How to Create a Market Segmentation Strategy

How to Create a Market Segmentation Strategy


Market segmentation is an important element of any profitable marketing strategy. Why? Effectively, simply take into consideration your personal goal market. 

Hopefully, everybody in your goal market has an curiosity in your services or products. However are all your potential clients the identical age, intercourse, or situated in the identical area? Have they got the identical earnings and training ranges? Do all of them have the identical ache factors, wants, or wishes?

In case your market is like most, your audience consists of a big number of potential clients. Due to this, a technique that doesn’t consider the range of traits throughout the goal market runs the danger of lacking the mark most of the time. 

As professional marketer Seth Godin mentioned, “Your buyer isn’t ‘Everybody’.” It’s good to get particular about who you’re speaking with in the case of your advertising. That is the place a market segmentation technique comes into play. 

What’s a market section?

A market section is a gaggle of people inside a bigger goal market who share a specific set of traits. Most goal markets may have quite a few totally different market segments, or teams that share related traits. 

For instance, if we had been to have a look at the athletic footwear market, we’d uncover quite a lot of totally different segments: 

  • One section could be made up of true athletes who’re coaching onerous within the fitness center each day
  • One other section could also be on the lookout for a cushty pair of footwear to put on when strolling their canine
  • Some clients could also be fascinated about model to impress others of their social group 
  • Others could be on the lookout for stability to scale back ache and forestall falls 

The highschool basketball participant and retired grandmother each have an curiosity in athletic sneakers, however for very totally different causes. Every section represents clients with totally different traits, wishes, wants that may affect their expertise when searching for, buying, and utilizing the product. 

What’s segmentation and why is it necessary in advertising? 

Segmentation is the method of taking a broad market and breaking it into varied teams (A.Ok.A. segments) in line with particular traits, wishes, or wants. 

Take a brewery for instance, their broad goal market consists of shoppers who wish to drink good beer and eat pub model meals. When trying on the broad goal market, nonetheless, many segments exist within the market. 

They could determine a section that eats vegetarian, one that wishes to drink IPAs, one that wishes to spend much less and drink extra, one which prefers intelligent names for the beers, and one which likes to deliver their entire household out for dinner. 

So, why is segmentation necessary for advertising groups? Effectively, understanding segments can assist in a number of methods. To summarize, we will say it like this: 

Segmentation helps entrepreneurs make the fitting gives to the fitting clients with the fitting message.

Returning to our brewery instance, let’s say the advertising group recognized a useful section of their market made up of households with excessive incomes and younger kids. The advertising group would possibly strive to attract this viewers towards their enterprise by focusing their advertising efforts on this specific section. 

For instance, the entrepreneurs would possibly create a proposal for a children meal or add some out of doors seating with a small playground set for teenagers. They’d place their ads in locations the place mother and father will see them, and of their messages, they’d give attention to the household pleasant ambiance and would possibly present pictures of households consuming out. 

Widespread sorts of market segmentation 

There are limitless methods to section any market. On the subject of your distinctive goal market, you need to outline the way you wish to section based mostly in your distinctive wants and objectives.

Getting artistic along with your segmentation can assist you unleash new worth in your market, however when you’re on the lookout for some fast standards, most of these segmentation are positive to be helpful: 

  • Geographic segmentation: The place is your viewers situated geographically? Do they dwell within the metropolis or in a rural space? What languages do they converse? 
  • Demographic segmentation: What are the age teams, religions, sexes, earnings ranges, training ranges, or household sizes? 
  • Psychographic segmentation: What existence, pursuits, hobbies, opinions, or influencers outline your viewers? 
  • Behavioral segmentation: The place are viewers members at of their purchaser journey, what model loyalty traits do they possess, what worth sensitivity exist, what’s the buying model, and the way excessive is their utilization charge based mostly on habits? 
  • Media desire segmentation: What social media platforms, tv networks, newspapers, engines like google, and different media retailers does the viewers interact with? 
  • Profit segmentation: What do viewers members hope to get out of the providing? What are their wishes, ache factors, and desires? 

B2B segmentation & firmographics 

Segmentation for B2B (Enterprise-to-business) entrepreneurs differs from the type of segmentation B2C (business-to-consumer) entrepreneurs do. Whereas B2C clients give attention to the traits of their particular person clients, B2B entrepreneurs give attention to firmographics and enterprise wants. 

Firmographics are traits of a enterprise group that can be utilized as standards for segmentation.As an alternative of utilizing Demographics, psychographics, or behaviors like B2C entrepreneurs, B2B entrepreneurs would possibly give attention to different standards resembling: 

  • Trade
  • Variety of workers 
  • Location 
  • Income
  • Buying energy 
  • Buyer lifetime worth
  • Buyer profitability 
  • Product utilization

With a view to make efficient advertising choices, B2B entrepreneurs additionally want to know the shopping for course of and resolution making standards throughout the companies. This can make sure the advertising expertise is designed particularly for the enterprise they’re approaching. 

A 4-step market segmentation technique & market segmentation instance 

On the subject of segmenting your viewers to arrange for a focused marketing campaign, instinct and luck will solely take you to date. Companies which have essentially the most success with buyer segmentation have a transparent technique in place. 

Earlier than we get into the arms on work of creating a technique, let’s attempt to provide you with a definition for Market Segmentation Technique. A working definition would possibly go one thing like this: 

A market segmentation technique is the method via which you determine, set up, analysis, and goal a selected section of a broad goal market. 

Constructed into this definition, we will pull out a 4 step course of for creating a segmentation technique. 

  1. Establish the most important segments inside your broad buyer base–On this step, you’ll do some broad market research to uncover what sorts of traits, wishes, and desires exist inside your goal market. 
  1. Manage the viewers into segments–Right here, you’ll outline your segments based mostly on varied options and traits inside your market. 
  1. Analysis and select a section–Then, you’ll do some deeper analysis on every section to determine which you’d prefer to give attention to in your advertising marketing campaign. 
  1. Create gives, craft messaging, and select venues– Primarily based in your analysis, you’ll create gives for the section you wish to goal, craft the messaging you’d prefer to strategy them with, and work out what venues will present essentially the most publicity on your goal section. 

Let’s have a look at every step and use Semrush’s One2Target tool to uncover some market segments. For this instance, we’ll return to the athletic footwear market. 

Establish your market’s main segments 

The broadest degree of your market segmentation technique is the identification course of. Right here, you’re exploring your broad market to higher perceive what teams exist inside your goal market. There are numerous methods to do that, together with: 

  • Authorities knowledge sources
  • Publicly accessible knowledge or experiences from analysis companies 
  • Web site analytics 
  • Social media platforms 
  • Market analysis software program 

For this instance, we entered into Semrush’s One2Target and selected and to outline our market. 

Trying on the Demographics Report we found that the primary section of the viewers for these domains is males aged 25 to 34. 


Leaping over to the Socioeconomics Report, we would additionally collect some knowledge associated to family sizes and incomes. On this report, it’s clear the most important section of our goal market consists of households of 3-4 folks in a low earnings bracket. 


At this stage of the method, nonetheless, you wish to look past your largest section and search to determine and attention-grabbing tendencies within the knowledge. For instance, in every of the domains, there’s a big proportion of feminine viewers members. We’d additionally notice is in style amongst youthful audiences, whereas adidas is the preferred amongst audiences within the 65+ vary. Likewise, there’s a big section of our goal market that dwell in households of two with a center earnings vary. 

Any of those options of our chosen market might change into a section we wish to goal. 

Manage the market into segments 

Primarily based on the info we gathered within the final part, we will pull out a minimum of three segments of our market we would goal in a future marketing campaign. Listed here are three choices: 

  • Males aged 25-34 residing in households of 3-4 with center to low incomes 
  • Females aged 45-54 who dwell in 2 individual households and earn a medium earnings 
  • Males aged 18-24 preferring Puma sneakers with medium to excessive incomes residing in 5-6 individual households 

We recognized these segments based mostly on tendencies that emerge within the knowledge depicted on the graphs within the final part. As a more in-depth look, right here’s the place we bought the section of males aged 18-24 preferring Puma sneakers, have medium to excessive incomes, and dwell in 5-6 individual households. 


Analysis and select a section to focus on 

After doing a little deeper analysis in your recognized segments, you’ll wish to select the section you wish to goal in your advertising marketing campaign. The section you select to focus on will rely in your assets and your objectives. 

When selecting a specific section, you could wish to take into account: 

  • Measurement–Is it massive sufficient to assist your objectives? 
  • Development potential–Is the section going to develop sooner or later in dimension or buying energy? 
  • Buying energy–Will the section have the assets to buy your product? 
  • Wants and needs–Is the section’s wants and needs aligned with what it’s a must to provide? 
  • Competitors–What’s the degree of competitors throughout the section? Can you differentiate your product? 

The Hooley’s Phase Attractiveness and Useful resource Energy Framework 

The Hooley’s Phase Attractiveness and Useful resource Energy Framework is one other approach to determine which section is your best option on your subsequent marketing campaign. The framework helps you determine essentially the most engaging market segments and your skill to compete for these segments. 

The framework consists of two dimensions: section attractiveness and useful resource energy. 

The section attractiveness dimension evaluates the potential of a specific market section, whereas the useful resource energy dimension evaluates an organization’s skill to compete in that section.


Phase attractiveness is evaluated based mostly on the next standards:

  1. Market dimension and progress potential
  2. Profitability and potential returns
  3. Aggressive depth and rivalry
  4. Entry limitations and ease of entry
  5. Buyer wants and needs
  6. Compatibility with the corporate’s mission and values

Useful resource energy is evaluated based mostly on the next standards:

  1. Monetary assets
  2. Advertising capabilities
  3. Human assets and expertise
  4. Technological capabilities
  5. Distribution and provide chain capabilities
  6. Model fairness and popularity

With this knowledge, you possibly can weigh the potential of assorted segments to determine that are the perfect, which want enchancment, that are poor prospects, and that are your worst prospects. 

Create gives, craft messaging, and select promoting venues

After making a remaining resolution on which section to focus on, you’ll must resolve the way to design your gives, the way to talk with the viewers, and the place to share your messages in order that they attain your required viewers. 

On the subject of designing your gives, take into consideration the section’s main ache factors and their largest wishes. Are they tight on disposable earnings? Do they need one thing to do with their children? Are they on the lookout for one thing sensible or are they searching for leisure?

These sorts of questions will assist you concentrate on what sort of provide to make to achieve their curiosity. 

When creating your messaging, use language that the section makes use of of their every day lives. For example,you could wish to keep away from slang or stylish language with an older viewers. In case your promoting comprises pictures or sounds, be certain they resonate with the section’s on a regular basis expertise. 

Lastly, select promoting venues the place your viewers section spends their time. A method to do that is with the Additionally Visited desk in One2Target’s Audience Overlap Report.

Let’s say we needed to run some voice adverts on music streaming web sites. We might filter the Visited Domains desk to point out solely music based mostly domains. Right here’s a have a look at’s and’s additionally visited pages within the music class. 


Discover the variations within the lists of domains provided by One2Target. For Adidas, which had an older viewers, Spotify is the highest visited area within the music class. So if we had been focusing on our section of ladies aged 45-54, we would place adverts right here. 


Puma, however, had a youthful viewers. Their high music websites had been, and decrease down the record,, a music streaming service extra in style amongst youthful audiences. These could be our decisions if we had been focusing on our youthful section. 

Suppose long run along with your market segmentation technique 

Viewers segmentation is a robust instrument that may aid you enhance your advertising plan and extra successfully attain your audience. By breaking your market into smaller, extra particular teams based mostly on key traits, you possibly can create extra related and customized advertising campaigns. 

It’s necessary to recollect as you progress towards the long run that markets change and audiences evolve. Due to this fixed change, it’s necessary to return to your segmentation technique frequently to ensure you’re nonetheless chatting with your viewers’s wants. This can let you construct longer and stronger relationships along with your clients, improve engagement, and in the end drive gross sales. 


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