Anyone who decides to start a business, or intends to open a business, must understand the concept of market segmentation , because it is the first step towards a clear and well-defined strategy.
But do you know what it means? Market segmentation refers to the process of creating audience groups with common interests, behaviors, preferences, habits, or characteristics .
Rather than developing strategies aimed at reaching everyone, market segmentation allows you to adopt specific measures, increasing the chances of success.
This tool allows you to better define, understand, and serve your target audience . It also facilitates the personalization of campaigns, as they are based on who you really want to reach.
In this article, you’ll better understand what market segmentation is. We’ll discuss its importance, its types, and the main methods for achieving it. We’ll provide practical tips on how to implement this strategy in your company and the benefits it can offer.
Enjoy reading!
What is the importance of market segmentation for a company’s positioning?
By understanding a company’s diverse customer profiles, it’s possible to develop more efficient product, sales, and marketing strategies that meet their needs.
This is because market segmentation allows for a deeper understanding of consumers and more targeted positioning.
Imagine you sell clothing to a young audience. Creating generic communications is intended to reach older audiences as well, which would telegram number list not have the desired effect and would incur unnecessary costs.
Therefore, market segmentation allows us to better understand and direct actions to those who really intend to purchase the products or services .
What types of market segmentation exist?
There are 4 main types of market segmentation :
1. Geographical
Target people based on their physical location. Companies that sell eco-friendly fireplaces, for example, can target their activities to regions where it’s cold, rather than focusing on places where warmth is present year-round .
2. Demographics
This market segmentation usually divides the population based on variables such as:
- Age;
- Sex;
- Family income;
- Occupation;
- Nationality.
3. Behavioral
It divides the population according budget and traffic distribution: to their behavior, usage, and decision-making patterns . People who lead healthier lifestyles, for example, are often the focus of organic food companies.
4. Psychological
Use people’s lifestyles, interests, activities, and opinions as a form of market segmentation.
Its difference with the type of segmentation by behavior is that it precisely takes into account the psychological aspects that lead the consumer to make a purchase .
What market segmentation methods can be used?
For market segmentation to be successful, it’s important to gather a wealth of information. Therefore, a company needs extensive research to understand its audiences and separate them into groups.
The main methods used to carry out this work are:
Market research
It allows us to understand who consumers are, how they behave and how they relate to brands .
Through this method, it’s possible to determine what to do to promote products, whether they’re truly interesting to the target audience, and whether it’s necessary to modify the business’s positioning and communication process.
Positioning by differentiation
Knowing that people behave differently depending on variables such as education and economic class, it is necessary to position and adapt the company to meet the specific desires of the audiences you want to reach.
Definition of the target audience
It’s important to understand who your company wants to sell to before developing any marketing campaign. This way, you can begin targeting your efforts to those most likely to purchase your product or service .
- You might also be interested in: LTV: Learn why this metric is crucial for your business .
How to do efficient market segmentation?
Check out our 8 tips to help you fax list segment your audience and grow your business and further specialize in your niche:
- Conduct preliminary research to better understand your customers and their preferences. Some data can be obtained through Google Analytics , as it shows the profile of those who most frequently visit your website.
- Determine your target audience’s market segmentation criteria , such as demographic or behavioral data;
- Plan the structure of the study , mixing geographical, demographic, behavioral and psychological questions, as well as quantitative questions;
- Create your customer segments , after a precise analysis of the responses obtained in the study;
- Focus on the identified audience , creating specific campaigns to attract their attention;
- Analyze their needs , so that what you sell can satisfy them;
- Implement tests and iterations with your segments, evaluating whether they agree and, if necessary, using new criteria to create them;
- Make constant adjustments based on market trends, competition, and the changing tastes and desires of your audiences, which can be achieved through a strategy known as “ benchmarking .”
Main benefits of market segmentation for a company
Market segmentation is an important strategic action for any type of business. Learn about the most important benefits it offers:
