Get a quick refresher on market segmentation

Market segmentation is a strategy for dividing a target audience into specific groups to create tailored and personalized outreach campaigns.

You may be familiar with the idea of market segmentation, but you’re looking for more information on different types of segmentation or are unsure of how to implement it effectively into your marketing strategy.

In this article, you’ll learn how your company can grow and improve its products and services by segmenting your target audience and creating tailored and personalized outreach campaigns. Specifically, we will cover:

• What is market segmentation?
• Types of market segmentation
• Benefits of market segmentation
• How to get started with market segmentation

What is market segmentation?

Market segmentation is the process of a business separating its target market into subsections or groups to make marketing efforts more refined. Once a company divides its market into segments, it can closely tailor its products to the needs, desires, uses, and budgets of the clients and customers.

Market segmentation also allows businesses to concentrate their resources, money, time, and effort on a profitable market, allowing it to grow in numbers, usage, and value.

Follow these guidelines to implement a market segmentation strategy:

• Define and segment your market. A good segment should be easy to identify, the customers within it should be reachable in a way that is actionable, and it should not be too small.
• Understand your market. You can use online surveys to receive answers from customers to get to know your target audience in detail.
• Build your customer segment. After you collect the responses, you will need to perform data analysis to create a segment unique to your brand.
• Test your strategy. Test the survey data you analyzed with your target audience so you know whether you’ll need to make any strategy changes.

Types of market segmentation

There are four main types of market segmentation:

• Behavioral, which focuses on specific reactions and the way customers go through their purchasing processes and their habits.
• Geographic, which involves creating different groups of customers based on geographic location.
• Demographic, which divides the market by demographic variables such as age, gender, income, occupation, or nationality.
• Psychographic, which groups the target audience based on their behavior, lifestyle, attitudes, and interests.

Benefits of market segmentation

Knowing what market segmentation is, how it works, and what the benefits are for your organization can help you implement this strategy effectively. Some of the many advantages of market segmentation include:

• Meeting the needs of the customer. By identifying a small segment, you can better serve the immediate needs of that group.
• More effective marketing efforts. As marketing becomes more accurately targeted, it will also become more effective.
• Identifying underserved segments. By segmenting, you might find that there is an entire group of customers who are highly profitable and not served by competitors.
• Focused marketing. Marketing is able to be stronger and more targeted when the market is segmented.

Get started with market segmentation

Market segmentation helps a business better target its marketing efforts. Begin implementing this method in your company by identifying segments in your target market that are actionable and accessible.

You’ll need to collect data from your customers and target market, and then analyze it to better understand their needs. Adobe Analytics can help you do this. More than an analytics solution, it takes data from any point in the customer journey and turns it into a real-time insight that guides your next best action.

Watch the product overview video.

Another resource you can use to do better market segmentation is Adobe Audience Manager. This data management solution collects and merges information from practically any source, building intelligent audience segments that give you a complete view of your customers.

Watch the two-minute product tour.