How to Identify Your Market Segments

If you are looking for ways to improve the effectiveness of your marketing strategy, it’s key that you begin by segmenting your target market; no matter your industry or service. Segmenting your audience allows you to pinpoint specific messages in order to drive purchases and engagement.

In this article, we will discuss what a market segment is, how they work, how to differentiate the segments and how to evaluate your segmentation decisions.

What is a market segment?

The term market segment refers to a group of people who have been categorised together for marketing purposes. These people are usually grouped together based on their characteristics, location, lifestyles and interests. Businesses can then use the segments they’ve created to develop their marketing strategies, allowing them to target specific audiences, behaviours and products. Once you know what your target customer needs, you’ll be able to invest time, money, and effort to provide that for them.

How does target marketing work?

Targeting a specific market and category of people does not mean that you are excluding people who do not fit your business’ criteria. Instead, it allows you to focus your marketing strategy and advertising on segments of people who are more likely to make a purchase or visit your business. Target marketing is a much more affordable, efficient and effective way to reach potential clients and generate business. 

What are the different types of Market Segmentation?

There are many different types of market segments and these can vary depending on your industry, business goals and business type. However, below are the four main methods of market segmentation, which can also be split into further niche segments if you wish to target your customers in greater detail.

1. Demographic segmentation

Demographic segmentation is one of the most commonly used segments within marketing; it is also the easiest and most observable. The segments include qualities such as age, occupation, nationality, gender, marital status etc. 

Demographic segments can be combined with other types in order to narrow down and target your specific market even more effectively. A benefit of using this type of segmentation is that the information is relatively accessible and potentially free to obtain.

2. Behavioural segmentation

Behavioural segmentation refers to a process in marketing which divides customers into segments depending on their behaviour patterns when interacting with a particular business or website.  These can be segmented based on loyalty to your business, actions whilst visiting your website and their shopping habits. 

Segmenting your audience based on their behaviours allows businesses to have a clearer understanding of their customers, enabling you to create campaigns, tailor products and services and steer your marketing strategy to cater to those actions.

3. Geographic segmentation

Geographic segmentation is one of the simplest forms of segmentation and it is used to separate customers based on their location. The most basic form of geographic segmentation is to split the categories according to their country, county/state and postcode. 

From the main geographic segments you will be able to identify customers based on the characteristics of the area they live in; urban, rural or suburban, the climate, language and typical interests. Geographical segmentation is perfect for both small and large organisations, especially if you are trying to target customers across a large area.

4. Psychographic segmentation

Psychographic segmentation is very similar to behavioural segmentation, however, it is based more on mental and emotional characteristics. Examples of these include religion, beliefs, values and lifestyles. This information adds detail to a buyer's or visitor's persona, this can then guide product development and marketing campaigns. 

Compared to demographic segmentation, this can be a much harder segment to identify; however, psychographic marketing enables you to engage with multiple target audiences in the ways that will make the biggest impact for each one.

Evaluate your decision

It’s essential that you don’t segment your target market too much. Remember, you can have more than one target market, allowing you to tailor your campaigns and messaging. Evaluating each segment ensures that your company doesn't waste resources on segments that won't buy your products.

Once you’ve decided on your marketing segments, be sure to ask yourself the following questions:

• Are there enough consumers who fit my target criteria?

• Will they benefit from or enjoy my product or service?

• Is my product or service within their budget?

• Will I be able to reach my target audience effectively with my marketing campaign?

• Can I successfully measure my ideal market segment?

If your segmentation approach fails to answer any of these questions and factors, you may slow down or even halt the effectiveness of your marketing and business strategy. If this is the case, you must re-evaluate and refine your decisions. However, with all of these factors successfully in place, using marketing segmentation can allow you to engage and retain a prosperous target audience for your business.

How can Serenity Digital assist with marketing segmentation?

At Serenity Digital we will help you to understand what will be the best route to market, how to make the most of your budgets, how to attract your ideal consumer and how to compete with your competitors. We will also consider the messaging of your campaigns and what mediums it is most suited to, in order to attract and target your specific audiences. 

Start a conversation with one of our Serenity experts to find out how we can help you with your businesses marketing segmentation.

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