The way to Create a Market Segmentation Technique

Market segmentation is a vital part of any profitable advertising and marketing technique. Why? Nicely, simply take into consideration your individual 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 schooling ranges? Do all of them have the identical ache factors, wants, or needs?

In case your market is like most, your audience consists of a big number of potential clients. Due to this, a method that doesn’t think about the variety of traits inside the goal market runs the danger of lacking the mark most of the time. 

As skilled marketer Seth Godin mentioned, “Your buyer isn’t ‘Everybody’.” You want to get particular about who you’re speaking with in relation to your advertising and marketing. That is the place a market segmentation technique comes into play. 

What Is a Market Phase?

A market phase is a gaggle of people inside a bigger goal market who share a specific set of traits. Most goal markets could have a lot of 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 a wide range of totally different segments: 

  • One phase is likely to be made up of true athletes who’re coaching laborious within the health club every single day
  • One other phase could also be searching for a snug pair of footwear to put on when strolling their canine
  • Some clients could also be concerned with model to impress others of their social group 
  • Others is likely to be searching 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 phase represents clients with totally different traits, needs, wants that may affect their expertise when searching for, buying, and utilizing the product. 

What Is Segmentation and Why Is It Essential in Advertising? 

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

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

They may establish a phase that eats vegetarian, one that desires to drink IPAs, one that desires 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 essential for advertising and marketing groups? Nicely, understanding segments may also help in a number of methods. To summarize, we are able to say it like this: 

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

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

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 commercials in locations the place mother and father will see them, and of their messages, they’d deal with the household pleasant ambiance and would possibly present pictures of households consuming out. 

Widespread Varieties of Market Segmentation 

There are infinite methods to phase any market. On the subject of your distinctive goal market, it’s best to outline the way you wish to phase based mostly in your distinctive wants and objectives.

Getting artistic together with your segmentation may also help you unleash new worth in your market, however when you’re searching for some fast standards, these kinds of segmentation are positive to be helpful: 

  • Geographic segmentation: The place is your viewers situated geographically? Do they reside within the metropolis or in a rural space? What languages do they communicate? 
  • Demographic segmentation: What are the age teams, religions, sexes, earnings ranges, schooling ranges, or household sizes? 
  • Psychographic segmentation: What life, 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 value sensitivity exist, what’s the buying model, and the way excessive is their utilization price based mostly on habits? 
  • Media desire segmentation: What social media platforms, tv networks, newspapers, engines like google, and different media shops does the viewers interact with? 
  • Profit segmentation: What do viewers members hope to get out of the providing? What are their needs, ache factors, and wishes? 

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 deal with the traits of their particular person clients, B2B entrepreneurs deal with 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 deal with different standards equivalent to: 

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

To be able to make efficient advertising and marketing choices, B2B entrepreneurs additionally want to know the shopping for course of and determination making standards inside the companies. This can make sure the advertising and marketing 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 up to now. Companies which have essentially the most success with buyer segmentation have a transparent technique in place. 

Earlier than we get into the fingers on work of growing a method, let’s attempt to give you a definition for Market Segmentation Technique. A working definition would possibly go one thing like this: 

A market segmentation technique is the method by way of which you establish, arrange, analysis, and goal a particular phase of a broad goal market. 

Constructed into this definition, we are able to pull out a 4 step course of for growing a segmentation technique. 

  1. Determine the foremost segments inside your broad buyer base—On this step, you’ll do some broad market analysis to uncover what sorts of traits, needs, and wishes exist inside your goal market. 
  1. Set up the viewers into segments—Right here, you’ll outline your segments based mostly on numerous options and traits inside your market. 
  1. Analysis and select a phase—Then, you’ll do some deeper analysis on every phase to determine which you’d wish to deal with in your advertising and marketing marketing campaign. 
  1. Create gives, craft messaging, and select venues—Based mostly in your analysis, you’ll create gives for the phase you wish to goal, craft the messaging you’d wish to strategy them with, and determine what venues will present essentially the most publicity to your goal phase. 

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

Determine 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 raised perceive what teams exist inside your goal market. There are a lot of methods to do that, together with: 

  • Authorities knowledge sources
  • Publicly obtainable knowledge or studies from analysis corporations 
  • 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 phase of the viewers for these domains is males aged 25 to 34. 


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


At this stage of the method, nevertheless, you wish to look past your largest phase and search to establish and attention-grabbing traits within the knowledge. For instance, in every of the domains, there’s a big share of feminine viewers members. We’d additionally be aware is standard amongst youthful audiences, whereas adidas is the preferred amongst audiences within the 65+ vary. Likewise, there’s a big phase of our goal market that reside in households of two with a center earnings vary. 

Any of those options of our chosen market might grow to be a phase we wish to goal. 

Set up the market into segments 

Based mostly on the information we gathered within the final part, we are able to pull out no less than three segments of our market we’d goal in a future advertising and marketing 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 reside 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 traits 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 obtained the phase of males aged 18-24 preferring Puma sneakers, have medium to excessive incomes, and reside in 5-6 individual households. 


Analysis and select a phase to focus on 

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

When selecting a specific phase, you could wish to contemplate: 

  • Measurement—Is it massive sufficient to help your objectives? 
  • Progress potential—Is the phase going to develop sooner or later in measurement or buying energy? 
  • Buying energy—Will the phase have the sources to buy your product? 
  • Wants and desires—Is the phase’s wants and desires aligned with what it’s important to supply? 
  • Competitors—What’s the degree of competitors inside the phase? Can you differentiate your product? 

The Hooley’s Phase Attractiveness and Useful resource Power Framework 

The Hooley’s Phase Attractiveness and Useful resource Power Framework is one other option to establish which phase is your best option to your subsequent marketing campaign. The framework helps you establish essentially the most engaging market segments and your means to compete for these segments. 

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

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


Phase attractiveness is evaluated based mostly on the next standards:

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

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

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

With this knowledge, you may weigh the potential of varied 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 determination on which phase to focus on, you’ll must determine easy methods to design your gives, easy methods to talk with the viewers, and the place to share your messages so that they attain your required viewers. 

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

These sorts of questions will assist you consider what sort of supply to make to achieve their curiosity. 

When growing your messaging, use language that the phase makes use of of their each day lives. As an illustration, you could wish to keep away from slang or stylish language with an older viewers. In case your promoting comprises pictures or sounds, make sure that they resonate with the phase’s on a regular basis expertise. 

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

Let’s say we wished to run some voice advertisements on music streaming web sites. We might filter the Visited Domains desk to indicate solely music based mostly domains. Right here’s a take 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 concentrating on our phase of ladies aged 45-54, we’d place advertisements right here. 


Puma, however, had a youthful viewers. Their prime music websites had been, and decrease down the checklist,, a music streaming service extra standard amongst youthful audiences. These is likely to be our selections if we had been concentrating on our youthful phase. 

Suppose Lengthy Time period with Your Market Segmentation Technique 

Viewers segmentation is a strong instrument that may make it easier to enhance your advertising and marketing plan and extra successfully attain your audience. By breaking your market into smaller, extra particular teams based mostly on key traits, you may create extra related and personalised advertising and marketing campaigns. 

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