Market Segmentation Guide
Understand customers’ needs & deliver a best-in-class experience.
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To grow your business it should resonate with your target audience’s needs. This means it is important that your message target the right audience. Creating imprecise marketing campaigns will reach lots of people who aren’t a good fit for your offerings.
Tailoring your marketing efforts is important to target the right audience, boost brand perception, and also grow ROI. This is where market segmentation fits into the puzzle. In this blog, we will focus on why market segmentation is important.
Market segmentation refers to the categorization of the target population into groups or segments based on shared characteristics. It helps you to determine exactly what messaging will drive customers to make purchases.
Market segmentation also allows businesses to manage their time and money, among other resources, in a better way. When you segment the consumers, you can identify which consumers are most likely to make a purchase and which are not. This allows you to focus marketing efforts on the most valuable customers, reducing the number of resources spent on marketing.
The data collected using market segmentation helps marketers personalize the campaigns. This also helps you to utilize their time & resource efficiently. You can avoid offering products and services that would never interest the audience. Thus saving brands from running unsuccessful campaigns and wasting their resource.
Market segmentation offers a suite of advantages some of which we have mentioned below:
Segmenting your target market can help you discover opportunities to create personalized campaigns.
The data enables you to understand the needs, preferences, and reasons for customer behavior. This way you can build strategies that market towards the need of different segments instead of a one-size-fits-all.
With a better understanding of your customers, you can focus on tailoring efforts that satisfy a particular segment of customers. You deliver the right product/ service/ content to the right audience making their journey with you smooth thus facilitating satisfaction.
Running 1 or 2 targeted campaigns is better than aiming at a broad population with a one-size-fits-all campaign. It helps you create effective strategies that target the right segment and resonates with their needs. Thus saving time and resources from offering products and services your customers don’t want.
Having knowledge of each segment can help design better products. Your brand can design a product that matches the demand and needs of each segment. Products with high market potential can be personalized and targeted to cater to the specific target market.
[Related read: How to Segment the Market for a New Product in 5 Steps]
Start creating targeted segments with our market segmentation survey template.
Geographic segmentation involves segmenting consumers based on geographic location such as by county or by city. Divisions can be made in terms of:
Demographic segmentation involves segmenting consumers based on demographic information as mentioned below:
Behavioral segmentation involves segmenting consumers based on behavioral traits such as loyalty and spending habits. This method of segmentation groups consumers in the following ways:
Psychographic segmentation involves segmenting consumers based on psychological traits. It helps in gaining a better understanding of customers’ purchase intent.
[Related Read: Ultimate Guide to Market Segmentation]
Market segmentation makes planning marketing efforts easier. It helps you to concentrate on a particular group instead of targeting a wide market. It uncovers the key factors about who your target audience is and how to sell to the right audience.
Market segmentation helps you make data-driven decisions to perfect your efforts, identify marketing opportunities and efficiently use resources. If you want to learn more about how you can create targeted segments and cater to their needs, contact us.
Psychographic segmentation tries to understand consumers’ lifestyle and their key values. Behavioral segmentation, on the other hand, focuses on customer behavior, such as their purchasing habits.
The goal of market segmentation is to help businesses understand distinct groups of consumers that make up their market. By grouping people with similar characteristics and attributes, marketers can effectively target the segments that are most valuable to their business.
Buyer persona, also known as customer persona, is a fictional character created to represent key traits and characteristics of a sizable segment of an organization’s target audience.
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