er now we will talk about market segmentation, that is, how to divide customers into groups to better target them. It’s a bit like sorting a jigsaw puzzle – if you put them in the right piles, it’s easier to put the whole picture together. Ready? Well, here we go!
Market segmentation – how to divide customers to better target them
Imagine you own a shoe store. You can, of course, sell the same models to all customers, but does that make sense? After all, the needs of a teenager who is looking for fashionable sneakers will be completely different from those of a businessman who needs smart oxfords. This is why market segmentation is so important – it allows you to tailor your offer to specific customer groups.
What is market segmentation?
Market segmentation is the division of customers into groups (segments) with similar needs, behaviors or characteristics. It helps you better understand who your customers are and how to reach them. It’s not art for art’s sake – it’s about making your marketing efforts more precise and effective.
Why is segmentation important?
- Saves time and money – Instead of shooting blindly, you focus on those customers who are most interested in your offer.
- Better tailored offerings – You know what the group wants, so you can adjust the product, price or communication.
- Building loyalty – When a customer feels that you understand their needs, they are more likely to buy and recommend you to others.
What are the segmentation criteria?
Segmenting customers can be done in various ways. Here are the most popular criteria:
- Demographics
This is a basic way of dividing – age, gender, occupation, education, income, etc.- Example: cosmetics brand L’Oréal has different product lines for teenage girls (e.g. Garnier) and mature women (e.g. Lancôme).
- Geography
Where a customer lives can make a huge difference.- Case in point: McDonald’s in India offers vegetarian dishes because most of the population doesn’t eat meat.
- Psychography
This is a division based on lifestyle, values, interests or personality.- Example: Patagonia, a clothing brand, focuses on customers who care about the environment. Their communications are full of eco-friendly touches.
- Behavior
How does the customer use the product? How often does he buy? What are his buying habits?- Example: Netflix divides users into those who watch series daily and those who turn on the platform only on weekends. This allows it to offer personalized recommendations.
How to perform market segmentation?
- Gather customer data
You can use surveys, interviews, social media data or sales analysis. The more information, the better. - Divide customers into groups
Create segments based on the collected data. Remember that each group should be:- Measurable – You can determine its size.
- Accessible – You can reach it.
- Significant – It is large enough to be worth handling.
- Differentiating – Differentiates from other groups.
- Create personae
A persona is a fictional representative of a segment. Give him/her a name, age, occupation, hobbies and describe his/her needs. This will make it easier for you to think like your customer.- Example: Persona “Anna, 35 years old, mother of two, works in a corporation, looking for quick and healthy dinner recipes.”
- Match your strategy to your segments
Each group may require a different approach.- Example: a car brand might advertise family SUVs in parenting magazines, and sporty models on car portals.
Examples of effective segmentation
- Nike
Nike divides its customers into athletes, amateurs and people who just want to look fashionable. It has different products and communications for each group. - Starbucks
Starbucks segments customers based on lifestyle. It offers takeaway coffee for the busy, and cozy interiors and free Wi-Fi for those who like to spend time in the coffee shop. - Amazon
Amazon uses behavioral segmentation to suggest products based on purchase history. If you bought a book about cooking, you’ll see recommendations for pots or spices next time you shop.
Summary
Market segmentation is a tool that helps you better understand your customers and tailor your offer to them. With it, you don’t have to waste energy trying to please everyone – you can focus on those who are really interested in your product.
Remember that segmentation is not a one-time activity. The market is changing, customers are evolving, and you need to stay current. Update your segments regularly and adjust your strategy accordingly.
