Financially Responsible Marketing

The Importance of Developing Segmentation’s of your Target Audience

Posted by on Mar 6, 2014

Once you have conducted a situational analysis and identified the market, it is now time to start the first part of the segmentation, targeting, positioning process: segmentation. This involves dividing up your market into components so you can identify potential buyers of your product. It allows you to determine niches with specific needs and deliver more focused and effective marketing messages. The first thing to remember is that in order for your segmentation strategy to be successful it must be consistent with and derived from the firm’s mission and objectives that are outlined at the beginning of the marketing plan. It also must be consistent with the organization’s current situation—its strengths, weaknesses, opportunities and threats (SWOT).

The most common and effective way to segment the market is to use a formal approach. This is where you will develop descriptions of the different segments, their needs, wants, and characteristics, which will help you better understand the profile of the customers in each segment. With this information, your company can distinguish the customer similarities within a segment and dissimilarities across segments.


Segmentation Methods


  • Geographic segmentation organizes customers into groups on the basis of where they live. Thus, a market could be grouped by country (Canada, Germany, China), by region (Atlantic Canada, Western Canada), by areas within a region (province, city, neighbourhoods, area codes), or by climate and topography (warm, cold and snowy, mountainous).
  • Geographic segmentation is most useful for companies whose products or services satisfy needs that vary by region



  • Demographic segmentation groups consumers according to easily measured, objective characteristics such as age, gender, income, education, race, occupation, religion, marital status, family size, family life cycle, and home ownership. These represent the most common means to define segments because they are easy to identify.
  • For example, car makers often consider market segments defined by their income levels. Whereas Kellogg’s uses age to define segments for its line of breakfast cereal. Fruit Loops and Rice Krispies are for kids, while Special K and All-Bran are for adults.
  • Demographic segments are easy to reach. For example, if your company wants to advertise to kids, you can easily determine the best time for TV ads would be during cartoons shown on weekend mornings or after school on weekdays



  • Determining psychographics involves knowing and understanding three components: self-values, self-concept, and lifestyles
  • Self values help determine the benefits the market segment may be looking for from a product. The underlying, fundamental, personal need that pushes a person to seek out certain products or brands stems from his or her desire to fulfill a self-value, or goal. How does that underlying goal affect the individual? Through self-concept, or the image people have of themselves.
  • Lifestyles are how we live our lives to achieve goals. Someone with a strong sense of belonging who sees himself as a “people person” will probably live in a well-populated area that allows for many activities with like-minded people.
  • Through these clubs and activities, your company has a built in group with similar interests and buying desires that it can easily target
  • For example, Lululemon markets their sportswear clothing based not on demographic segments but on the philosophy of a healthy, balanced, fun-filled lifestyle.


Using Multiple Segmentation Methods

Because “birds of a feather flock together,” it could be advantageous for your company to use a combination of geographic, demographic, and lifestyle characteristics, called geodemographic segmentation, to classify customers. Segmenting by demographics and geography is easy because information about who the customers are and where they are located is readily available, but these characteristics don’t help marketers determine their customer needs.

Knowing what benefits customers are seeking or how the product or service fits a particular lifestyle is important for designing an overall marketing strategy, but segmentation methods present a problem for marketers attempting to identify specifically which customers are seeking these benefits. Thus, by using a combination of demographic and geographic segmentation methods, your firm can more easily identify and target marketing communications to your customers, and by using benefits or lifestyles it can design the product or service and the substance of the marketing message. Consumers in the same neighbourhoods tend to buy the same types of cars, appliances, and apparel, shop at the same types of retailers, and behave similarly to media and promotions.


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