Segmentation is the process of separating your marketing targets into sections for businesses and customers. Segmentation is a strategy that allows you to identify and connect with your core audience.
In this article, we discuss what segmentation is, the different types of market segmentation, what makes a good market segment and how to use market segmentation for your marketing efforts.
Table of Content
- What is meant by segmentation?
- Types of market segmentation
- What advantages does Segmentation offer?
- Qualities of a successful market sector
- How to segment the market in a profitable way
- Conclusion
What is meant by segmentation?
When you segment your possible target markets, you can identify which ones will provide the best return on your marketing investments. Various factors, including an individual’s age, income, interests, and behaviours, are used to segment the population. You may better understand a market’s basic values and what will ultimately draw customers to your brand by segmenting different markets.
Learn more: What is Customer Segmentation Analysis and How Does It Work? (With Tips)
Types of market segmentation
One of the best methods for figuring out how to spend your marketing budget to get the most sales is market segmentation. The following list of four market segmentation types will help you determine your target markets:
- Demographic Segmentation
- Firmographic segmentation
- Behavioral Segmentation
- Geographic Segmentation
- B2B (Business to Business) Segmentation
- Psychographic Segmentation
Demographic Segmentation
The term “demographics” refers to a lead’s unique traits, such as age, race, gender, income, education, occupation, and marital status. Particularly small firms frequently utilise demographics to identify clients who are interested in their goods and services and to build lasting relationships with them.
Firmographic Segmentation
A business-to-business (B2B) approach of market segmentation called firmographic focuses on the characteristics of the company you’re targeting, such as the potential number of employees and level of profitability. This strategy is appropriate for small firms and calls for investigation and direct communication with other small enterprises.
Behavioral Segmentation
Understanding how a person interacts with a product or service requires behavioural analysis. If you’re selling a high-tech product, for instance, you might want to target a group that is accustomed to picking up new technology. Your marketing team may find it helpful to conduct a poll to learn more about customers’ perceptions of your product’s usability.
Geographic segmentation
Because it is based on where the consumers in your market live, this sort of segmentation is the simplest to document. This section can provide you with important information on whether regional variables, such as weather, can affect how or how frequently people might use your product. If you align regional findings with one of the other sectors, such as “education,” you might be able to discover even more about this market.
B2B (Business-to-Business) Segmentation
Instead of separating the market based on the characteristics of individual consumers, B2B segmentation does so. Industry type, firm size, purchasing power, and purchasing preferences are all taken into account. This segmentation aids B2B enterprises in focusing their marketing efforts on the organisations most likely to profit from their goods or services.
Psychographic segmentation
Psychographics concentrate on a person’s fundamental beliefs and lifestyle decisions to forecast how they will react to your goods. People that care about the environment, for instance, are more likely to purchase things made of recycled materials. If you want to know if there is a relationship between education level and purchasing preferences, you can also look at the demographics of your target market.
What advantages does segmentation offer?
Market segmentation offers a number of advantages and aids in identifying the consumers most likely to buy your good or service. Here are just a few advantages you might encounter:
- You’ll design marketing campaigns that appeal specifically to the target market.
- You’ll keep more of your clients.
- Your target market will be more devoted to your brand.
- Your marketing initiatives will be more effective and targeted.
- You’ll have the ability to foresee the demands of your target market and create items that speak to them.
Qualities of a successful market sector
A smart technique to test your market segments after you’ve completed your investigation is to confirm that each one is:
- Measurable: You ought to be able to anticipate what your sector will buy. If you’re selling a year-round product, for example, you’ll need to ensure that your segment’s purchasing power is consistent year-round, without experiencing significant drops during non-holiday seasons.
- Attainable: Your target market should be able to afford it and be interested in your goods. This is particularly possible with expensive goods. You can come across a market segment that recognises the importance of high-quality goods but cannot afford your pricing point. You won’t benefit from that kind of part, sorry. A lucrative market will probably buy your stuff.
- Substantial: For your marketing efforts to be profitable, your segment must comprise a sufficient number of consumers who are likely to buy your goods. The money you would spend marketing to a sector that doesn’t have enough potential buyers won’t be worthwhile.
- Unique: Your segments will naturally cross over to some extent, particularly based on location and behaviour. However, a successful sector will typically stand out from other ones that have been identified. The individuals in your section will have characteristics in common with those of the others.
How to segment the market in a profitable way
When undertaking market segmentation, take the following actions:
1. Ask comprehensive inquiries
When speaking with various individuals of your target market, create a comprehensive list of questions. When conducting interviews during a live event or in a public place, active engagement is simpler to obtain. The user may have more time to expound on their responses in online surveys, though. To your subscriber list and those who have contacted you via your website, you might potentially send a tailored email.
2. Find your segments in step two
Determine which demographics are most likely to be interested in your product or service by analysing the responses to your questions, polls, and surveys. You can use this information to direct your marketing initiatives.
3. Choose your market segment
Select the market segmentation type(s) you want to employ. Companies frequently decide to use more than one type. A small business, for instance, can concentrate on a certain geographic area in order to develop a devoted local clientele.
4. Examine the outcomes
If you’ve identified the right target audiences, marketing initiatives focused at your chosen segments should provide measurable outcomes. To ensure you’re achieving the outcomes you require, you should test your segments at this point and evaluate their answers.
5. Mistaken judgement
Reassess your segments and return to Step 1 if testing doesn’t yield the outcomes you were hoping for. If you’re having trouble identifying your best segments, you might want to think about combining several segmentation types.
Learn more: How to Segment For Form Outcomes
Conclusion:
Modern marketing plans must include market segmentation since it helps companies better understand and interact with their target audiences. Companies can adjust their offers, marketing, and distribution methods to fit the unique needs and preferences of various client segments by using various types of market segmentation. In today’s cutthroat business environment, organisations may optimise their marketing efforts and foster sustainable growth by having a clear understanding of the traits and behaviours of the target market.
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