Market Segmentation

The basic goal of segmentation is deceptively simple yet the vast majority of segmentations fail

Done properly, market segmentation is one of the most powerful weapons available to business leaders.  Whether pricing or bringing a product to market, crafting a positioning strategy or strategically aligning an organization to match targeted markets, segmentation has the potential to be a competitive game changer.

The problem is, despite its benefits and deceptively simple goal – to identify groups of people who are similar to one another, yet differ from other groups in ways relevant to the marketing mix – the path to creating successful, actionable market segmentations is riddled with potential pitfalls and, the sad fact is, most segmentation research is considered a failure and bad investment.   This is even more so true when the segmentation has broad strategic implications, impacting a company’s long term strategy, requiring stakeholder buy-in and organization alignment.

Customized Solutions

Strategic market segmentation programs identify segments that drive long term business strategy and have the potential to impact the entire organization, yet oftentimes, segmentation goals are more focused on a specific marketing objective.

Strategic Market Segmentation

When the segmentation drives long term strategy and investment spending.

Strategic segmentation is the ultimate “outside-in” approach to effective marketing and business growth.  It involves identifying segments that will drive long term investment decisions and marketing programs for each targeted segment.  In order to be successful, strategic market segmentations require a process during which an organization develops a perspective on a market that can be leveraged for long term strategy development.

Strategic market segmentation is much more than a research “project.”  It operates at the intersection between marketing and research and, more than any other research activity, has the potential to impact all aspects of an organization.

Using our multi-stage SegPro process

  • Mitigate the risks of a failed segmentation
  • Develop actionable segmentation solutions for strategic planning and market development and tools to reach them
  • Create alignment throughout the organization

Focused Market Segmentation

When the segmentation directs targeted communications and product development

Oftentimes segmentation goals focus on a specific marketing or product line objective and do not require the cross-functional buy-in and consensus building that is necessary with strategic segmentation programs.   Which customer segments should you target with a new product introduction?  What message points will achieve the greatest response among primary and secondary target segments?   How much price latitude do you have across segments?  What channel strategy should you use to achieve the greatest exposure among targeted segments?

We have developed well over one hundred segmentation solutions, helping companies

  • Create actionable segment solutions and prioritize target segments
  • Determine the motivational and behavioral characteristics that differentiate segments and guide what you say and the products and services you offer
  • Develop a typing tool to classify customers and prospects into segments