A segmentation strategy is essential for businesses with a desire to fully understand the preferences of their target market, as well as the decisions being made by their consumer audience. By being able to ascertain these insights through segmentation strategies, organizations can more effectively shape marketing communication, help guide product innovation, achieve business objectives, and more. Segmentation strategies can serve an organization well, whether the objective is mass market or mass customization (also known as a market of one).
If the goal is to understand a consumer audience and give them the best and most viable products and services, focus on these three areas:
Demographics. Segmentation is very closely related to demographics. Factors such as age, gender, race, ethnicity, education, and socio-economic status are crucial markers of response to products and services. Ongoing data proves that marketing along these variables allows companies to speak effectively to large swathes of the population by tweaking their strategy accordingly.
Geography. Geography segmentation is a widely used segmentation strategy and one of the simplest to execute. For businesses that market internationally, geographic segmentation becomes a means to navigate what could be significant differences in preferences and behaviors from citizens of different countries, but even regional and national differences can vary greatly. Understanding a consumer audience based upon geography will provide significant insights into how to target and communicate effectively with a particular audience.
Psychographic. The advent of digital information gathering has completely transformed psychographic segmentation. This approach to segmentation can identify personality traits, values, general interests, and lifestyle choices of consumers. This level of understanding of a target consumer audience enables organizations to make sure their product or service will resonate with a very specific audience.
The core difference between a B2B segmentation strategy and one focused on the end user is that the former targets a far smaller group of individuals. These individuals, though, are usually responsible for far bigger purchases and decisions. They comprise these three main types:
While segmentation data is a valuable asset, an organization can only reap the rewards after it analyzes and applies the information effectively. With the right insight and intelligent planning, segmentation will help market a product or service much more effectively and successfully. Not only does this strategy build better relationships, it does so while simultaneously delivering more value for every marketing and product development dollar spent.