Why is segmentation used

While you are unlikely to use all of them for every one of your marketing campaigns, customers are often grouped under the following categories:. It can also help:. A solution like BlueVenn, for example, enables marketers to easily find and analyze their customers using Venn diagrams, maps, and interactive charts and graphs — without a need to create complex algorithms. Every day, thousands of companies rely on Upland to get their jobs done simply and effectively.

See how brands are putting Upland to work. Customer data. What are some of the most common segment descriptors? While you are unlikely to use all of them for every one of your marketing campaigns, customers are often grouped under the following categories: Demographic — basic personal information, including age, gender, income and education.

Geographic — specific areas where customers or businesses are located, broken down international region right down to a rural area. Behavioral — How customers are using your products and what type of user they are. It can also include customer transactional behavior, such as browsing, spend by category, sentiment and price points.

Segmentation is a fundamental element of strategic marketing and is part of an approach called STP, which stands for:. Market segmentation is usually based on data coming directly from the market. It may be primary market data or data mining of information already gathered by the company itself e.

Although market segmentation might seem to be intuitive or obvious, sometimes the market segmentation that emerges during an analysis turns out to be quite a surprise. It may turn out that the characteristics that were selected initially differentiated the market only slightly, and totally different variables suddenly come into play. It can completely change the attitude towards the market and the approach to meeting consumer needs. For this reason, the choice of criteria is an extremely important part of the market segmentation process.

Keep in mind that segmentation needs to be carried out on a regular basis. The frequency depends on how fast the market in which our company operates tends to change.

Potential conclusions are usually helpful to many departments within the organisation new product development, marketing and advertising, customer service, etc. The results of segmentation can also be used to enrich other studies carried out for the company. For example, the characteristics of particular segments are sometimes used as criteria for recruitment in qualitative research, that allow us to deepen the knowledge of the segments.

So we can safely say that a good market segmentation becomes an integral part of the strategy of modern companies. Therefore it is worth doing and doing well. Our long-term client, a New York-based consultancy, approached PMR with a project, which entailed conducting an interview with potential investigators.

Challenge: How do doctors evaluate the tested medical product? An international pharmaceutical company specialising in the development of innovative lifesaving …. Challenge: What does the local market look like? An international research company needed local support to conduct online interviews with ….

Skip to content. The days of selling a product to a mass audience are long gone. And while most people seemingly want the same thing — a good product at a reasonable price — in practice, meeting their needs can take many shapes and forms. How does market segmentation work? We would advise, though, to get automated from the beginning. Forget spreadsheets — choose market segmentation software to measure and streamline your marketing strategy; as you grow, the technology will scale with you.

Innovative features such as XM Directory allow you to build your own customer segments and start personalizing experiences at scale based on the rich insights into your critical customer groups.

If you want to get a feel for your market segmentation upfront, before taking a step towards a streamlined and integrated system, trust us to take you through the research with our Market Segmentation Research service.

You get the same level of expertise and guidance that comes from helping hundreds of brands go through the market segmentation process, plus our advice and best practice tips at the end to keep you moving forward. Find out more here. Download now. Market Segmentation. Brand Experience. Brand Equity.

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Products Back Products. Back Resources What is XM? Back What is XM? Experience Management. Try Qualtrics for free Free Account. What is market segmentation? The benefits of market segmentation Companies who properly segment their market enjoy significant advantages. Other benefits include: Stronger marketing messages : You no longer have to be generic and vague — you can speak directly to a specific group of people in ways they can relate to, because you understand their characteristics, wants, and needs.

Developing effective marketing strategies : Knowing your target audience gives you a head start about what methods, tactics and solutions they will be most responsive to. Better response rates and lower acquisition costs : These will result from creating your marketing communications both in ad messaging and advanced targeting on digital platforms like Facebook and Google using your segmentation. Attracting the right customers : Market segmentation helps you create targeted, clear and direct messaging that attracts the people you want to buy from you.

Increasing brand loyalty : when customers feel understood, uniquely well served and trusting, they are more likely to stick with your brand. Differentiating your brand from the competition : More specific, personal messaging makes your brand stand out. Identifying niche markets : segmentation can uncover not only underserved markets, but also new ways of serving existing markets — opportunities which can be used to grow your brand.

Driving growth : You can encourage customers to buy from you again , or trade up from a lower-priced product or service. Enhanced profits : Different customers have different disposable incomes; prices can be set according to how much they are willing to spend. Become a pro at market segmentation, by downloading this eBook The basics of segmentation Understanding segmentation starts with learning about the various ways you can segment your market.