Segmentation Research: Why is it so Important?
18 Sep 2019

Where did segmentation begin?

From the 1920s to the 1960s, mass marketing was a popular technique used to increase brand awareness. It coincided with the invention of the radio and television. At the time, there were only a few radio and TV channels available, so it was a common tactic to market to the most significant number of people as possible. Segmentation was not something in use.

However, this technique fell to the wayside as it is no longer cost-effective. There several ways to listen, watch, and consume media today (internet, social media, etc.) and our country is much more diverse than it once was. We now recognize that Americans have different beliefs, ethnicities, sexualities, and psychographic behaviors. As a result, smart marketing means targeting the appropriate audience for your brand. Marketing should not be one-size-fits-all.

A more efficient method to target consumers is to identify buyers who have a higher propensity to purchase your offering. The key is to determine how this group looks or acts similarly to advertise to them with the best message and media channel.  Segmentation divides consumers into distinct groups by these types of attributes: purchase propensity, demographics, psychographics, geography, and media habits. When creating segments, the key is to have a manageable number of groups. Also, each cohort should be large enough to warrant the investment.

How do you segment a market?

Market research can help you divide your prospects into the appropriate number of segments, as well as determine which groups have the highest market potential. Surveying your population of prospects is a vital way to understand your potential target audience better. It provides a method to map out the brand position and develop a deeper understanding of segments.

The value of segmentation research is that it directly ties into the usability of the findings. Proper research provides direction on how to bring the segmentation alive and off the page. The end game is to ensure that all segments are “actionable,” meaning a brand can easily target these prospects. The research will survey interest in yours and competitor’s brands, buying attitudes and behaviors, as well as media habits.

Using advanced analytics, you can cluster the respondents into these meaningful segments. Often, a segmentation study can project the actual market share size and the group’s potential sales. A segmentation study can even be used to segment your own customer/prospect database.

Once the segmentation study is complete, you will know which audience warrants investment and how to best advertise to them.

When the priority segments are determined, developing personas is also an essential way to bring your audience to life. Creating segment names, visually displaying the priority segments, and writing stories about these cohorts makes them more relatable. It allows you to understand why and how customers connect with your brand.

Want to learn more about Market Research? Here are some blog posts to check out!

  1. Sampling: The Importance of Good Sample
  2. I’m Just Not That Into You: Exclusivity or Bad Marketing?
  3. Is Your Research Stuck in the 1980s? Update Your Brand Tracker!
  4. Market Research Doesn’t Need to Be Boring – Improve Data Visualization

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