Market segmentation is an essential tool for all brands, regardless of size, as it affects most aspects of the business.
In a nutshell, it is defined as how one selects which part of the market to target. It sounds simple, but it is one of the most challenging issues when representing a business. Let’s see why.
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What is market segmentation?
Imagine seeing a big cake (chocolate, why not?). Delicious. You’re dying to eat it. But as much as you initially think that you could swallow it whole, you realize that to enjoy this delicacy, you need to cut a portion.
Let’sLet’s transfer that idea to the market and your business. If the market is the whole cake, for you to “work” it, you will need to decide what portion of it you want to “eat.” That is, where will your focus be?
Why is market segmentation so relevant?
Let’sLet’s continue with the metaphor of the cake. What would happen if you tried to eat it whole? Beyond the stomachache, it would be clear that it is more than you can cover, right? The same goes for business.
Except for certain exceptions of very massive products (such as Coca-Cola), to make sound business decisions, it is necessary to focus, segment, and divide the market you are going to attack.
Why is this so relevant? Each market segment will have different characteristics, behaviors, and needs. Knowing these attributes will help you make correct business definitions for your target audience.
Some examples of those characteristics are:
- Demographics (age, income, educational level, etc.).
- Geographic (where they live and shop).
- Psychological (tastes and styles of that group of people).
- Behavioral (what do they look for when buying, where do they put their weight to decide whether or not to buy a product).
Something important to keep in mind is that these attributes are becoming more and more complex. A simple dichotomy no longer defines the characteristics of a segment (whether it is “A” or “B””) or by more basic variables such as “male” or “female.” For the gender response, for example, there are multiple options today.
So, it is essential to remember that to the attributes mentioned above, there are also (and increasingly) “soft” variables, such as personality and interests, which are essential to consider when defining your market segment.
How market segmentation influences your brand strategy?
Think of it like this: the better you know your audience, the better you will know what things will generate an impact on them and what will mobilize them to make purchase decisions.
It will help you a lot in the commercial definitions you have to make about your business. Let’sLet’s see some specific aspects of how this works:
About your production processes Knowing your market segment,
Understanding their needs, tastes, and purchasing behaviors can help you better define what type of products will be more successful among that group.
It can guide the selection of your product line or the manufacture of a new collection, for example.
About your online marketing strategy Market segmentation
It will be a crucial tool to define what kind of marketing campaigns can have superior performance with your audience.
Focusing on what works with your target will make your content and advertising strategies more effective and better position your brand among them. For example: What social networks do they consume? What kind of message will impact them the most? Knowing this will allow you to optimize your advertising investment on social networks.
About your after-sale service
Understanding the characteristics of your target audience can also help you define how to approach post-sale service with them.
What kind of attention will they be expecting? What behaviors can delight them? What things do you have to avoid at all costs?
Determining this on concrete and realistic basis will help you retain customers and turn them into brand promoters.
Examples of market segmentation
Let’sLet’s look at some examples of cloud stores that managed to achieve good market segmentation, creating brands that clearly define their specialties and know the characteristics of their audience.
Guru Market is an online store that specializes in healthy products. “Our mission is to offer you the best products on the market, in one place, so that you can eat rich and healthy.”
This brand knew how to focus, within the large online food shopping market, on a segment that is looking for healthy options and needs to facilitate the supply process at a single point of purchase.
In these examples of market segmentation, you can see how brands were able to build businesses that not only have a better position within their target audience but also manage to focus their resources and thus be more productive in their strategies. Are you ready to do this exercise with your brand?