What is segmentation in marketing?

marketing segment

As much as we would like to limit ourselves to saying that our product or service is suitable for everyone, there is no way that this is the case. In this case, who buys our products? Who is our Buyer Persona?

Our Buyer Persona is the ideal customer for our company, who has all the necessary characteristics to be interested in what we offer.

Once the ideal customer is defined, we know exactly which market segment to focus on.

So what does segmentation mean in marketing? And what are its strategies?

Segmentation in marketing: what is it?

Segmentation in marketing is a subdivision of the market into homogeneous subsets of consumers based on specific parameters that may unite them.

This union depends on the way they respond to a particular offer formula or because of the presence of characteristics similar to the purposes of the established marketing objectives.

The purpose of segmentation is to identify those parts of the market potential which, due to their homogeneity, can be considered as target objectives that can be achieved by particular combinations of the marketing mix.

In this way, the firm tries to explore the market demand in order to obtain information about the buying behavior of consumers and to estimate the quantitative entity of each identified segment.

This allows you to choose target segments and implement a targeted marketing policy.

Segmentation methods

The biggest problem with segmentation is adopting a policy that fits the company’s objectives. First, the parameters that are important in determining consumer behavior must be identified.

The variables on which to perform segmentation are almost infinite. However, among these, some are considered the most generally significant and are used more often:

  • geographic variables: such as region and size of urban center;
  • socio-economic variables: such as social class, income and occupation;
  • demographic variables: such as age groups, gender and family composition;
  • psycho-graphical variables: such as personality traits, lifestyle and values;
  • Purchase behavior variables: such as frequency, end use and quantity.

From segmentation to marketing strategy

There are three marketing strategies generally related to segmentation: undifferentiated marketing, differentiated marketing and concentrated marketing.

Undifferentiated marketing

It is a strategy that assumes the absence of significant segments of demand; buying behavior is based on elements common to all individuals.

Any group whose overall behavior is not homogeneous is negligible.

The undifferentiated strategy involves a combination of marketing factors that could be described as “quantitative”. The company’s objective is to:

  • distribute the product to as many points of sale as possible;
  • to have a massive and continuous presence in the mass media;
  • and sell the most product.

This approach to the market is typical of mature consumer goods, which explains their universal distribution and the hefty advertising campaigns.

Differentiated marketing

It occurs when the company, after having identified significant segments, chooses some of them as targets, adopting a particular marketing mix for each of them.

In doing so, the company will be able to introduce all the segments that are important to it and achieve higher market shares.

The cornerstone of this strategy is product differentiation. Each segment will be offered a product with specific characteristics and performance (quality/price ratio).

Of course, the communication, pricing and distribution channels will also be different. The great difficulty of this strategy consists in effectively balancing the elements of differentiation of the offer with those of the unity of the company’s image.

Concentrated marketing

The concentrated strategy occurs when the company’s marketing mix targets a single market segment. The company therefore specializes in products and adopts communication policies that are electively oriented towards this segment. It may consider selective or exclusive distribution policies.

In adopting a concentrated strategy, the company must consider the objective of achieving market share leadership in its segment, in order to reach attractive sales quantities. This strategy is typical of small companies that find in specialization a competitive element to which large companies cannot respond effectively.

Concentrated marketing is therefore synonymous with small relative, not absolute, dimensions.

Segmentation has, until now, been referred to the problem of demand and consumer behavior. But it should be noted that this concept is widely present in advertising, especially in the problematic of the big media.

Amandine Carpentier

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