Definition:
Segmentation refers to the process of defining and subdivision of a large homogeneous market into clearly identifiable segments that possess similar needs or characteristics. Their goal is to design a kind of marketing mix that exactly suits the expectations of customers in the target segment.
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How to do a segmentation in marketing
This marketing strategy consists of dividing a broad target market into subsets of consumers, companies or countries that have, or are perceived as common, needs, interests and priorities, and then design and implement strategies to target them. Market segmentation strategies are generally used to further identify and define target customers, and provide supporting information for elements of the marketing plan, such as positioning, to achieve certain goals. Companies can develop product differentiation strategies, or a differentiated approach, referring to specific products or product lines based on demand and attributes specific to the target segment.
Few companies are large enough to cover the needs of an entire market, most must section the total demand into segments and choose those in which the company is best equipped to handle them. For example, a sports shoe company might have market segments for basketball players and long-distance runners. As distinct groups, basketball players and long-distance runners will respond to very different advertisements.
Basic segmentation strategies
The four basic market segmentation strategies are based on:
- Behaviour.
- Demography.
- Psychography.
- Geography.
Factors affecting segmentation
In addition, there are four basic factors that affect market segmentation:
- Clear identification of the segment.
- Measure of the effectiveness of its size.
- Its accessibility through promotions.
- Your adjustment to the company’s policies and resources.
Segmentation in Web Analytics
In tools such as Google Analytics, segmentation is done through segments, which allow you to isolate and analyze subsets of data in order to examine and respond to the trends of the components of a page.
Frequently asked questions about Market Segmentation
What does Market Segmentation mean in digital marketing?
Market Segmentation refers to the concept described in this glossary entry: Definition: Segmentation refers to the process of defining and subdivision of a large homogeneous market into clearly identifiable segments that possess similar needs or characteristics. Their goal is to design a kind of marketing mix that exactly suits the expectations of customers in the target segment. It gives teams a shared vocabulary for analysing digital projects.
When should teams pay attention to Market Segmentation?
Teams should review Market Segmentation when it affects acquisition, measurement, user experience, content, automation or campaign performance. The important step is to connect the definition with a real decision.
How is Market Segmentation used in a digital strategy?
Market Segmentation is used by translating the concept into practical checks: where it appears in the funnel, which data or channel is involved and whether it needs optimisation, monitoring or documentation.
What is a common mistake when interpreting Market Segmentation?
A common mistake is using Market Segmentation too broadly. It is better to verify the context, the tool or the metric involved before making strategic or technical conclusions.