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Cesar Fletes Sanchez. Anurag Donge. A segment is a group of people with similar needs who are part of your whole market. For example, you may be trying to get your organisation better known by the general public. But 'general public' is too large and generalised to help you achieve this. So by dividing the whole market into segments of people who you think are particularly important for your organisation you can reach them more effectively. For example, for an organisation in Halifax their whole market is the people of Halifax.
Segments of this market might be:. Normally an organisation has too many segments it would like to reach and 'targeting' is about choosing which ones to prioritise. Some non profit organisations prefer not to make segmentation and targeting decisions but this is dangerous because by trying to meet everyone's needs you can end up with a generalised, low quality activity meeting no-one's needs very well.
In particular there are three reasons why you should segment and target. Segmentation and targeting will help you to:. A development NGO working overseas might identify the following segments which prompt choices of which to target:.
It should also have made clear the broad area in which the organisation is working, for example, deaf people, cancer, steel workers, Methodists, savers, etc. But even if it has done this, the group you are trying to serve your market is nearly always too big for the resources especially money you have available. While mass marketing tactics are still able to get results, the assumption that simply everyone will be interested in buying what you are selling is a time-consuming, inefficient and expensive strategy.
However, for segmentation to be used correctly, it needs to take into account that different customers buy for different reasons, and marketers need to intelligently apply a number of considerations that could affect their purchasing decisions.
There are many reasons why companies fail at targeting the correct customers. It could be an assumption that segmentation is based entirely on demographics, or that segments have been defined too broadly.
It could be that there is no strategic goal, like lead acquisition or customer retention. Or, it could be that the lack of a Single Customer View and siloed data has resulted in an inaccurate or misinformed understanding of your consumer base. A more sophisticated approach to segmentation demands contextual understanding and a view of the bigger picture, Big Data sample sizes and advanced analysis tools to define groups.
While you are unlikely to use all of them for every one of your marketing campaigns, customers are often grouped under the following categories:.
By understanding psychographics, marketers can develop content that is more relatable to their customer segments. Demographic segmentation can merge very well with psychographic segmentation.
Market segmentation makes it easier for marketing teams to develop highly targeted and effective marketing campaigns and plans. When a company has a focus on specific segments, they ensure they are targeting the right segment with the right product which will see the greatest ROI. Having defined segments enables companies to satisfy a variety of customer needs by offering different bundles and incentives.
When a company is focusing on a specific segment, their market competitiveness increases. Which in turn will lead to a higher ROI.
The company is focused on specific segments and learns everything they need to know about that segment, to market their products to them. With geographic segmentation as discussed earlier, market expansion is possible immediately. When a company understands their segments and how to market to a segment in a particular location, they can expand immediately into another nearby location. If segmentation is based on demographics, then once the company knows their demographic segment they can expand in that segment with similar products.
Even when product features and benefits are the same, it is important for companies to target segments with specific communication. For example, if your segment was senior engineers, they may respond better to technical information about a product in the form of white papers or infographics, but a project manager might respond better to information regarding cost savings, efficiencies etc in the form of a blog, case study or video.
Messaging will be different for different segments. Platforms which are used to target different segments will be different also. The key is to understand your segments and target communication relevant to them on the relevant platforms.
When marketers use market segmentation it makes planning campaigns easier, as it helps to focus the company on certain customer groups instead of targeting the mass market. Segmentation helps marketers to be more efficient in terms of time, money and other resources. Market segmentation allows companies to learn about their customers.
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