marketing

What Is Market Segmentation? To better understand market segmentation, let us look at this scenario: When trying to reach customers or clients with your marketing message or ad campaign, targeting the right market with the right message is very essential because, 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 are not interested in your products or services. When your message is not optimized for your target audience, you’ll end up with a lot of wasted advertising resources. Market segmentation can help you to target just the people most likely to become satisfied customers of your company’s products and services or enthusiastic consumers of your content. To break a market into segments, you split it up into groups that have similar characteristics. You can base a segment on one or more of these qualities. By splitting up your audience in this way allows for more precise targeted marketing activity and personalized content creation. The Importance of Market Segmentation Market segmentation can help you to define and better understand your target audience and ideal customers. If you’re a marketer, this will allow you to identify the right market for your products or services and then target your marketing message more effectively.  Similarly, publishers can use market segmentation to offer more targeted advertising options for the products, they are marketing and it will also allow them to customize their content for different audiences or groups. For example, you’re a marketer who’s advertising a new brand of dress. You could split an audience into segments based on the type of dress, either for winter or summer, and the audience could be segmented into female or male. You could then segment that audience further based on if the dresses are for adults or children. A publisher could use this same information to show content about fashion to people who are looking to buy or own a clothing store. 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, focus-less message. This increases the likelihood of someone engaging with your ad or content, leading to more efficient campaigns and a higher return on investment (ROI). Types of Market Segmentation There are different kinds of market segments you can create. Below are the four main methods of market segmentation. It is possible to create more niche segments within the types below. 1. Demographic Segmentation Demographic segmentation is one of the most common types of segmentation. It refers to dividing audiences based on observable information and people-based differences. These qualities include things like age, sex, marital status, family size, occupation, education level, income, race, nationality, location, religion, etc. Segmenting a market according to demographics is the most basic form of segmentation. Combining demographic segmentation with other types can help you narrow down your market even more. One benefit of this kind of segmentation is that the information is easy to access and low-cost to obtain. Some products are targeted explicitly at 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. We can also obtain demographic data directly from customers by looking at their social media profiles, where they may have provided information about themselves. 2. Behavioural Segmentation You can also divide your market into segments based on consumers’ behaviuors or purchasing patterns online, especially regarding your product or service. Dividing your audience based on the behaviours they display allows you to create messaging that caters to those behaviors. The actions you might look out for are the ones relating to how someone interacts with your product, website, app, or brand. Some types of behaviors to look at include: Online shopping habits: Consider a user’s online shopping habits across all sites, as this may give you a clue as to the fact that they might 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 if they add products to their cart, and more. Benefits sought: This refers to the need a customer is trying to meet by purchasing a product, which is also referred to as their pain points. Usage rate: You can categorize users based on usage rate. Your marketing message 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 marketing messages accordingly. Finally, behavioural 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. Marketers can collect this data through various means, such as the cookies placed on websites, the purchase data in a company’s customer relationship management (CRM) software, and or third-party databases. 3. Geographic Segmentation Geographic segmentation, or splitting up your targeted audience and market based on their location, is a basic but highly useful segmentation strategy. A customer’s