.com Microsoft User Identifier tracking cookie used by Bing Ads. 7 days HTTP IDE doubleclick.net Google advertising cookie used for user tracking and ad targeting purposes. 2 years HTTP _vwo_uuid_v2 voxco.com Generic Visual Website Optimizer (VWO) user tracking cookie. 1 year HTTP _vis_opt_s voxco.com Generic Visual Website Optimizer (VWO) user tracking cookie that detects if the user is new or returning to a particular campaign. 3 months HTTP _vis_opt_test_cookie voxco.com A session (temporary) cookie used by Generic Visual Website Optimizer (VWO) to detect if the cookies are enabled on the browser of the user or not. 52 years HTTP _ga voxco.com Google Universal Analytics long-time unique user tracking identifier. 2 years HTTP _uetsid voxco.com Microsoft Bing Ads Universal Event Tracking (UET) tracking cookie. 1 days HTTP vuid vimeo.com Vimeo tracking cookie 2 years HTTP Preference cookies enable a website to remember information that changes the way the website behaves or looks, like your preferred language or the region that you are in. Name Domain Purpose Expiry Type __cf_bm hubspot.com Generic CloudFlare functional cookie. Session HTTP Unclassified cookies are cookies that we are in the process of classifying, together with the providers of individual cookies. Name Domain Purpose Expiry Type _gcl_au voxco.com --- 3 months --- _gat_gtag_UA_3262734_1 voxco.com --- Session --- _clck voxco.com --- 1 year --- _ga_HNFQQ528PZ voxco.com --- 2 years --- _clsk voxco.com --- 1 days --- visitor_id18452 pardot.com --- 10 years --- visitor_id18452-hash pardot.com --- 10 years --- lpv18452 pi.pardot.com --- Session --- lhc_per voxco.com --- 6 months --- _uetvid voxco.com --- 1 year --- Cookies are small text files that can be used by websites to make a user's experience more efficient. The law states that we can store cookies on your device if they are strictly necessary for the operation of this site. For all other types of cookies we need your permission. This site uses different types of cookies. Some cookies are placed by third party services that appear on our pages. Cookie Settings English French German English Voxco has acquired Actify, an end-to-end data and analytics platform. Read More
Topics
  • Topic
  • Tf
  • Position
  • market
  • 36
  • 18
  • segmentation
  • 32
  • 18
  • customer
  • 29
  • 18
  • year
  • 26
  • 18
  • marketing
  • 25
  • 18
  • share
  • 25
  • 18
  • voxcocom
  • 24
  • 18
  • cookie
  • 22
  • 18
  • audience
  • 22
  • 18
  • cooky
  • 19
  • 18
  • research
  • 19
  • 18
  • survey
  • 18
  • 18
  • brand
  • 17
  • 18
  • market segmentation
  • 16
  • 18
  • market research
  • 15
  • 18
  • website
  • 14
  • 18
  • guide
  • 13
  • 18
  • preference
  • 12
  • 18
  • user
  • 12
  • 18
  • type
  • 12
  • 18
  • day
  • 11
  • 18
  • data
  • 10
  • 18
  • tracking
  • 10
  • 18
  • tracking cookie
  • 9
  • 18
  • information
  • 9
  • 18
  • segment
  • 8
  • 18
  • target
  • 8
  • 18
  • share article
  • 7
  • 18
  • article
  • 7
  • 18
  • facebook
  • 7
  • 18
  • download
  • 7
  • 18
  • time
  • 7
  • 18
  • purpose
  • 7
  • 18
  • help
  • 7
  • 18
  • share article share
  • 6
  • 18
  • article share facebook
  • 6
  • 18
  • share facebook share
  • 6
  • 18
  • facebook share twitter
  • 6
  • 18
  • 96 poll
  • 6
  • 18
  • article share
  • 6
  • 18
  • share facebook
  • 6
  • 18
  • facebook share
  • 6
  • 18
  • share twitter
  • 6
  • 18
  • share twitter share
  • 5
  • 18
  • domain purpose expiry
  • 5
  • 18
  • purpose expiry type
  • 5
  • 18
  • bing ad
  • 5
  • 18
  • research trend
  • 5
  • 18
  • online survey
  • 5
  • 18
  • twitter share
  • 5
  • 18
  • marketing effort
  • 5
  • 18
  • domain purpose
  • 5
  • 18
  • purpose expiry
  • 5
  • 18
  • expiry type
  • 5
  • 18
  • user tracking
  • 5
  • 18
  • twitter share linkedin
  • 4
  • 18
  • market research trend
  • 4
  • 18
  • phone call 96
  • 4
  • 18
  • call 96 poll
  • 4
  • 18
  • cookie year
  • 4
  • 18
  • platform cookie
  • 4
  • 18
  • share linkedin
  • 4
  • 18
  • marketing strategy
  • 4
  • 18
  • phone call
  • 4
  • 18
  • call 96
  • 4
  • 18
  • voxcocom hubspot
  • 4
  • 18
  • 52 year
  • 4
  • 18
  • month
  • 4
  • 18
  • online survey guide
  • 3
  • 18
  • b2b market research
  • 3
  • 18
  • voxcocom hubspot marketing
  • 3
  • 18
  • hubspot marketing platform
  • 3
  • 18
  • marketing platform cookie
  • 3
  • 18
  • generic visual website
  • 3
  • 18
  • visual website optimizer
  • 3
  • 18
  • website optimizer vwo
  • 3
  • 18
  • voxcocom year
  • 3
  • 18
  • survey guide
  • 3
  • 18
  • agile market
  • 3
  • 18
  • customer customer
  • 3
  • 18
  • b2b market
  • 3
  • 18
  • develop marketing
  • 3
  • 18
  • target audience
  • 3
  • 18
  • geographic segmentation
  • 3
  • 18
  • pain point
  • 3
  • 18
  • sample survey
  • 3
  • 18
  • cooky website
  • 3
  • 18
  • hubspot marketing
  • 3
  • 18
  • marketing platform
  • 3
  • 18
  • generic visual
  • 3
  • 18
  • visual website
  • 3
  • 18
  • website optimizer
  • 3
  • 18
  • optimizer vwo
  • 3
  • 18
Result 19
TitleWhat is Market Segmentation? From Demographic to Time to Psychographic Segmentation: A Review Market Segmentation Strategies by Jerry W. Thomas
Urlhttps://www.decisionanalyst.com/whitepapers/marketsegmentation/
DescriptionThe purpose of segmentation is the concentration of marketing energy on a smaller group or segment. Segmentation can take many forms, more than just psychographic, or demographic segmentation. There is also Geographic, Time, Distribution, Media, and Occasion-Based segmentation methods
Date
Organic Position19
H1
H2
H3Market Segmentation by Jerry W. Thomas
About the Author
Segmentation Series Videos
Related Materials
1-Page Cheet Sheet
Servics
H2WithAnchors
Body      Contact Us: 1-817-640-6166 Client Portal Login Menu Home About Us Company History Executive Team Industry Experience Automotive Banking, Finance, and Insurance Business-to-Business Consumer Packaged Goods (FMCG) Governmental Agencies Home Improvement & Trade Research Pharma, Medical, Health, and Wellness Restaurants Retailing Social Responsibility/Social Causes Technology Sector Client List Quality Assurance Data Security Press Room Quantitative Research Advertising Research Advertising Testing Systems Advertising Tracking Research Awareness Trial Usage (ATUs) Brand Consulting Brand Equity Monitoring Category Management Community Surveys Education Survey Research Economic Development Research Concept Testing Customer Experience Optimization Customer Loyalty Simulator Data Management Services Mail Surveys Data Entry Services Multilingual Coding Cross-Tabulation Services Employee Research Employee Satisfaction Research Employee Retention Global Research Market Intelligence American Home Comfort Study Economic Index Marketing Consulting Marketing Strategy New Product Research Brand Name Research DecisionSystems Technology Forecasting Online Research Global Internet Panels Online Communities Panel Management Private Online Research Panels Packaging Research Simulated Shopping with Shelf Sets Custom/Ad Hoc Packaging Research Product Testing Optima Product Testing Custom Product Testing Product Quality Monitoring Sensory Research Systems Promotion Testing Shopping Research Strategy Research Tracking Research Win-Loss Research Qualitative Research Meet Our Moderators Digital Ethnography In the Moment Research Large-Scale Qualitative Online Qualitative Qualitative Research (Focus Groups) Unconventional Qualitative Methods Qualitative Research Library Advanced Analytics Analytical Consulting Choice Modeling Conceptor Volumetric Forecasting Demand Forecasting Economic Analysis Economic Feasibility Analysis Economic Impact Analysis Econometric Modeling Marketing Science Marketing Mix Modeling Marketing Segmentation Market Segmentation Methods Operations Research Predictive Analytics Predictive Analytics & Marketing Research Text Mining Pricing Research Sales Forecasting and Sales Modeling Spatial Analytics Consulting Acquisition Reviews Asset Optimization GIS mapping Location Analysis Shopping Center Repositioning Innovation & Ideation Library Blog Jerry W. Thomas Blogs Audrey Guinn Blogs Bonnie Janzen Blogs Cari Peek Blogs Clay Dethloff Blogs Elizabeth Horn Blogs Felicia Rogers Blogs Heather Kluter Blogs John Colias Blogs Julie Trujillo Blogs Lesley Johnson Blogs Mike Humphrey Blogs Sara Sutton Blogs Tom Allen Blogs Blog Archives 2017-2019 Brochures Case Histories Consumer Reactions to COVID-19 Covid Consumer Mindset Segmentation Download Our Complimentary Report Economic Indices Economic Index Background Email Newsletter Free Software Glossary Press Room Qualitative Research Library Videos - General Marketing Research Videos - Leadership Strategy Interviews Videos - Market Segmentation Videos - Media Mix Minute Videos - Strategy Series Webinars - Insider Series White Papers Contact Research Advice Employment Tweet Market Segmentation by Jerry W. Thomas. When the term “market segmentation” is used, most of us immediately think of psychographics, lifestyles, values, behaviors, and multivariate cluster analysis routines. Market segmentation is a much broader concept, however, and it pervades the practice of business throughout the world.   What is market segmentation? At its most basic level, the term “market segmentation” refers to subdividing a market along some commonality, similarity, or kinship. That is, the members of a market segment share something in common. The purpose of segmentation is the concentration of marketing energy and force on the subdivision (or the market segment) to gain a competitive advantage within the segment. It’s analogous to the military principle of “concentration of force” to overwhelm an enemy. Concentration of marketing energy (or force) is the essence of all marketing strategy, and market segmentation is the conceptual tool to help achieve this focus. Before discussing psychographic or lifestyle segmentation (which is what most of us mean when using the term “segmentation”), let’s review other types of market segmentation. Our focus is on consumer markets rather than business markets, but most of the following concepts also apply to B2B. Geographic Segmentation This is perhaps the most common form of market segmentation, wherein companies segment the market by attacking a restricted geographic area. For example, corporations may choose to market their brands in certain countries, but not in others. A brand could be sold only in one market, one state, or one region of the United States. Many restaurant chains focus on a limited geographic area to achieve concentration of force. Regional differences in consumer preferences exist, and this often provides a basis for geographic specialization. For example, a company might choose to market its redeye gravy only in the southeastern U.S. Likewise, a picante sauce might concentrate its distribution and advertising in the Southwest. A chainsaw company might only market its products in areas with forests. Geographic segmentation can take many forms (urban versus rural, north versus south, seacoasts versus interior, warm areas versus cold, high-humidity areas versus dry areas, high-elevation versus low-levation areas, and so on). These examples also reveal that geographic segmentation is sometimes a surrogate for (or a means to) other types of segmentation. Distribution Segmentation Different markets can be reached through different channels of distribution. For example, a company might segment the “tick and flea collar” market by selling the product to supermarkets under one brand name, to mass merchandisers under another brand name, to pet stores under another brand name, and to veterinarians under yet another brand name. This type of distributional segmentation is common, especially among small companies that grant each channel a unique brand to gain distribution within that channel. Other examples of distributional segmentation would be an upscale line of clothing sold only in expensive department stores, or a luxury hair shampoo sold only through upscale beauty salons. Media Segmentation While not common, media segmentation is sometimes a possibility. It is based on the fact that different media tend to reach different audiences. If a brand pours all of its budget into one media, it can possibly dominate the segment of the market that listens to that radio station or reads that magazine. Media segmentation is most often practiced by companies that have some control over the media and can somehow discourage competitors from using that media. Price Segmentation Price segmentation is common and widely practiced. Variation in household incomes creates an opportunity for segmenting some markets along a price dimension. If personal incomes range from low to high, the reasoning goes, then a company should offer some cheap products, some medium-priced ones, and some expensive ones. This type of price segmentation is well illustrated by the range of automotive brands marketed by General Motors, historically. Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac varied in price (and status) along a clearly defined spectrum to appeal to successively higher income groups. Demographic Segmentation Gender, age, income, housing type, and education level are common demographic variables. Some brands are targeted only to women, others only to men. Music streaming services tend to be targeted to the young, while hearing aids are targeted to the elderly. Education levels often define market segments. For instance, private elementary schools might define their target market as highly educated households containing women of childbearing age. Demographic segmentation almost always plays some role in a segmentation strategy. Time Segmentation Time segmentation is less common, but can be highly effective. Some stores stay open later than others, or stay open on weekends. Some products are sold only at certain times of the year (e.g., Christmas cards, fireworks). Chili is marketed more aggressively in the fall, with the onset of cooler weather. Football is played in the fall, basketball in the winter and spring, and baseball in the spring and summer (or at least this used to be the pattern). The Olympics come along every four years. Department stores sometimes schedule midnight promotional events. The time dimension can be an interesting basis for segmentation. Occasion-Based Segmentation People tend to behave differently, and think differently, at different times or occasions. For example, dietary habits and preferences vary by occasion: breakfast is different from dinner; eating out on a Friday night is different from grabbing lunch during the week; Thanksgiving dinner is different from most other dinners. These types of differences can be the basis for segmenting a market. If the goal is to develop new product development templates for a restaurant chain, then occasion-based segmentation might be a good solution. If the goal, however, is to develop the strategic positioning and advertising messages for a new smartphone or a new car, then occasion-based segmentation would not be applicable. In these cases, the goal is one optimal solution, and the occasions do not matter. Markets can be also segmented by hobbies, by political affiliation, by religion, by special interest groups, by sports team loyalties, by university attended, and by hundreds of other variables. You are only limited by your marketing imagination. Psychographic or Lifestyle Segmentation Psychographic (or lifestyle) segmentation is based upon multivariate analyses of consumer attitudes, values, behaviors, emotions, perceptions, beliefs, needs, benefits, wishes, and interests. Psychographic segmentation is a legitimate way to segment a market, if we can identify the proper segmentation variables (or lifestyle statements, words, pictures, etc.). Qualitative research techniques (focus groups, depth interviews, ethnography) become invaluable at this stage. Qualitative research provides the insight, the conceptual knowledge, and the consumer’s exact language necessary to design the segmentation questionnaire. Typically, verbatim comments from consumers are used to build batteries of psychographic or lifestyle statements (these two terms are used interchangeably). A large representative sample of consumers (generally, 1,000 or more) are then asked about the degree to which they agree or disagree with each statement. For example, if you were designing a market segmentation questionnaire for an airline, you might conduct a series of depth interviews to help design the questionnaire. You probably would include a behavioral section (frequency of flying, how purchase tickets, who travel with, cities flown to, where sit, airlines flown, money spent on airline tickets, etc.). You would include a major section on attitudes toward air travel (motivations for air travel, fears related to air travel, positive emotions of flying, attitudes about airline employees, checking luggage, buying tickets, and so forth). You would also want to include a section on perceptions of the different airlines; that is, their “brand images.” You could go further and add a section on media consumption or personal values as well. It is at this point that you realize the questionnaire is too long, and you have to make some hard decisions about what questions or statements to include. The method of data collection is very important, because the questionnaire is so long (often 45 to 60 minutes in length). The telephone is not recommended for segmentation studies because of questionnaire length. Moreover, the various rating scales and attitudinal statements are difficult to communicate by phone, and the resulting phone data tends to be “insensitive” and rife with “noise.” In-person interviews, online surveys (or even mail surveys) are much better. Rating scales and attitudinal statements can be seen and fully comprehended by respondents. Seeing is much better than hearing, and it produces more accurate answers. Online surveys are especially valuable for segmentation studies, since respondents can take the survey at a time of their own choosing when they can give it their full, undivided attention. A mail survey offers some of the same advantages, but without the questionnaire controls, checks, and safeguards built into an online survey. Analytical Methods Most segmentation analyses are based upon various types of “cluster analysis,” which is a set of well-defined statistical procedures that group people according to the proximity of their ratings. Unfortunately, cluster analysis (regardless of its many types and forms) has inherent limitations and seldom yields coherent market segments. Cluster analysis routines tend to ignore the pattern of respondent ratings and rely primarily upon the proximity of respondent ratings. Too often this leads to clusters, or market segments, that don’t seem to make much sense when cross-tabulated against the original segmentation variables. Another limitation of clustering approaches is that all statements are treated as equal, whereas, in truth, some statements might be much more important than others in explaining consumer behavior in a particular product category. A better way to achieve a good psychographic segmentation is to first identify the statements that are more important (i.e., the statements that tend to explain or cause specific consumer behaviors). Correlation analysis and regression can be used for this purpose. Factor analysis is also a powerful technique to identify the statements and groups of statements that account for much of the variance in the attitudinal data set. Directly, and indirectly, these techniques can help you identify the most important statements (i.e., attitudes, perceptions, values). Then these statements become the inputs to the final segmentation analysis. Many different methods can be used to “cluster” or group the statements at this point. The final step is to attach a segment code to each market segment identified and then cross-tab all of the questionnaire variables by the segments. You must then study the segments, and the attitudes/statements that make up each segment, to make sure they make sense and hang together. If the segmentation results don’t make sense, then you have to go back, change some of your assumptions or methods, rerun the analysis, and repeat the cross-tab exercise to apply the “common sense” validity check. Common Mistakes Segmentation studies tend to be large and complicated, so it’s easy for errors and mistakes to be made. Some of the most common mistakes: Segmenting a segment. For example, someone might want to segment the market for widgets among 18- to 24-year-olds who live in Vermont and buy brand XYZ. As is evident, the client is asking that a tiny sliver of the market be segmented. True, this tiny sliver can be segmented, but rarely are the resulting segments of any value, because they are just too small. General rule: segment the whole market, including all age groups. The market should be broadly defined for a segmentation analysis to be most effective. In other words, don’t preordain the results by sampling restrictions. Overlooking the “universals.” Many attitudinal statements in the questionnaire will not show up in the final segments, because they tend to be the same across all segments. Statements that everyone agrees with or everyone disagrees with (we call them “universals”) cannot explain much in the multivariate analyses. Variables have to move up and down for the multivariate analysis to work. The highest-rated variables, and the lowest-rated, are likely to fall out of the multivariate equations. However, you should always look at these universal statements. Any one of them might be the basis for a positioning or a strategy that would appeal to everyone. If you find something unique that appeals to everyone, the heck with segmentation. Go for the whole hog. Creating too many segments. There is a practical limit to the size of segments that companies can effectively target. If you create more than four or five market segments, you run the risk that the resulting segments will be too small to target, at least by mass media. This is not always true, but it is a good rule of thumb. Targeting all segments. So you have carefully subdivided your target market into five mutually exclusive psychographic segments, and your boss tells you to develop a marketing plan to attack each segment. If all of your marketing is direct mail, and you can identify the addresses that belong to each segment, then you can attack all segments (assuming your product is relevant to all segments). But if you use broadcast media in marketing your product, it is very difficult to target multiple segments because of media “spillover.” What you say to one segment will be muddled and confused by the different messages targeted to other segments. Confusing the results. Segmentation studies are large and complicated, with enormous amounts of data. It is easy to get lost in this treasure trove of answers and come up with confusing and baffling results. Overlooking the basics. The dazzle and glitter of the advanced, rocket-science multivariate analyses attract everyone’s attention. No one ever opens up the cross-tabs and looks at the answers to the hundreds of questions asked. Often, hidden in plain view in the cross-tabs are tremendous findings that could form the basis for new or improved marketing strategies, advertising campaigns, or new products. Rarely does anyone analyze this basic data, however. Targeting people instead of dollars. A market segment might represent a large percentage of the population, but a small part of the market. Always look at the dollar potential of market segments, not just the number of people in the segments. Nonmutually Exclusive Segments Virtually all segmentation work, historically, has been based upon the assumption of mutually exclusive market segments. The mutually exclusive model, however, does not always apply to psychographic or lifestyle segmentation (since most of us hold many overlapping and/or conflicting beliefs and attitudes). Therefore, it is wise to develop two distinctly different segmentation solutions: one based upon mutually exclusive segments and one based upon overlapping segments. Both of these segmentation “solutions” should be cross-tabulated by the original questionnaire variables to identify which type of solution yields the most meaningful (and actionable) market segments. Psychographic Summary The concept of market segmentation is sound. It’s a way to apply greater marketing energy or force to a subset of the market. A great deal of money is wasted on psychographic segmentations that never lead to any marketing actions. If you segment the market by psychographics, there are several essential uses of the segmentation: first, target your brand to the largest segment with relevant brand fit (or even target two closely related segments) by media advertising and message. That is, the advertising message is the way to reach the psychographic segment (rarely can a psychographic segment be defined by demographics or geography). Second, segmentation can provide the guiderails for brand positioning. That is, positioning assumes, or takes place in relation to, a target market segment; you are positioning your brand in relation to a market segment. Third, the segmentation can define opportunities for new products targeted to each psychographic segment. That is, the market segments can be a template for new product development. For example, if you find that 15% of the U.S. population belongs to a “safety first” segment when it comes to buying cars, then you can design and build the safest car in the world to target this segment. So psychographic segmentation’s greatest value lies in positioning, targeting via advertising message, and defining new product opportunities. Direct Marketing Segmentation In categories where direct marketing (targeted direct mail, for example) is the norm, the number of usable market segments can be large, as many as 10 to 15 segments (in contrast, products supported by broad-reach media advertising can only target a limited number of segments, rarely more than 2 or 3). Direct marketing (especially direct mail) can target 10 to 15 different market segments with different positionings and messages. So, segmentation applied to direct marketing categories follows a different set of rules. The challenge is linking up household characteristics and variables that reside in secondary population databases (let’s use Experian data as an example) with the survey-based segmentation data. Typically, the segmentation survey records would have Experian-household variables appended. Then, once the segmentation is complete, the appended Experian household data can be used to build predictive models to identify market segment membership. These models (called “typing tools”) can then be applied to U.S. household databases to identify the market segment each household falls into. Direct mail advertising can then be precisely targeted to each market segment. Typing Tools The “typing tool” is a predictive model to help determine the market segment that a household or individual belongs to. In the instance of a mass market attacked by broad-reach media advertising, the typing tool would be based on a set of 4 to 10 short questions that could be used in surveys or CRM interactions to categorize consumers into applicable market segments. In direct marketing categories, the typing tool would be based on variables in the Experian (to continue the example) database, such as household income, value of home, presence of swimming pool, size of yard, number of cars owned, and so forth, to predict market segment memberships for each household in the database. Artificial Intelligence and Machine Learning Most segmentations are based on clustering techniques, factor analyses, and choice modeling experiments. Much experimental and exploratory work is in progress to apply artificial intelligence and machine learning techniques to improve segmentation outcomes. Early results are promising, but much work lies ahead before these newer methods can be fully trusted. Final Thoughts Segmentation is one of the most powerful concepts in the marketing toolbox. It’s a chance to apply maximum pressure by concentrating marketing and advertising activities on a segment of the market to change human behavior; for example, persuade people to accept a new product, buy brand A over brand B, accept new taxes to protect the environment, or elect a new member of Congress. Segmentation permits intelligent focusing and concentration of marketing effort to maximize returns on marketing investments. Go forth and segment. About the Author. Jerry W. Thomas ([email protected]) is President/CEO of Dallas-Fort Worth based Decision Analyst. He may be reached at 1-800-262-5974 or 1-817-640-6166. Copyright © 2019 by Decision Analyst, Inc. This article may not be copied, published, or used in any way without written permission of Decision Analyst.   Segmentation Series Videos. View More Videos in the Segmentation Series Related Materials. “Segmentation Studies Never Pay Off” Overcoming The Myth We Need to Motivate Those Segments Comparison of Segmentation Approaches Multidimensional Segmentation 1-Page Cheet Sheet. Download Market Segmentation Types Cheat Sheet Servics. Market Segmentation Services
Topics
  • Topic
  • Tf
  • Position
  • segmentation
  • 82
  • 19
  • segment
  • 67
  • 19
  • market
  • 63
  • 19
  • research
  • 32
  • 19
  • marketing
  • 26
  • 19
  • market segment
  • 22
  • 19
  • brand
  • 22
  • 19
  • product
  • 19
  • 19
  • statement
  • 18
  • 19
  • blog
  • 16
  • 19
  • psychographic
  • 16
  • 19
  • media
  • 15
  • 19
  • market segmentation
  • 14
  • 19
  • analysi
  • 14
  • 19
  • based
  • 14
  • 19
  • consumer
  • 13
  • 19
  • advertising
  • 13
  • 19
  • example
  • 13
  • 19
  • survey
  • 12
  • 19
  • direct
  • 11
  • 19
  • data
  • 11
  • 19
  • variable
  • 11
  • 19
  • target
  • 11
  • 19
  • common
  • 10
  • 19
  • type
  • 10
  • 19
  • household
  • 10
  • 19
  • questionnaire
  • 10
  • 19
  • company
  • 9
  • 19
  • qualitative
  • 9
  • 19
  • segment market
  • 8
  • 19
  • strategy
  • 8
  • 19
  • group
  • 8
  • 19
  • identify
  • 8
  • 19
  • direct marketing
  • 6
  • 19
  • qualitative research
  • 6
  • 19
  • psychographic lifestyle
  • 6
  • 19
  • psychographic segmentation
  • 5
  • 19
  • segmentation common
  • 5
  • 19
  • segmentation study
  • 5
  • 19
  • typing tool
  • 5
  • 19
  • psychographic lifestyle segmentation
  • 4
  • 19
  • cluster analysi
  • 4
  • 19
  • lifestyle segmentation
  • 4
  • 19
  • based segmentation
  • 4
  • 19
  • advertising message
  • 4
  • 19
  • cross tab
  • 4
  • 19
  • mutually exclusive
  • 4
  • 19
  • psychographic segment
  • 4
  • 19
  • direct mail
  • 4
  • 19
  • jerry thoma
  • 3
  • 19
  • marketing energy force
  • 3
  • 19
  • occasion based segmentation
  • 3
  • 19
  • mail survey
  • 3
  • 19
  • economic index
  • 3
  • 19
  • marketing strategy
  • 3
  • 19
  • product testing
  • 3
  • 19
  • jerry
  • 3
  • 19
  • thoma
  • 3
  • 19
  • concentration marketing
  • 3
  • 19
  • marketing energy
  • 3
  • 19
  • energy force
  • 3
  • 19
  • geographic segmentation
  • 3
  • 19
  • media segmentation
  • 3
  • 19
  • price segmentation
  • 3
  • 19
  • target market
  • 3
  • 19
  • occasion based
  • 3
  • 19
  • multivariate analysis
  • 3
  • 19
  • air travel
  • 3
  • 19
  • attitudinal statement
  • 3
  • 19
  • online survey
  • 3
  • 19
  • media advertising
  • 3
  • 19
  • decision analyst
  • 3
  • 19
Result 20
TitleMarket Segmentation: How to Do It and How to Profit from It
Urlhttps://www.amazon.com/Market-Segmentation-How-Do-Profit/dp/1118432673
DescriptionNothing in business works unless markets are correctly defined, mapped, quantified and segmented. Why else have hundreds of billions of dollars been wasted on ...
Date
Organic Position20
H1
H2
H3
H2WithAnchors
Body
Topics
  • Topic
  • Tf
  • Position
Result 21
TitleWhat is market segmentation? | BigCommerce
Urlhttps://www.bigcommerce.com/ecommerce-answers/what-market-segmentation/
DescriptionLearn how BigCommerce can fuel your business with all the capabilities of enterprise ecommerce—without the cost or complexity
Date
Organic Position21
H1What is market segmentation?
H2
H3Ready to see what BigCommerce can do for your business?
H2WithAnchors
BodyWhat is market segmentation?Definition: Market segmentation is the process of evaluating and categorizing customer groups to enable targeted marketing efforts. Businesses of every size undergo market segmentation to better understand and satisfy the needs of different consumers, also called target demographics, to improve marketing efforts and offer the best products. Mass marketing, conversely, treats the entire market as homogenous. The business offers the same marketing mix to everyone, scaling efforts and saving costs through a single mass production, distribution and communication strategy. Mass marketing was a much more common business practice before consumer data became more widely accessible. The marketplace today is fragmented by a plethora of choices that grows by the day. People have more options for goods and services than ever before, and they've become accustomed to personalizing products that cater to their individual tastes. Streaming music services and cellphone apps are a great example of this. As this trend toward "product personalization" grows, market segmentation is an indispensable tool for creating brand awareness and loyalty. Businesses must use data to focus on narrower slices of the marketplace, identifying shared attributes in a group of people and using it to reach them on a more personal, and hopefully profitable, level. Four common ways to segment a target market. Customers can be segmented by many values or criteria. The following four categories include hundreds of various dimensions which can be used to pinpoint specific customer groups. Geographic: People in different places often have widely varying needs and shopping patterns. Segmenting by country, region, state, and city — depending on the scope of a business — can inform a business' marketing efforts. For example, if most customers are from Southern California, local advertisements may generate positive ROI. Demographic: Socio-economic factors also play a role in how people behave as consumers. Differences in gender, age, income, education level and race often influence buyer behavior.Psychographic: People have different values and beliefs, which can often influence their purchasing decisions. Values are often influenced by - but not limited to - geography, lifestyle, age and religious beliefs. Behavior: Not every consumer buys the same way. Some people research their options carefully for months, while others are impulse buyers who are comfortable making snap decisions. Some people prefer brick-and-mortar stores where they can touch the product before buying, and others prefer the convenience of shopping online. Knowing how well your marketing will match the target group's behavior will have a big impact on your success.Requirements of a market segment. In order for a market segment to be useful, it must have measurable characteristics. If a business owner wants to effectively target a specific market segment, he or she needs to carefully evaluate those characteristics to ensure money is not wasted on trying to reach the wrong people. Definition - The attributes of the market segment must be clear and well defined. It's important to differentiate one segment from the next to avoid any overlap in marketing activities that cause inefficiencies and waste. People in one segment should also respond differently than another when presented with the same marketing mix. If the two respond similarly then the definition is blurred, suggesting that they are not so different after all.Accessibility - The segment must be reachable. The business owner needs to consider the unique media habits of the target customer and a communication strategy that could influence them. Geography and distribution channels also need to be considered. A segment of people who live in states with no internet sales tax may be more valuable to an ecommerce retailer, for instance.Size and applicability - It's important to measure the size of the market segment and evaluate whether the sales potential exceeds the cost of marketing to it. The marketer should also consider whether this group is likely to buy the product and if it has the financial resources to do so.Action - this raises the question of whether the business can actually satisfy the needs of the market segment. A segment may look like an attractive target, but if the business lacks the capacity to fulfill what the market demands, it's best to choose another area to focus on.BigCommerce helps growing businesses, enterprise brands, and everything in-between sell more online.Learn about BigCommerce EnterpriseSee our best-in-class featuresVisit our ecommerce blogRead ecommerce articles Start your free trialHigh-volume or established business? Request a demoReady to see what BigCommerce can do for your business?Start your free trialHigh-volume or established business? Request a demo
Topics
  • Topic
  • Tf
  • Position
  • market
  • 13
  • 21
  • business
  • 13
  • 21
  • segment
  • 12
  • 21
  • marketing
  • 10
  • 21
  • person
  • 10
  • 21
  • market segment
  • 6
  • 21
  • target
  • 6
  • 21
  • customer
  • 5
  • 21
  • group
  • 5
  • 21
  • product
  • 5
  • 21
  • effort
  • 4
  • 21
  • consumer
  • 4
  • 21
  • market segmentation
  • 3
  • 21
  • marketing effort
  • 3
  • 21
  • segmentation
  • 3
  • 21
  • mass
  • 3
  • 21
  • value
  • 3
  • 21
  • influence
  • 3
  • 21
  • ecommerce
  • 3
  • 21
Result 22
TitleUnderstanding Market Segmentation: Benefits, Importance, and Use Cases | Coresignal
Urlhttps://coresignal.com/blog/understanding-market-segmentation/
DescriptionMarket segmentation refers to dividing the target market into clusters or subsets based on different criteria, helping you understand consumers
DateOct 11, 2021
Organic Position22
H1Understanding Market Segmentation: Benefits, Importance, and Use Cases
H2What is market segmentation?
What are examples of market segmentation?
How are markets segmented?
Why is market segmentation important?
The benefits of market segmentation with alternative data
Free data sample
Common market segmentation mistakes to avoid
How to get started with segmentation
Conclusion
H3Demographic characteristics, including sex, age, occupation
Behavioral aspects, such as attitudes, knowledge, and usage patterns
Geographic region
Psychographic characteristics or opinions, interests, and activities
Other criteria
Define your market
Segment your market
Research and understand your market
Create and test your marketing strategy
Related articles
Location Quotient: Determine Unique Industries in Specific Regional Economies
Shift-Share Analysis: Determine the Competitiveness of an Industry
Competitive Monitoring: Assert Your Place Above the Competition
H2WithAnchorsWhat is market segmentation?
What are examples of market segmentation?
How are markets segmented?
Why is market segmentation important?
The benefits of market segmentation with alternative data
Free data sample
Common market segmentation mistakes to avoid
How to get started with segmentation
Conclusion
BodyUnderstanding Market Segmentation: Benefits, Importance, and Use CasesCoresignalOctober 11, 2021Customers are the centerpiece of any business. Profit-generating abilities are directly dependent on how successful we are in targeting the right audience and offering products that soothe our customers’ pain points. However, in practice, this is extremely challenging for any business, regardless of its industry. Research indicates that 95% of new products fail because of ineffective market segmentation. Thus, the next sections introduce you to the concept of market segmentation, a process that helps companies divide customers into categories in order to improve the ROAS (return on ad spend). What is market segmentation?Many business professionals tend to overlook market segmentation. This concept refers to dividing the target market into clusters or subsets based on different criteria. The purpose is not to create a marketing strategy; rather, market segmentation helps you understand your potential customers, according to their behaviors, interests, demographics, priorities, and many others. Understanding these market segments is the first step to create a successful marketing strategy. Once you understand what appeals to your target customers, you can create efficient targeting strategies, thus increasing your ROAS. In short, market segmentation aims to answer the question “what do customers want?”. In turn, this helps your business drive sales by developing efficient marketing strategies, investing in new products and services, and even expanding the market share. Without market segmentation, businesses use guesswork to create marketing strategies. Assuming what may or may not work using intuition leads to lost opportunities. For instance, you may assume that your target audience is the youth and you focus on this age group; however, marketing segmentation might show you that the adult population demands your type of product more than teenagers. Thus, creating youth-centered marketing strategies will alienate your key customers. In other words, market segmentation allows you to craft your strategies based on data rather than intuition and guesswork. What are examples of market segmentation?There are endless examples of market segmentation nowadays. Mature companies know how to categorize their target market in different subsets and create efficient ads. For example, a sports footwear manufacturer is likely to segment and target its market differently according to each cluster identified during the market segmentation process. The company may target people who go to the gym frequently, athletes, busy professionals, and fashion-conscious women. All of these segments require different advertising: gym-goes seek durability, comfort and support, busy professionals may require quality and comfort, while fashion-conscious women need sports shoes that combine the latest fashion trends with the benefits of sports shoes. Instead of crafting a marketing message that targets all of these people at the same time, a successful business creates a separate marketing campaign for each of them. How are markets segmented?Market segmentation depends on the type of your business, product, and target audience. Firstly, you need to know who represents your target audience and what characteristics are the most important. This macro- to micro- process starts by looking into broad categories, such as:Demographic characteristics, including sex, age, occupation. This category requires you to collect data regarding the sex, occupation, or age of your customers, and craft marketing campaigns specific to these subgroups. For instance, a company that manufactures cereals can use demographic characteristics to target their audience – they can use different messages for kids, health-conscious consumers, or adults looking for a boost of vitamins and energy. Popular examples that use demographic segmentation include Axe body spray, for instance, which is aimed at teenagers, while Old Spice is targeted towards young men. Yet, in essence, both products are deodorants – with the same purpose of keeping underarms odor-free. Behavioral aspects, such as attitudes, knowledge, and usage patterns. Behavioral segmentation is successful when combined with other characteristics, including demographics. This is because it essentially focuses on what customers like or dislike, and such preferences depend on age, ethnicity, marital status, occupation, or education. For example, senior consumers may prefer a physical shopping experience rather than using online platforms. One of the most popular examples of behavioral segmentation is Netflix. When users watch their favorite movies and TV shows, the platform retains the history and predicts similar content, using machine learning. This type of behavioral segmentation ensures that users retain their interest in the platform, thus are more likely to keep paying for their subscriptions. Geographic region. Geographic segmentation refers to categorizing customers according to their physical location. For instance, if you have a physical clothing store in a city, it is redundant to advertise your services miles away from it, as people are not likely to travel long hours to buy your clothes. Geographic segmentation is likely to impact buyers’ needs and behaviors. In the example above, your clothing offering depends massively on the season. If you have an online clothing store, you need to target different customers living in different states, based on their local weather. In this case, companies can use alternative data collected from sensors to segment their markets. Some examples include CCTV, geo-location, POS data, and satellites. Psychographic characteristics or opinions, interests, and activities. Psychographic segmentation refers to targeting marketing campaigns based on key customers’ beliefs, perceptions, and thoughts. The background of psychographic segmentation is rooted in the VALS framework developed by Arnold Mitchel in 1980. It stands for “values, attitudes, and lifestyles”, leveraging this information for market research. For a business professional, this is extremely important since you are more likely to make the correct decisions when you know both what your customer likes and how they think. One example would be luxury brands. A company that provides high-end accessories needs to identify customers belonging to the upper class with a high buying power. Psychographic segmentation can help you find such customers, understand how they think (i.e., they have a predisposition for luxury goods), and target them successfully. Other criteria. Some businesses prefer to split their customers according to their transaction worth. In other words, this refers to how much they may spend on buying products. These data can also be used by B2B companies. For instance, if you have a B2B software company, you may want to use alternative data that indicates how much companies spend on their tech assets, the value of their purchases, and how often they purchase software. The choice of alternative data is broader in this category – for instance, you can use credit card transactions, corporate data, or sales data. Also, B2B companies use alternative data for firmographic segmentation. This is the same as demographic segmentation but for companies. Some characteristics of companies may include industry size, number of employees, revenue, and location. Why is market segmentation important?Businesses use market segmentation for many reasons. The most important one is that you can retain and acquire customers with a higher success rate. In other words, market segmentation helps you use your resources efficiently, translating into higher financial performance. Segmenting the market will help stay up to date with your customers’ wants, needs, and interests. You will have a higher chance of retaining your current customers and even winning your competitors’ clients. Tailoring perfect messages that respond to their requirements can help you earn their trust, build brand loyalty, and exceed their expectations. Market segmentation is a way of understanding what makes your customers happy. In turn, you will be able to deliver what they need in order to stay with your company and purchase your products and services. Additionally, market segmentation is crucial if you want to reach more customers. Understanding different categories of consumers will help you identify how to tailor your ads and products to satisfy them. This could help you rebrand or successfully launch new services and products to appeal to new customers. Finally, market segmentation is a powerful weapon against your competition. You can create highly relevant ads and messages to attract your customers. In turn, these messages will make you unique among other businesses that use a general marketing campaign to appeal to the masses. Instead of blending in the market, your business can stand out from the crowd, promoting its unique selling point loud and clear. The benefits of market segmentation with alternative data. Numerous studies indicate the numerous benefits of marketing segmentation. For instance, Bain & Company concluded that about 81% of executives state that segmentation is directly linked to profit growth. Furthermore, the study showed that companies using market segmentation strategies had, on average, 10% higher profit. Some other benefits of market segmentation include:Specific, clear marketing messages – market segmentation allows you to speak directly to your targeted group of people in a way that is applicable to them. This is because you understand their needs, wants, and expectations. More efficient digital advertising – creating vague, generic digital adverts should no longer be an issue. With alternative data, you can easily segment your market and direct the digital marketing efforts according to locations, ages, interests, spending patterns, and online buying patterns. Highly effective marketing efforts – using alternative data, such as firmographics, you can get to know your potential customers before getting in touch with them. This provides you with the advantage of knowing what they are most responsive to since you know what they need. Lower costs – since your marketing campaigns are more effective, this lowers your costs since you maximize your revenues from each ad. Also, you can use popular digital platforms, such as Google or Facebook, to craft ads and direct them towards the key potential clients. Selecting your clientele – instead of waiting for customers to reach out to you, you can target the right customers – or, only the people you want to buy from you, shaping your brand. Make your customers loyal – market segmentation and efficient targeting will make your customers feel understood and you are more likely to retain them, building brand loyalty. Identify growth opportunities – when you segment the market, you will likely discover new niches. This could help you find underserved markets, new ways of serving your current customer base, and find opportunities for R&D. PDFPDF sampleFree data sample. See the sample structure of our resume and company JSON recordsExplore the main resume and firmographic data pointsFind out the definition of each data pointWe might use your email to provide you with information on services that may be of interest to you. You can opt-out of any marketing-related communications at any time. For more information on your rights and data use please read our Privacy Policy.Common market segmentation mistakes to avoid. Market segmentation may be quite straightforward. All you need to do is break down your target audience into smaller segments, according to different criteria. However, making mistakes when segmenting your market can be detrimental, impacting the success of your marketing campaign. Between segmenting the marketing and collecting the extra cash from your customers, you can fall into several pitfalls. First, a common mistake is breaking down your target audience into too many small segments. Although mass marketing is less efficient than market segmentation, many business professionals make the mistake of focusing on a very small category. A limited market segment means that your customer base is quite small, thus the profit potential is also small. The second caveat is focusing too much on market segments without using key financial data. More specifically, you may have the perfect market segment, but you are not correlating this information with return on investment (ROI). ROI is a profitability metric and, if it is amiss, you need to revise your marketing strategy, pricing, and other aspects to find out what you can improve. Finally, the last common mistake is to focus solely on your existing customers. For instance, you may only market your cereal brand to teenagers. In this case, you could miss out on potential customers, such as busy professionals looking for a quick and easy breakfast, health-conscious consumers looking for nutritious meals, and others. Markets and trends change over time, so it’s important to look beyond your current audience, searching for unexploited opportunities. This would also position you ahead of your competition and may turn you into a market leader.How to get started with segmentation. In short, market segmentation is a straightforward process. There are several steps you need to follow to get started:Define your market. Firstly, you need to know who you are serving and who needs your products and services. At this stage, you could also use firmographic alternative data to find out more about your competitors, or another type of alt data to analyze the market. Segment your market. Once you broadly establish who your main customer is, use segmentation criteria, such as psychographic, demographic, and others, to segment the market. You can use more than one; in fact, many companies use a combination of criteria. Also, you can use creative factors, too, such as categorizing your customers according to generations, for instance. Research and understand your market. Next, you need to conduct research and analyze your market. You can do so by using web-scraped data, social media comments, or sensor data to understand customer behavior. The right methods depend on your product and chosen market segment. A traditional approach would mean that you conduct surveys or interviews to understand your target customers; yet, in the digital era, you can easily collect all the information online or use a data provider. Create and test your marketing strategy. You need to use the insights from the previous step to crafting your preliminary marketing strategy. This should address your chosen market segment directly, answer its needs, and attract consumers to your brand. You can use conversion tracking to see how successful the strategy is; this testing stage can be repeated several times as you fine-tune your strategy based on your findings. Conclusion. Nowadays, buyers have more power, demanding prompt services, high-quality products, and omnipotent brands. This is why market segmentation is a key competitive advantage. It allows you to understand your customers, anticipate their needs, and seize growth opportunities. This powerful technique allows you to improve your decision-making, marketing efforts, and improve your company’s bottom line. The key to successful market segmentation remains data quality – alternative data can be extremely broad, unstructured, and unreliable. This is why you need to pick your data provider after doing your due diligence, ensuring that you have access to the latest industry information in accessible and easy-to-understand formats. Related articles. Andrius ZiuznysJanuary 07, 2022Location Quotient: Determine Unique Industries in Specific Regional Economies. Location quotient is an important factor in trying to determine the uniqueness of an industry in a specific region. Some...Read moreAndrius ZiuznysDecember 23, 2021Shift-Share Analysis: Determine the Competitiveness of an Industry. Shift-share analysis provides you with insights into the competitiveness of an industry and whether a certain region has...Read moreAndrius ZiuznysDecember 20, 2021Competitive Monitoring: Assert Your Place Above the Competition. Competitive monitoring is one of the most important things in terms of improving your business. Keeping track of the competition...Read more
Topics
  • Topic
  • Tf
  • Position
  • market
  • 57
  • 22
  • segmentation
  • 44
  • 22
  • customer
  • 40
  • 22
  • market segmentation
  • 27
  • 22
  • data
  • 26
  • 22
  • marketing
  • 25
  • 22
  • company
  • 19
  • 22
  • target
  • 16
  • 22
  • segment
  • 15
  • 22
  • business
  • 13
  • 22
  • product
  • 13
  • 22
  • strategy
  • 13
  • 22
  • understand
  • 10
  • 22
  • alternative data
  • 9
  • 22
  • instance
  • 9
  • 22
  • example
  • 9
  • 22
  • alternative
  • 9
  • 22
  • marketing strategy
  • 8
  • 22
  • audience
  • 8
  • 22
  • create
  • 8
  • 22
  • marketing campaign
  • 7
  • 22
  • market segment
  • 7
  • 22
  • campaign
  • 7
  • 22
  • industry
  • 7
  • 22
  • service
  • 7
  • 22
  • brand
  • 7
  • 22
  • target audience
  • 6
  • 22
  • professional
  • 6
  • 22
  • interest
  • 6
  • 22
  • demographic
  • 6
  • 22
  • efficient
  • 6
  • 22
  • key
  • 6
  • 22
  • message
  • 6
  • 22
  • characteristic
  • 6
  • 22
  • important
  • 6
  • 22
  • information
  • 6
  • 22
  • segment market
  • 5
  • 22
  • target customer
  • 4
  • 22
  • company alternative data
  • 3
  • 22
  • business professional
  • 3
  • 22
  • target market
  • 3
  • 22
  • potential customer
  • 3
  • 22
  • product service
  • 3
  • 22
  • busy professional
  • 3
  • 22
  • behavioral segmentation
  • 3
  • 22
  • company alternative
  • 3
  • 22
  • psychographic segmentation
  • 3
  • 22
  • marketing effort
  • 3
  • 22
Result 23
TitleMarket Segmentation — Definition — TrackMaven
Urlhttps://www.skyword.com/marketing-dictionary/market-segmentation/
DescriptionMarket segmentation is the process of dividing potential customers into groups, or segments, based on different characteristics. Get the full definition
DateApr 9, 2014
Organic Position23
H1Market Segmentation
H2Why is market segmentation important for marketers?
H3Skyword Staff
H2WithAnchorsWhy is market segmentation important for marketers?
BodyMarket SegmentationBy Skyword Staff on April 9, 2014Market segmentation is the process of dividing a market of potential customers into groups, or segments, based on different characteristics. The segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations.Why is market segmentation important for marketers?Market segmentation makes it easier for marketers to personalize their marketing campaigns.By arranging their company's target market into segmented groups, rather than targeting each potential customer individually, marketers can be more efficient with their time, money, and other resources than if they were targeting consumers on an individual level. Grouping similar consumers together allows marketers to target specific audiences in a cost effective manner.Market segmentation also reduces the risk of an unsuccessful or ineffective marketing campaign. When marketers divide a market based on key characteristics and personalize their strategies based on that information, there is a much higher chance of success than if they were to create a generic campaign and try to implement it across all segments.Marketers can also us segmentation to prioritize their target audiences. If segmentation shows that some consumers would be more likely to buy a product than others, marketers can better allocate their attention and resources.AuthorSkyword Staff. https://www.skyword.com/marketing-dictionary/market-segmentation/ https://www.skyword.com/marketing-dictionary/market-segmentation/ Skyword Staff SkywordThis website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. SettingsAcceptCookies Policy Close Privacy Overview. This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience. Necessary Necessary Always Enabled Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information. SAVE & ACCEPT ×
Topics
  • Topic
  • Tf
  • Position
  • cooky
  • 12
  • 23
  • website
  • 8
  • 23
  • segmentation
  • 8
  • 23
  • website cooky
  • 5
  • 23
  • market
  • 5
  • 23
  • marketer
  • 5
  • 23
  • consumer
  • 4
  • 23
  • staff
  • 3
  • 23
  • based
  • 3
  • 23
  • marketing
  • 3
  • 23
  • target
  • 3
  • 23
  • experience
  • 3
  • 23
Result 24
TitleMarket Segmentation | Inc.com
Urlhttps://www.inc.com/encyclopedia/market-segmentation.html
DescriptionRelated Terms: Demographics; Target Market..
Date
Organic Position24
H1Market Segmentation
H2MARKETING STRATEGIES
SEGMENTATION BASES
THE SEGMENTATION PROCESS
BIBLIOGRAPHY
H3
H2WithAnchorsMARKETING STRATEGIES
SEGMENTATION BASES
THE SEGMENTATION PROCESS
BIBLIOGRAPHY
BodyMarket SegmentationShape Related Terms: Demographics; Target MarketMarket segmentation is the science of dividing an overall market into customer subsets or segments, whose in segment sharing similar characteristics and needs. Segmentation typically involves significant market research and can thus be costly. It is practiced especially in major companies with highly differentiated product lines or serving large markets. The small business tends to discover the segment it serves best by the trial and error of dealing with customers and stocking products more and more suitable to its particular clientele.Segmentation lies somewhere near the middle of a continuum of marketing strategies that range from mass marketing—in which a single product is offered to all customers in a market—to one-to-one marketing—in which a different product is specifically designed for each individual customer (e.g., plastic surgery). Most businesses realize that since no two people are exactly alike, it is unlikely that they will be able to please all customers in a market with a single product. They also realize that it is rarely feasible to create a distinct product for every customer. Instead, most businesses attempt to improve their odds of attracting a significant base of customers by dividing the overall market into segments, then trying to match their product and marketing mix more closely to the needs of one or more segments. A number of customer characteristics, known as segmentation bases, can be used to define market segments. Some commonly used bases include age, gender, income, geographical area, and buying behavior.MARKETING STRATEGIES. Although mass marketing (also known as market aggregation or undifferentiated marketing) cannot fully satisfy every customer in a market, many companies still employ this strategy. It is commonly used in the marketing of standardized goods and services—including sugar, gasoline, rubber bands, or dry cleaning services—when large numbers of people have similar needs and they perceive the product or service as largely the same regardless of the provider. Mass marketing offers some advantages to businesses, such as reduced production and marketing costs. Due to the efficiency of large production runs and a single marketing program, businesses that mass market their goods or services may be able to provide consumers with more value for their money.Some producers of mass market goods employ a marketing strategy known as product differentiation to make their offering seem distinct from that of competitors, even though the products are largely the same. For example, a producer of bath towels might embroider its brand name on its towels and sell them only through upscale department stores as a form of product differentiation. Consumers might tend to perceive these towels as somehow better than other brands, and thus worthy of a premium price. But changing consumer perceptions in this way can be very expensive in terms of promotion and packaging. A product differentiation strategy is most likely to be effective when consumers care about the product and there are identifiable differences between brands.Despite the cost advantages mass marketing offers to businesses, this strategy has drawbacks. A single product offering cannot fully satisfy the diverse needs of all consumers in a market, and consumers with unsatisfied needs expose businesses to challenges by competitors who are able to identify and fulfill consumer needs more precisely. In fact, markets for new products typically begin with one competitor offering a single product, then gradually splinter into segments as competitors enter the market with products and marketing messages targeted at groups of consumers the original producer may have missed. These new competitors are able to enter a market ostensibly controlled by an established competitor because they can identify and meet the needs of unsatisfied customer segments. In recent times, the proliferation of computerized customer databases has worked to drive marketing toward ever-more-narrowly focused market segments.Applying a market segmentation strategy is most effective when an overall market consists of many smaller segments whose members have certain characteristics or needs in common. Through segmentation, businesses can divide such a market into several homogeneous groups and develop a separate product and marketing program to more exactly fit the needs of one or more segments. Though this approach can provide significant benefits to consumers and a profitable sales volume (rather than a maximum sales volume) to businesses, it can be costly to implement. For example, identifying homogeneous market segments requires significant amounts of market research, which can be expensive. Also, businesses may experience a rise in production costs as they forfeit the efficiency of mass production in favor of smaller production runs that meet the needs of a subset of the market. Finally, a company may find that sales of a product developed for one segment encroach upon the sales of another product intended for another segment. Nonetheless, market segmentation is vital to success in many industries where consumers have diverse and specific needs, such as homebuilding, furniture upholstery, and tailoring.SEGMENTATION BASES. In order successfully to implement a market segmentation strategy, a business must employ market research techniques to find patterns of similarity among customer preferences in a market. Ideally, customer preferences will fall into distinct clusters based upon identifiable population characteristics. This means that if customer requirements were plotted on a graph using certain characteristics, or segmentation bases, along the axes, the points would tend to form clusters.In marketing jargon, customer segments must be measurable by clear characteristics; they must be large enough to constitute a market; reaching them should be predictably easy (they all watch American Idol, for example, or subscribe to one of four magazines); they must be predictably responsive to marketing; the segment must be stable over time and not a one-time aggregation.Determining how to segment a market is one of the most important questions a marketer must face. Creative and effective market segmentation can lead to the development of popular new products; unsuccessful segmentation can consume a lot of dollars and yield nothing. There are three main types of segmentation bases for businesses to consider—descriptive, behavioral, and benefit bases—each of which breaks down into numerous potential customer traits.Descriptive bases for market segmentation include a variety of factors that describe the demographic and geographic situations of the customers in a market. They are the most commonly used segmentation bases because they are easy to measure, and because they often serve as strong indicators of consumer needs and preferences. Some of the demographic variables that are used as descriptive bases in market segmentation might include age, gender, religion, income, and family size, while some of the geographic variables might include region of the country, climate, and population of the surrounding area.Behavioral bases for market segmentation are generally more difficult to measure than descriptive bases, but they are often considered to be more powerful determinants of consumer purchases. They include those underlying factors that help motivate consumers to make certain buying decisions, such as personality, lifestyle, and social class. Behavioral bases also include factors that are directly related to consumer purchases of certain goods, such as their degree of brand loyalty, the rate at which they use the product and need to replace it, and their readiness to buy at a particular time.Businesses that segment a market based on benefits hope to identify the primary benefit that consumers seek in buying a certain product, then supply a product that provides that benefit. This segmentation approach is based upon the idea that market segments exist primarily because consumers seek different benefits from products, rather than because of various other differences between consumers. One potential pitfall to this approach is that consumers do not always know or cannot always identify a single benefit that influences them to make a purchase decision. Many marketers use a combination of bases that seem most appropriate when segmenting a market. Using a single variable is undoubtedly easier, but it often turns out to be less precise.THE SEGMENTATION PROCESS. The process itself begins with narrowing the universe to be studied into a specific market now served by the company and obtaining basic information on competing products or services now on offer. Once this step has been completed, variables to be used are identified, reviewed, and tested. At the most basic level such variables, for example, might involve income and demographic characteristics of the consumers.With these preparations completed, actual market research is organized to collect and to analyze data on the selected broad body of consumers. Analysis of the data will begin to cluster the consumers into distinct groupings based on the variables. Additional analysis, possibly involving more research, will next be conducted to develop detailed profiles of each segment already identified.If the right variables were chosen at the outset and the market research was competently done, the resulting groupings will have characteristics distinct enough, and documented well enough, to permit the company to select one or more segments which will be easiest or more profitable to serve. The company's own strategy will play a role. Its aim, for example, may be use its capacity more fully and the company will therefore select a segment which will purchase the largest volume; alternative the company's aim may be low production levels with high profits, leading to a focus on another segment.The last stage of the segmentation process will be the development of product and marketing plans based on the segment(s) most closely matching the company's "ideal" situation.In general, customers are willing to pay a premium for a product that meets their needs more specifically than does a competing product. Thus marketers who successfully segment the overall market and adapt their products to the needs of one or more smaller segments stand to gain in terms of increased profit margins and reduced competitive pressures. Small businesses, in particular, may find market segmentation to be a key in enabling them to compete with larger firms. Many management consulting firms offer assistance with market segmentation to small businesses. But the potential gains offered by market segmentation must be measured against the costs, which—in addition to the market research required to segment a market—may include increased production and marketing expenses. BIBLIOGRAPHY. Eliya, Susan A. "No Sweat: Segmentation continues to create opportunities for growth." Household & Personal Products. March 2006 "Hidden Identity: Retailers still struggle to know their customers." Chain Store Age. January 2006. "Market Segmentation Pays Off in Big Way in Mexico." MMR. 12 December 2005. Millier, Paul. "Intuition Can Help in Segmenting Industrial Markets." Industrial Marketing Management. March 2000. Simon, Karen. "Stay Ahead of Your Customers." Apply. 1 February 2006. Updated Feb 6, 2020Sponsored Business Content
Topics
  • Topic
  • Tf
  • Position
  • market
  • 51
  • 24
  • product
  • 32
  • 24
  • marketing
  • 27
  • 24
  • segment
  • 25
  • 24
  • segmentation
  • 23
  • 24
  • customer
  • 20
  • 24
  • consumer
  • 20
  • 24
  • business
  • 16
  • 24
  • bas
  • 14
  • 24
  • market segmentation
  • 11
  • 24
  • company
  • 9
  • 24
  • strategy
  • 9
  • 24
  • single
  • 8
  • 24
  • include
  • 8
  • 24
  • characteristic
  • 8
  • 24
  • research
  • 7
  • 24
  • mass
  • 7
  • 24
  • production
  • 7
  • 24
  • benefit
  • 7
  • 24
  • variable
  • 7
  • 24
  • market research
  • 6
  • 24
  • cost
  • 6
  • 24
  • service
  • 6
  • 24
  • competitor
  • 6
  • 24
  • mass marketing
  • 5
  • 24
  • single product
  • 5
  • 24
  • customer market
  • 5
  • 24
  • segment market
  • 5
  • 24
  • large
  • 5
  • 24
  • distinct
  • 5
  • 24
  • example
  • 5
  • 24
  • based
  • 5
  • 24
  • market segment
  • 4
  • 24
  • product marketing
  • 4
  • 24
  • segmentation bas
  • 4
  • 24
  • good
  • 4
  • 24
  • offer
  • 4
  • 24
  • identify
  • 4
  • 24
  • sale
  • 4
  • 24
  • bas market segmentation
  • 3
  • 24
  • characteristic segmentation
  • 3
  • 24
  • small business
  • 3
  • 24
  • product differentiation
  • 3
  • 24
  • bas market
  • 3
  • 24
Result 25
TitleMarket Segmentation
Urlhttp://www.netmba.com/marketing/market/segmentation/
Description
Date
Organic Position25
H1
H2
H3Market Segmentation
H2WithAnchors
BodySegmentation Market Segmentation. Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers. The Need for Market Segmentation. The marketing concept calls for understanding customers and satisfying their needs better than the competition. But different customers have different needs, and it rarely is possible to satisfy all customers by treating them alike. Mass marketing refers to treatment of the market as a homogenous group and offering the same marketing mix to all customers. Mass marketing allows economies of scale to be realized through mass production, mass distribution, and mass communication. The drawback of mass marketing is that customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers. If firms ignored the differing customer needs, another firm likely would enter the market with a product that serves a specific group, and the incumbant firms would lose those customers. Target marketing on the other hand recognizes the diversity of customers and does not try to please all of them with the same offering. The first step in target marketing is to identify different market segments and their needs. Requirements of Market Segments. In addition to having different needs, for segments to be practical they should be evaluated against the following criteria: Identifiable: the differentiating attributes of the segments must be measurable so that they can be identified. Accessible: the segments must be reachable through communication and distribution channels. Substantial: the segments should be sufficiently large to justify the resources required to target them. Unique needs: to justify separate offerings, the segments must respond differently to the different marketing mixes. Durable: the segments should be relatively stable to minimize the cost of frequent changes. A good market segmentation will result in segment members that are internally homogenous and externally heterogeneous; that is, as similar as possible within the segment, and as different as possible between segments. Bases for Segmentation in Consumer Markets. Consumer markets can be segmented on the following customer characteristics. Geographic Demographic Psychographic Behavioralistic Geographic Segmentation The following are some examples of geographic variables often used in segmentation. Region: by continent, country, state, or even neighborhood Size of metropolitan area: segmented according to size of population Population density: often classified as urban, suburban, or rural Climate: according to weather patterns common to certain geographic regions Demographic Segmentation Some demographic segmentation variables include: Age Gender Family size Family lifecycle Generation: baby-boomers, Generation X, etc. Income Occupation Education Ethnicity Nationality Religion Social class Many of these variables have standard categories for their values. For example, family lifecycle often is expressed as bachelor, married with no children (DINKS: Double Income, No Kids), full-nest, empty-nest, or solitary survivor. Some of these categories have several stages, for example, full-nest I, II, or III depending on the age of the children. Psychographic Segmentation Psychographic segmentation groups customers according to their lifestyle. Activities, interests, and opinions (AIO) surveys are one tool for measuring lifestyle. Some psychographic variables include: Activities Interests Opinions Attitudes Values Behavioralistic Segmentation Behavioral segmentation is based on actual customer behavior toward products. Some behavioralistic variables include: Benefits sought Usage rate Brand loyalty User status: potential, first-time, regular, etc. Readiness to buy Occasions: holidays and events that stimulate purchases Behavioral segmentation has the advantage of using variables that are closely related to the product itself. It is a fairly direct starting point for market segmentation. Bases for Segmentation in Industrial Markets. In contrast to consumers, industrial customers tend to be fewer in number and purchase larger quantities. They evaluate offerings in more detail, and the decision process usually involves more than one person. These characteristics apply to organizations such as manufacturers and service providers, as well as resellers, governments, and institutions. Many of the consumer market segmentation variables can be applied to industrial markets. Industrial markets might be segmented on characteristics such as: Location Company type Behavioral characteristics Location In industrial markets, customer location may be important in some cases. Shipping costs may be a purchase factor for vendor selection for products having a high bulk to value ratio, so distance from the vendor may be critical. In some industries firms tend to cluster together geographically and therefore may have similar needs within a region. Company Type Business customers can be classified according to type as follows: Company size Industry Decision making unit Purchase Criteria Behavioral Characteristics In industrial markets, patterns of purchase behavior can be a basis for segmentation. Such behavioral characteristics may include: Usage rate Buying status: potential, first-time, regular, etc. Purchase procedure: sealed bids, negotiations, etc. Marketing > Segmentation Home  |  About  |  Privacy  |  Reprints  |  Terms of Use Copyright © 2002-2010  NetMBA.com. All rights reserved. This web site is operated by theInternet Center for Management and Business Administration, Inc. Search NetMBA Site Information   Home   About   Privacy   Reprints   Terms of Use  Marketing Accounting   Economics   Finance   ManagementMarketing   Operations   Statistics   Strategy
Topics
  • Topic
  • Tf
  • Position
  • segmentation
  • 21
  • 25
  • market
  • 18
  • 25
  • customer
  • 16
  • 25
  • segment
  • 11
  • 25
  • marketing
  • 10
  • 25
  • market segmentation
  • 7
  • 25
  • variable
  • 7
  • 25
  • mass
  • 6
  • 25
  • characteristic
  • 6
  • 25
  • industrial
  • 6
  • 25
  • industrial market
  • 5
  • 25
  • firm
  • 5
  • 25
  • offering
  • 5
  • 25
  • behavioral
  • 5
  • 25
  • purchase
  • 5
  • 25
  • product
  • 4
  • 25
  • consumer
  • 4
  • 25
  • geographic
  • 4
  • 25
  • psychographic
  • 4
  • 25
  • size
  • 4
  • 25
  • include
  • 4
  • 25
  • mass marketing
  • 3
  • 25
  • consumer market
  • 3
  • 25
  • variable include
  • 3
  • 25
  • behavioral characteristic
  • 3
  • 25
  • target
  • 3
  • 25
  • segmented
  • 3
  • 25
  • demographic
  • 3
  • 25
  • behavioralistic
  • 3
  • 25
  • example
  • 3
  • 25
  • region
  • 3
  • 25
  • family
  • 3
  • 25
  • nest
  • 3
  • 25
  • location
  • 3
  • 25
  • company
  • 3
  • 25
  • type
  • 3
  • 25
Result 26
TitleWhat is market segmentation?
Urlhttps://productmarketingalliance.com/what-is-market-segmentation/
DescriptionMarket segmentation is the first step in determining who your target market is and how you can execute better marketing strategies to reach them
DateJul 1, 2020
Organic Position26
H1What is market segmentation?
H2
H3What defines market segmentation?
Types of market segmentation
Market segmentation requirements
Customer segmentation examples
The benefits of market segmentation
What’s the relationship between market segmentation, targeting, and positioning?
H2WithAnchors
BodyWhat is market segmentation? Customer & Market Research | Product Marketing | Messaging & Positioning | Product positioning Emma Bilardi. Read More Knowing your audience is marketing 101, but knowing exactly how your product can benefit your audience in a market oversaturated with competitors takes a little more finesse.Segmentation arms you with the data needed to fulfill your target customers’ needs. Essentially making sure that you’re not out there trying to sell water to whales. You’ve utilized segmentation and analyzed the stats, deducing that water is free and plentiful in their geographical habitats, and whales are really cash poor.Now that we’ve dipped our toes in, let's take a deeper dive into segmentation, where we’ll be explaining the different types, the benefits of segmentation and its relationship with targeting and positioning.What defines market segmentation?Market segmentation is the first step in determining who your target market is. By segmenting potential customers into groups that share similar characteristics, you can identify groups to target further down the line. Traditional market segments are identified using the following characteristics: DemographicsPsychographicsGeographicsBehavioralTypes of market segmentation. Next, let’s delve a little deeper into the different types of segmentation listed above and throw in a few examples of segmentation in practice to give you a clearer picture.Demographic segmentationDemographic segmentation is defined by age, education, occupation, income, gender, race, sexuality, family size, interests, and more.It’s the most commonly used form of segmentation because it’s essentially the root of all of our spending habits, where we live defines where we buy things, where we work has a huge influence on what we buy, and how much we spend is heavily dependent on how much we earn. A good example of this is T-Mobile’s 2019 campaign targeting baby boomers - the company’s strategists pinpointed what older adults were looking for when buying a phone; which they found was the ability to connect with family and friends. In response to these findings, the company unveiled a new data plan targeted towards customers 55+ which eradicated all of the unnecessary added extras you might find in a millennials plan who, for instance, streams an ordinate amount of content via TikTok or Spotify.Psychographic segmentationWhile demographics tell us who the customer is, psychographics tell us why the customer buys a product. Psychographics categorizes customers by factors relating to personality and characteristics, like lifestyle, values, opinions, and hobbies. For example, a company like Mercedes Benz focuses on customers who value luxury and status, while Volkswagen, which literally translates to ‘the people’s car’ in German targets an audience who value affordability and reliability.Geographic segmentationGeographic segmentation categorizes customers based on geographic boundaries. For example;CountryStateCityZip CodeClimateUrban or rural For example, a company that sells only waterproof outerwear would have an easier time targeting markets in Seattle than say, Arizona.Behavioral segmentationBehavioral segmentation divides consumers by behavior patterns as they interact with a business - their knowledge of a product, what they like or dislike about a product or a service, how often they interact with a certain area of your app, and so on. Netflix has the perfect model of behavioral segmentation, with each user receiving recommendations completely unique to them and based purely on their viewing behaviors. The data doesn’t lie, around 80% of Netflix views come from the recommendation feature.Market segmentation requirements. Once you’ve finished the market segmentation study, your results should be:MeasurableAccessibleSubstantialActionableLet’s unpack each in a little more detail...MeasurableSegments should be easily measurable so that marketing strategists can decide whether, and to what extent, they should focus their efforts and resources. If you can’t measure your rate of growth then how will you know the segment is valuable?AccessibleThere’s no use selecting a market segment you can’t reach, whether that means geographically, or psychologically. After all, you wouldn’t market a software solution specifically for a doctor and try and sell it to a police officer, would you?SubstantialThe market segment must have the ability to buy your product. For example, almost everyone would like to own a private jet but can most of us actually afford it? Not in this lifetime!DifferentiableDifferences between market segments should be clearly defined so that your campaigns, products, and marketing tools can be used as effectively as possible without overlap.ActionableThe market segment needs to provide supporting data for a marketing position or sales approach so that your intended marketing targets actually purchase a product.Customer segmentation examples. Gender In this example, Abercrombie & Fitch segment by gender using the same campaign for men and women. Although the offers are the same, the campaigns are slightly different.A&F know that having the exact same campaign for both genders just won’t work. Instead, they've divided their customer profiles to see which trends appeal to female customers (e.g., vintage) and what appeals to their male customers (e.g., fitted jeans) when it comes to selling denim.Age Segmenting by age, Urban Outfitters has ads that target school, college, or university students. This particular one is aimed at their University student target base. This offers a discount to students who more than likely only have their student loan to play with, new clothes to buy, and a dorm room to decorate. Which is why the website also has a section dedicated to dorm room interior design and school supplies.New Customers/old customersThis is an email Typeform sends out when you sign up for their product. The email essentially asks the customer to self-segment themselves into either a new user or an old pro. These two customer segments will then receive a specific type of content targeted at their sophistication level, super relevant to where they are in their customer journey.The benefits of market segmentation. By getting to know your customers better, you can create and execute better marketing strategies from the ground up. Market segmentation can help you identify gaps in the market and determine how you fill them.Create stronger marketing messagesWhen you know who you’re talking to you can personalize your marketing messages. Instead of vague, generic messaging, you can develop stronger, direct messaging that speaks to the unique needs and characteristics of your target audience.“I think one of the key things you need to nail right away is messaging and positioning, they’re core to any Product Marketing role. If you're not good at messaging, you really can’t do a Product Marketing role. So, be good about figuring out how to message to the right people at the right time. - Sarah Din, Director of Product Marketing at SurveyMonkeyFind out what works With dozens of marketing tactics available, it can be difficult to know what will attract your ideal audience. Using different types of market segmentation guides you toward the marketing strategies that will work best. When you know the audience you are targeting, you can determine the best solutions and methods for reaching them.Create hyper-targeted adsYou can use all the information gathered to target audiences by age, location, purchasing habits, interests, and more to create more effective digital ad campaigns.Stand out from the crowd Being more specific with messaging and value propositions will set you apart from the competition. By focusing on specific customer needs and characteristics you can deliver products that uniquely serve them, which inevitably leads to stronger customer bonds and lasting brand affinity.Identify niche market opportunitiesWhen you segment your target market, you can identify parts of the industry that can be served and utilized in new ways. Once you’ve pinpointed these underserved markets you can develop new products and services to serve them. What’s the relationship between market segmentation, targeting, and positioning?Segmentation, Targeting, and Positioning (STP) is one of the most popular marketing models out there. In fact, Smart Insights conducted a survey where STP was revealed as the second most popular marketing model, behind the classic SWOT / TOWs matrix. The STP model is useful for creating marketing communications strategies because it helps marketers prioritize propositions and develop and deliver personalized, relevant messages to different audiences.Courtesy of Smart InsightsSTP is essentially the journey you take to position your brand in the minds of consumers, it’s the difference between yours and your competitor’s products.Targeting Once you’ve collected the relevant data through market segmentation, you can then use it to identify your target market.Product positioning When you have a target audience in your sights you can then work to present your product and all of its benefits, tailored specifically to the needs of your target market. There you have it!  Now that we’ve armed you with the basics of segmentation, why not expand your knowledge even further and get certified at the same time with our Product Marketing: Core [on-demand] course? We have a whole host of templates and framework waiting for you on our website, covering everything from market segments to product positioning. If learning in real-time is more your speed, check out our Product Marketing: Core [Live + Online] option, our instructors are real PMM experts with years upon years of product marketing experience. Written by: Emma Bilardi. Emma is a Manchester-based freelance writer. She's been writing for as long as she can remember, and in the last few years predominantly about product design. Read More Get product marketing insights Product Marketing Alliance — What is market segmentation? Product Marketing Alliance was founded in February 2019 with a mission of uniting product marketers across the globe. And it did just that. Let’s elevate product marketing together. ABOUT Contribute Media Guide Ambassadors Mission RESOURCES Podcasts Reports PMM tools AMAs GENERAL PMM Certification Events Membership Community Learn Product marketing Positioning & messaging Customer & market research OKRs Personas Go-to-market Sales enablement Competitor analysis
Topics
  • Topic
  • Tf
  • Position
  • market
  • 29
  • 26
  • product
  • 26
  • 26
  • marketing
  • 25
  • 26
  • segmentation
  • 23
  • 26
  • customer
  • 20
  • 26
  • product marketing
  • 13
  • 26
  • target
  • 13
  • 26
  • segment
  • 12
  • 26
  • market segmentation
  • 9
  • 26
  • audience
  • 9
  • 26
  • example
  • 8
  • 26
  • messaging
  • 7
  • 26
  • positioning
  • 7
  • 26
  • market segment
  • 6
  • 26
  • targeting
  • 6
  • 26
  • target audience
  • 5
  • 26
  • company
  • 5
  • 26
  • data
  • 5
  • 26
  • characteristic
  • 5
  • 26
  • buy
  • 5
  • 26
  • work
  • 5
  • 26
  • campaign
  • 5
  • 26
  • core
  • 4
  • 26
  • benefit
  • 4
  • 26
  • essentially
  • 4
  • 26
  • type
  • 4
  • 26
  • identify
  • 4
  • 26
  • gender
  • 4
  • 26
  • time
  • 4
  • 26
  • model
  • 4
  • 26
  • student
  • 4
  • 26
  • target market
  • 3
  • 26
  • stp
  • 3
  • 26
  • pmm
  • 3
  • 26
  • year
  • 3
  • 26
Result 27
TitleChapter 9 Market Segmentation, Class Notes
Urlhttps://www1.udel.edu/alex/chapt9.html
Description
Date
Organic Position27
H1Chapter 9 Class Notes
H2Contents of Chapter 9 Class Notes
What is a Market?
Developing a Target Market Strategy
Selecting Target Markets (Analyzing Demand)
Targeting The Market
Undifferentiated Approach (Total Market Approach)
Market Segmentation Approach
Concentration Strategy
Multi-segment strategy
Criteria needed for segmentation
Variables that can be used to segment markets
Single Variable vs. Multi-Variable Segmentation
H3Handout...Catering to Middle-Aged BBs..
Handout...The only difference is when you throw them away
Handout...Stations switching to lucrative..
Handout...Photography companies try to click..
Handout...Two income marriages are now the norm
Handout...Travel agents target grandma and grandpa
Handout...Social well being mapped out..
Handout...Lifestyle appropriate greeting cards
Handout Techno savvies...
H2WithAnchorsContents of Chapter 9 Class Notes
What is a Market?
Developing a Target Market Strategy
Selecting Target Markets (Analyzing Demand)
Targeting The Market
Undifferentiated Approach (Total Market Approach)
Market Segmentation Approach
Concentration Strategy
Multi-segment strategy
Criteria needed for segmentation
Variables that can be used to segment markets
Single Variable vs. Multi-Variable Segmentation
BodyChapter 9 Class Notes Contents of Chapter 9 Class Notes. What is a Market? Developing a Target Market Strategy Selecting a Target Market Undifferentiated Approach Market Segmentation Approach Concentration Strategy Multisegment Strategy Criteria for Segmentation Variables for Segmentation Please Email [email protected] any comments Return to Syllabus Return to Homepage What is a Market? A market is: An aggregate of people who, as individuals or organizations, have needs for products in a product class and who have the ability, willingness and authority to purchase such products (conditions needed for an exchange). Types of markets: Consumer Intend to consume or benefit, but not to make a profit. Organizational/Business For: Resale Direct use in production or general daily operations. Handout...Catering to Middle-Aged BBs... TM = Baby Boomers...40-60 year olds PRODUCT Attributes: High Powered Roomy Safety Features PRODUCTS: Toyota Avalon Oldsmobile Aurora Mercury Mystique Dodge Intrepid Chrysler Concorde Vision DON'T WANT THEIR FATHER'S CAR!! Return To Contents Developing a Target Market Strategy. Developing a target market strategy has three phases: Analyzing consumer demand Targeting the market(s) undifferentiated concentrated multisegmented Developing the marketing strategy Return To Contents Selecting Target Markets (Analyzing Demand). Need to aggregate consumers with similar needs. Demand patterns: Do all potential customers have similar needs/desires or are there clusters? Types of demand patterns are: Homogeneous Demand-uniform, everyone demands the product for the same reason(s). Very rare in the US, staple foods... Clustered Demand-consumer demand classified in 2 or more identifiable clusters. IE Automobiles: luxury cheap Sporty Spacious Diffused Demand-Product differentiation more costly and more difficult to communicate IE Cosmetic market, need to offer hundreds of shades of lipstick. Firms try to modify consumer demand to develop clusters of at least a moderate size. Or uses one MM. Return To Contents Targeting The Market. Undifferentiated Approach (Total Market Approach). Single Marketing Mix for the entire market. All consumers have similar needs for a specific kind of product. Homogeneous market, or demand is so diffused it is not worthwhile to differentiate, try to make demand more homogeneous. Single MM consists of: 1 Pricing strategy 1 Promotional program aimed at everybody 1 Type of product with little/no variation 1 Distribution system aimed at entire market The elements of the marketing mix do not change for different consumers, all elements are developed for all consumers. Examples include Staple foods-sugar and salt and farm produce. Henry Ford, Model T, all in black. Popular when large scale production began. Not so popular now due to competition, improved marketing research capabilities, and total production and marketing costs can be reduced by segmentation. Organization must be able to develop and maintain a single marketing mix. Major objective is to maximize sales. Return To Contents Market Segmentation Approach. Individuals with diverse product needs have heterogeneous needs. Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product needs, there are clusters of needs. The purpose is to design a MM(s) that more precisely matches the needs of individuals in a selected market segment(s). A market segment consists of individuals, groups or organizations with one or more characteristics that cause them to have relatively similar product needs. There are two Market Segmentation Strategies. Return To Contents Concentration Strategy. A single market segment with one MM. Market | |A Market Segment |------------------- One MM------------------>A Market Segment |------------------- |A Market Segment | PROS include: It allows a firm to specialize can focus all energies on satisfying one group's needs A firm with limited resources can compete with larger organizations. CONS include: Puts all eggs in one basket. Small shift in the population or consumer tastes can greatly effect the firm. May have trouble expanding into new markets (especially up-market). Haggar having problems finding someone to license their name for womens apparel, even though women purchase 70% Haggar clothes for men. Objective is not to maximize sales, it is efficiency, attracting a large portion of one section while controlling costs. Examples include ROLEX, Anyone wear one. Who are their target market?? Over $100,000 Return To Contents Multi-segment strategy. 2 or more segments are sought with a MM for each segment, different marketing plan for each segment. This approach combines the best attributes of undifferentiated marketing and concentrated marketing. Market MM--------------------->|A Market Segment |_______________________ MM--------------------->|A Market Segment |_______________________ MM--------------------->|A Market Segment |_______________________ MM--------------------->|A Market Segment | | Example: Marriott International: Marriott Suites...Permanent vacationers Fairfield Inn...Economy Lodging Residence Inn...Extended Stay Courtyard By Marriott...Business Travellers PROS include: Shift excess production capacity. Can achieve same market coverage as with mass marketing. Price differentials among different brands can be maintained Contact Lens!! Consumers in each segment may be willing to pay a premium for the tailor-made product. Less risk, not relying on one market. CONS include: Demands a greater number of production processes. Costs and resources and increased marketing costs through selling through different channels and promoting more brands, using different packaging etc. Must be careful to maintain the product distinctiveness in each consumer group and guard its overall image (Contact lenses) Handout...The only difference is when you throw them away. Discusses the individual branding of contact lenses. 3 brands: Sequence2 $7-$9 Medalist $15-$25 Optima $70 The core product is the same, use different Packaging, Brand Name, Price to differentiate and create a different marketing mix. What will happen if consumers find out?? Objective: Sales maximization, but can remain a specialist. Can get firmly established in one segment, then pursue another. Return To Contents Criteria needed for segmentation. For segmentation to occur: Segments must have enough profit potential to justify developing and maintaining a MM Consumer must have heterogeneous (different) needs for the product. Segmented consumer needs must be homogeneous (similar) Company must be able to reach a segment with a MM, IE Review to reach Delaware undergraduates. How do marketers reach children? Cartoons on saturday Nickelodian Cereal boxes Sports illustrated for kids Look at how media has changed recently due to changing demographics etc. and therefore the need of marketers to reach these groups. Media must respond because they are essentially financed by the marketers or at least heavily subsidised Handout...Stations switching to lucrative... Indicates how media format changes due to changing population needs. Must be able to measure characteristics & needs of consumers to establish groups. Return To Contents Variables that can be used to segment markets. Need to determine the variables that distinguish marketing segments from other segments. Segmentation variables should be related to consumer needs for, and uses of, or behavior toward the product. IE Stereo; age not religion. Segmentation variable must be measurable. No best way to segment the markets. Selecting inappropriate variable limits the chances of success. Variables for segmenting Consumer Markets include: Demographic - age, sex, fertility rates, migration patterns, and mortality rates, ethnicity, income, education, occupation, family life cycle, family size, religion and social class. Handout...Photography companies try to click... Photography companies identify a new target market (children) to market their product to, current sales are declining with current target market due to advances in technology (video cameras etc.) Handout...Two income marriages are now the norm. Families have more income and less time...esp. for children!! Handout...Travel agents target grandma and grandpa. Travel agents developing a MM to attract grandparents, not senior citizens!! Geographic -Climate, terrain, natural resources, population density, subcultural values, different population growths in different areas. City size Metropolitan Statistical Area Primary Statistical Metropolitan Area Consolidated Metropolitan Statistical Area Market density-# of potential customers within a unit of land. Handout...Social well being mapped out... Geographic breakdown of the wealth/well being of the US. Psychographic - personality characteristics, motives and lifestyles Handout...Lifestyle appropriate greeting cards. Marketers must be aware of the changing lifestyles and market products accordingly. Behavioristic Variables - Regular users-potential users-non users Heavy/moderate/light users, 80-20 rule Frequent User Incentives It is five x more expensive to attract a new customer, as it is to satisfy your current customers. Benefits segmentation-focus on benefits rather than on features. Single Variable vs. Multi-Variable Segmentation. Single variable--achieved by using only one variable to segment Multi-variable-- more than one characteristic to divide market. Provides more information about segment. Able to satisfy customers more precisely. More variables creates more segments reducing the sales potential in each segment. Will additional variables help improve the firms MM. If not there is little reason to spend more money to gain information from extra variables. Handout Techno savvies.... Madison Avenue has identified a new target market to market products to. Return To Contents Go to Chapter 1 Notes Go to Chapter 2 Notes Go to Chapter 3 Notes Go to Chapter 6 Notes Go to Chapter 9 Notes Go to Chapter 8 Notes Go to Chapter 10 Notes Go to Chapter 11 Notes Go to Chapter 12 Notes Go to Chapter 15 Notes Go to Chapter 17 Notes Go to Chapter 18 Notes Go to Chapter 19 Notes Go to Chapter 20 Notes Go to Chapter 13 Notes Go to Chapter 24 Notes
Topics
  • Topic
  • Tf
  • Position
  • market
  • 60
  • 27
  • segment
  • 28
  • 27
  • note chapter
  • 26
  • 27
  • chapter
  • 26
  • 27
  • note
  • 24
  • 27
  • product
  • 20
  • 27
  • mm
  • 19
  • 27
  • market segment
  • 18
  • 27
  • consumer
  • 17
  • 27
  • variable
  • 16
  • 27
  • segmentation
  • 13
  • 27
  • demand
  • 13
  • 27
  • marketing
  • 13
  • 27
  • strategy
  • 12
  • 27
  • return
  • 11
  • 27
  • content
  • 10
  • 27
  • target
  • 10
  • 27
  • target market
  • 9
  • 27
  • return content
  • 9
  • 27
  • user
  • 7
  • 27
  • include
  • 7
  • 27
  • mm market
  • 6
  • 27
  • chapter note
  • 6
  • 27
  • _______________________ mm
  • 6
  • 27
  • developing
  • 6
  • 27
  • approach
  • 6
  • 27
  • similar
  • 6
  • 27
  • single
  • 6
  • 27
  • group
  • 6
  • 27
  • market market
  • 5
  • 27
  • individual
  • 5
  • 27
  • production
  • 5
  • 27
  • potential
  • 5
  • 27
  • customer
  • 5
  • 27
  • firm
  • 5
  • 27
  • sale
  • 5
  • 27
  • segment market
  • 4
  • 27
  • segment mm
  • 4
  • 27
  • market segmentation
  • 4
  • 27
  • marketing mix
  • 4
  • 27
  • marketer
  • 4
  • 27
  • area
  • 4
  • 27
  • developing target market
  • 3
  • 27
  • target market strategy
  • 3
  • 27
  • market segment _______________________
  • 3
  • 27
  • segment _______________________ mm
  • 3
  • 27
  • developing target
  • 3
  • 27
  • market strategy
  • 3
  • 27
  • market undifferentiated
  • 3
  • 27
  • segmentation variable
  • 3
  • 27
  • consumer demand
  • 3
  • 27
  • segment _______________________
  • 3
  • 27
  • market product
  • 3
  • 27
Result 28
TitleWhat is market segmentation? | Adobe Glossary
Urlhttps://business.adobe.com/glossary/market-segmentation.html
DescriptionMarket segmentation refers to the practice of grouping customers together based on shared characteristics or traits. Learn more.
Date
Organic Position28
H1
H2
H3
H2WithAnchors
Body
Topics
  • Topic
  • Tf
  • Position
Result 29
TitleMarket Segmentation: Examples, 5 Types, Benefits - sixads
Urlhttps://sixads.net/blog/market-segmentation-examples/
DescriptionThe benefits of market segmentation are almost limitless. Click here to learn about multiple types of it and how to do it!
DateNov 18, 2021
Organic Position29
H1What is Market Segmentation? 5 Types + Benefits
H2What is market segmentation?
Benefits of market segmentation
Five types of market segmentation
How to segment a market
Market segmentation examples
Markets change; your market segmentation strategy should, too!
FAQ
H31. Helps tailor marketing and boost engagement
2. Informs new product development
3. Reveals untapped niches
4. Improves focus
5. Informs business decisions
6. Increases brand loyalty
7. Helps your brand stand out
1. Demographic segmentation
2. Firmographic segmentation
3. Psychographic segmentation
4. Behavioral segmentation
5. Geographic segmentation
1. Volkswagen
2. Coca-Cola
3. Kellogg’s
What do you mean by market segmentation?
What are the four main market segments?
What are the five benefits of market segmentation?
H2WithAnchorsWhat is market segmentation?
Benefits of market segmentation
Five types of market segmentation
How to segment a market
Market segmentation examples
Markets change; your market segmentation strategy should, too!
FAQ
BodyWhat is Market Segmentation? 5 Types + Benefits By Kristina 18 Nov, 2021 11 min read Market Segmentation Examples Table of Contents What is market segmentation? Benefits of market segmentation Five types of market segmentationHow to segment a marketMarket segmentation examplesMarkets change; your market segmentation strategy should, too!  Share article:Over 30,000 new products launch every year. And, according to research, over 95% fail. To avoid a flop on your next product launch, it’s essential to ensure you’re tailoring your product design, marketing efforts, and sales process to the people who will actually be interested in your product or service.One of the best ways to ensure well-targeted marketing campaigns is segmenting your customer base. This involves breaking down your potential customers based on their various attributes. This could include things from marital status to online shopping behaviors and may even include their values or political opinions. Not only will this give you an in-depth look at who your market might be, but it also lets you tailor every aspect of your brand and marketing messages to engage with the people who will benefit most.What is market segmentation? . Market segmentation might sound like complex marketing jargon, but it’s not as difficult to get your head around as you might think.According to Investopedia, market segmentation involves “aggregating prospective buyers into groups or segments with common needs and who respond similarly to a marketing action.” In other words, it involves looking at your entire pool of potential customers and grouping (or segmenting) them based on similarities. These similarities can be pretty much anything you can think of, from age or geographical location to buying habits, interests, and life values.Market segmentation should form part of your target market research. Helping you learn new things about your target customers that will help you communicate your products, services, brand, values, etc. in new and better ways. Market segment: Potential customers are divided into categories based on shared traits or characteristics. Target audience/market: The most likely segments to buy from or engage with your brand. Product positioning: What product, price, promotion, and place combinations will most effectively convert the target market. Benefits of market segmentation . Market segmentation offers a plethora of benefits to every single part of your brand. It’s not just about marketing messages; it’s also about product development, publishing, sales, customer service, and your overall brand perception.A survey of marketing professionals uncovered that 62% believe audience segmentation should be a top priority to enable more precisely targeted messaging. Another study by Bain & Company found 81% of executives find segmentation crucial for growing profits, and that organizations with fantastic market segmentation strategies benefit from 10% higher profits.The benefits of market segmentation are almost limitless. But to get you started, here are some reasons you should get started with customer segmentation today:1. Helps tailor marketing and boost engagement. Naturally, when you understand who your audience is and what they’re interested in, you’ll be able to create better marketing strategies that more appropriately communicate your brand values and the benefits of your product or service. By segmenting customers, you can cultivate highly targeted marketing campaigns that get to the crux of the matter in the language, manner, and platform your customers will appreciate the most… Saving you time, effort, and money.An excellent example of this in practice would be if you’re selling dental tools. There’s no benefit in spending millions on a marketing campaign that targets everyone for such a niche item. Instead, focus your marketing efforts on the people (in this case, dentists) who are the most likely to buy. E-stores are going to make the big bucks this year.You can do it too.You can do it too. Show me howEffective market segmentation will also enable you to open a dialogue with your customers as you talk about things they care about, boosting brand engagement and perception in no time!2. Informs new product development. As we’ve mentioned, market segmentation isn’t all about marketing (although it’s undoubtedly an essential part of any effective marketing campaign). It’s also beneficial in new product development.As you know your target market better, your brand can learn what your customers need and want from you. This can go a long way for informing new product development and identifying any gaps in the market: your customers’ unmet needs.But market segmentation can go further than simply telling you what your customers want; it can also help you identify the trends that will benefit the brand in the long term. When you understand your customers, you’ll be quicker to identify an overnight trend vs. an opportunity for you to capitalize on.Car manufacturers provide an excellent example of how product development is benefitted by market segmentation… Say one segment of the brand’s market is families who love outdoorsy adventures. In this case, you might develop a vehicle with a four-wheel drive, a bicycle rack, and plenty of cargo space. Another segment could be couples who like to take trips into the city. These customers would benefit from a smaller vehicle that can navigate narrower city streets and fit into tight parking spaces. 3. Reveals untapped niches . In addition to helping you discover your next best-selling product based on your customers’ needs and wants, market segmentation can also help you reveal niches and gaps in the market that you’re not currently making the most of.For example, say you’re a clothing store that exclusively sells outdoor apparel to middle-aged women, and your market segmentation research uncovers that a large chunk of your current audience has kids. You might be missing out on some significant profits by not offering apparel for their children (or not marketing kids’ wear effectively).Analyzing customer data can also help make your store more accessible. For example, you might be making most of your sales in a physical store but learn through market segmentation research that most of your customers prefer to shop online. This could be an indicator that your online store isn’t user-friendly or meeting the needs of your target customers.4. Improves focus. Pretty much all the benefits of market segmentation come down to improving your company’s focus. Not only will this help establish your brand identity, but it will also help you become more memorable and a go-to for your customers’ needs. Conversely, a brand that tries to target everyone all at once is likely to come across as generic and unmemorable. Your customers could even become confused about who your brand is and what you stand for, even if you have a quality mission statement and ethos. But wait, what about Amazon?!We hear you, but it’s important to remember that Bezos’ innovative platform actually started life as an online bookstore… Pretty niche if you ask us!In addition, if you’ve ever actually shopped at Amazon.com, you’ll notice that there are plenty of personalized and focused features on the website - from recommended products to “continue browsing,” gift guides, seasonal deals, and much more - ensuring every shopper receives a personalized, focused experience.5. Informs business decisions. We’ve mentioned how effective market segmentation can help inform new product development, but it can also be helpful when making other business decisions.One of the best examples of this would be pricing. When pricing a new product, you want to hit that happy medium between a price that customers are happy to pay and one that maximizes your profits. Without understanding who your customers are, what budgets they’re working with, and how high their demand is, you can’t hope to hit this bullseye.Another example would be the distribution of your products. If your target audience is younger and likes to shop online, you will naturally want to offer your products or services in an online store. You might even consider utilizing social selling to make your store as accessible as possible. 6. Increases brand loyalty. When customers feel understood by a brand, they’re more likely to stick with it and recommend it to others. But without effective market segmentation strategies in place, how can you hope to understand?Segmentation that looks into psychographic aspects will be the most useful here. This covers things like beliefs, values, and priorities. For example, suppose one of your identified groups cares strongly about the environment. In that case, it might be worth making a big deal about any sustainable practices you put into place to reassure them that they’d be making a responsible choice by shopping with you. A trick that many of the best Shopify stores utilize! You’re also more likely to be able to create offers, promotions, or special events that resonate with your customers, providing “irresistible” incentives for a return visit. You could even use your research to inform things like your loyalty program to ensure they offer the perks that your customers care about. Increasing customer retention, loyalty, and lifetime value in one fell swoop! 7. Helps your brand stand out. With so much competition out there, it can be challenging to make your small business stand out from the crowd. With effective market segmentation, you can allow your customers to see the true value of shopping with you vs. anyone else. It will help you stand out in their minds and ensure you’re a more memorable brand that clearly understands and appreciates who your customers are, what they need, and how they prefer to communicate. Five types of market segmentation. There are multiple types of market segmentation you can use in the business world, and the best one for your brand might not be the one your competitors are using. However, most marketers agree there are five main types of market segmentation; these are demographic, firmographic, psychographic, behavioral, and geographic. 1. Demographic segmentation. Demographic segmentation is probably the most common and obvious way to break down a potential market. It involves categorizing people based on observable differences, such as:AgeGenderEducationOccupationMarital statusIncomeReligionEthnicityWhile this is a fantastic starting point for segmenting a market, it’s not always suitable as the only type of market research you complete. You should always use Demographics alongside other segmentation types and be sensitive in how you collect the information and the questions you’re asking.Some good examples of how you can use demographic data include:Alcohol. When marketing alcohol, you don’t want to waste your time/money marketing to those under 21, so “age” is essential.Beard care products. These products will be marketed to men. An exception to this might be around the holidays, where marketing to women shopping for their male loved ones could be beneficial.Food delivery services. There are many reasons you might utilize a food delivery service, and understanding your audience’s demographics will help tailor your marketing appropriately. For example, students will be having food delivered for a very different reason to top-level employees who have no time to cook. 2. Firmographic segmentation. “Firmographics are to firms and investors as demographics are to people.”B2B firms use Firmographic segmentation to help identify the firms and businesses that would most benefit from their products/services. It’s similar to investigating the demographics of customers and can include aspects such as:Turnover and profitIndustrySize of businessNumber of employeesLocation(s)Ownership (public, private, government, etc.)Organizational trendsAverage sales cycle3. Psychographic segmentation. Psychographic segmentation is a bit like a holistic version of demographic data. But instead of considering the physical or observable attributes of a customer, it looks more into what matters most to them. Some examples of psychographic data might include a customer’s:HobbiesInterestsValuesLife goalsBeliefsLifestylePersonality traitsIn other words, demographic data might tell you your customer is a young man; psychographic segmentation lets you know this customer loves bowling, cares about the environment, and wants to get married and have children one day.4. Behavioral segmentation. Looking at how your customers behave and engage with your brand will enable you to create messaging and product placement that benefits these behaviors. It’s relatively simple to establish your customers’ online habits with tools such as Google Analytics or even via your website host. For physical stores, this might take a bit more analysis and research. Spending habitsConversion rates vs. cart abandonment frequencyBrowsing patternsBrand interactionsLoyaltyProduct ratings and reviewsNumber of website visitsAnalyzing your market’s behavioral habits is particularly beneficial for product placement. It can help you streamline your website or optimize the layout of your store, figure out why carts are abandoned, and help you figure out the best places to advertise. 5. Geographic segmentation. It can be argued that geographic data is just another type of demographic market segmentation, but we believe it deserves a category all of its own. That’s because geographic data can uncover a considerable amount of information about your customers, from shopping habits to budget and even what everyday language/slang will be most engaging.When looking at geographic data, you can go as wide or narrow as you like. Consider areas like:CountryStateCityZipcodeNeighborhood (suburban vs. urban, for example)LanguagePopulation densityEconomic statusRegional climateAn excellent example of using geography to your advantage would be for apparel or footwear stores. A customer in a cooler climate might be interested in your warm boots or coats, whereas someone in Florida is far more likely to be shopping for sandals and beachwear. By understanding where your customers live, you can tailor your marketing strategies to best suit their needs.How to segment a market. Now you know what a market segment is and have an idea of which type of market segmentation your brand should be focusing on, it’s time to identify the different groups your customers belong to.Define your market: Is there a need for what you’re selling? How large is your pool of potential customers? What is your current market position?Segment your market: Which types of segmentation do you want to use? It’s often worth combining a few to get a detailed insight into your target market. Understand your market: You can’t tailor marketing, product development, or anything else to an audience you don’t understand. Conduct research surveys, focus groups, polls, and other market research exercises to determine what makes your audience tick. It’s essential to use both quantitative and qualitative questions to uncover as much data as possible. Look for analytical information: This is where cookies come in! Use third-party data to supplement the responses you’ve received from your target audience. This will look at buyer behavior, how long a user spends on your website, etc. Create your segments: Analyse the results of your target market research to create your buyer and audience personas, taking into account the customer segments that are more relevant to your brand.Build your marketing strategies: Use your buyer personas to develop marketing strategies that relate to the demographics, behaviors, interests, values, etc., of your target customers. Test your marketing strategy: Once you’ve interpreted your target market research and responses and have developed a marketing strategy that appeals to the buyer personas you’ve identified, test your findings using conversion tracking. If the results are disappointing, you might need to reassess the marketing strategy or take another look at your segments to ensure you’re communicating effectively to the right audience.  E-stores are going to make the big bucks this year.You can do it too.You can do it too. Show me howMarket segmentation examples. 1. Volkswagen . The Volkswagen group is an excellent example of how market segmentation allows a brand to appeal to very different groups of people.When you think of vehicles like the Volkswagen Polo, you probably think of words like “robust,” “hatchback,” and “affordable.” But you might not realize that the Volkswagen group is responsible for producing brands including Audi, Lamborghini, Porsche, and even Ducati!Operating in multiple countries worldwide, Volkswagen is a fantastic brand for demonstrating how different market segments can create a successful business strategy.  2. Coca-Cola. When it comes to understanding a broad customer base, few brands are as effective as Coca-Cola. With countless products available in almost every country worldwide, Coca-Cola uses every type of market segmentation to create products that appeal to every individual.From recyclable packaging to varying price points and even caffeine-free cola vs. energy drinks (with different labels and color schemes!), plus various seasonal offers (is it even Christmas until the Coca-Cola van appears?), there’s very little this brand hasn’t considered. 3. Kellogg’s . Kellogg’s might seem like a straightforward cereal brand, but they effectively market to almost every segment simultaneously, which is an impressive feat! From tasty Pop-Tarts to health-conscious Special K, kid-friendly Mini-Wheats to classic Cornflakes… Kellogg’s utilizes market segmentation to identify different groups based on demographics, behaviors, and psychographic segmentation.The brand even uses geographic segmentation to ensure each breakfast item matches customers’ appetites based in different areas. Don’t believe us? If you get a chance to visit Europe, take a good look at the Kellogg’s cereals available. You might be surprised how different they are from the US options!Markets change; your market segmentation strategy should, too! . Like any marketing strategy, one of the most important things to consider when identifying your market segments is that they may change as time goes on. Therefore, it’s vital to be flexible with your market segment research and be prepared to update it as customer behaviors, priorities, or preferences change.The changes brought on by Covid19 are an obvious example of how buyer behaviors can change swiftly, but seasonal considerations should also come into play. For example, Christmas, Hanukkah, and even Black Friday can dramatically affect a shopper’s likelihood to buy, and customers may be drawn in by different marketing methods than usual. When you fully understand your customers and target audience, however, making the necessary changes as time goes on will become easier and more streamlined. Regularly asking your customers what they want and maintaining an engaging dialogue with them will ensure you’re set up for success no matter what business decision you need to make.FAQ. What do you mean by market segmentation?Market segmentation is one of the best ways to understand your audience. It refers to the process of dividing consumers into distinct categories based on aspects such as age, gender, physical location, income, ethics, priorities, aspirations, values, family size, or anything else that’s relevant to your brand.What are the four main market segments?Demographic: Observable differences/similarities, including age, gender, family size, household income, employment status, etc. Firmographic: Like demographic market segmentation for B2B companies. Psychographic: Considers the values, priorities, beliefs, etc., of the target audience. Behavioral segmentation: How customers behave both online and in physical stores. Geographic market segmentation is also a valuable market segmentation option. Although this can come under demographic segmentation, many marketers would look at the geographics of their target audience as a category in itself.What are the five benefits of market segmentation?There are many benefits to analyzing market segments as part of your business plan. The top five would include:It helps you create highly tailored and engaging advertisements.Helps inform new product development and identify potential gaps in the market.It makes your brand more memorable and ensures you stand out from the competition.Increases brand loyalty and customer lifetime value.Boosts focus and ensures you’re addressing your customers’ needs with every business decision made. 3 SPOTS ONLY — EXCLUSIVE DEALDon’t wait for a miracle to happen – improve your Facebook ROAS now. Get started free Want to learn more?What is a Marketing Plan, How to Write One & 5 Great ExamplesTarget Market: Examples, What it is & How to Define it12 Marketing Strategy Examples, How to Create One + Tips Share article: Topics:E-Commerce KristinaI'm a content manager at sixads. I'm fiery about marketing, writing and traveling, so you can often find me scribbling away in some unknown corner of the world. If you want to know more ways to increase traffic and attract buyers to your online store get in touch with sixads on one of the channels bellow. Related reading 40 Best Black Friday Quotes to Win the Sales in 2022 Best Black Friday Ideas For Small Businesses What is a Dropshipping Business?
Topics
  • Topic
  • Tf
  • Position
  • market
  • 69
  • 29
  • segmentation
  • 57
  • 29
  • customer
  • 56
  • 29
  • market segmentation
  • 36
  • 29
  • marketing
  • 32
  • 29
  • brand
  • 30
  • 29
  • product
  • 27
  • 29
  • example
  • 19
  • 29
  • strategy
  • 17
  • 29
  • demographic
  • 17
  • 29
  • target
  • 17
  • 29
  • audience
  • 16
  • 29
  • store
  • 16
  • 29
  • benefit
  • 16
  • 29
  • segment
  • 16
  • 29
  • type
  • 12
  • 29
  • research
  • 12
  • 29
  • create
  • 11
  • 29
  • data
  • 11
  • 29
  • business
  • 11
  • 29
  • marketing strategy
  • 10
  • 29
  • geographic
  • 10
  • 29
  • ensure
  • 10
  • 29
  • online
  • 9
  • 29
  • kellogg
  • 8
  • 29
  • based
  • 8
  • 29
  • group
  • 8
  • 29
  • psychographic
  • 8
  • 29
  • type market
  • 7
  • 29
  • market segment
  • 7
  • 29
  • product development
  • 7
  • 29
  • behavior
  • 7
  • 29
  • value
  • 7
  • 29
  • buyer
  • 7
  • 29
  • development
  • 7
  • 29
  • understand
  • 7
  • 29
  • segmentation strategy
  • 6
  • 29
  • target market
  • 6
  • 29
  • type market segmentation
  • 5
  • 29
  • coca cola
  • 5
  • 29
  • benefit market
  • 5
  • 29
  • market research
  • 5
  • 29
  • target audience
  • 5
  • 29
  • benefit market segmentation
  • 4
  • 29
  • market segmentation strategy
  • 4
  • 29
  • demographic segmentation
  • 4
  • 29
  • marketing campaign
  • 4
  • 29
  • potential customer
  • 4
  • 29
  • tailor marketing
  • 4
  • 29
  • excellent example
  • 4
  • 29
  • target market research
  • 3
  • 29
  • inform product development
  • 3
  • 29
  • effective market segmentation
  • 3
  • 29
  • product service
  • 3
  • 29
  • inform product
  • 3
  • 29
  • physical store
  • 3
  • 29
  • online store
  • 3
  • 29
  • business decision
  • 3
  • 29
  • effective market
  • 3
  • 29
  • segmentation customer
  • 3
  • 29
  • demographic data
  • 3
  • 29
  • psychographic segmentation
  • 3
  • 29
  • geographic data
  • 3
  • 29
  • black friday
  • 3
  • 29