Segmentation is a technique by which a market or a set of customers is partitioned to meet a strategic or tactical objective. Market segmentation can be conducted using several approaches including demographic, geographic, attitudinal, psychographic, and behavioral. Customer segmentation is often used for tactical objectives and is used most in direct marketing. In implementing digital marketing strategies, segmentation not only delivers significant value but is increasingly demanded by customers who expect that every effort is crafted and aligned with their unique needs and preferences.
The underpinnings of market segmentation exist in microeconomic theory that allows optimization of demand by targeting several markets with an equal understanding of them all. By segmenting the market, a company can develop an offer that is distinct from others, tailoring the offering to the needs of a specific group or market segment. By doing this it offers a value that is so different from competing offers that it creates near-monopoly conditions and is better equipped to generate a higher price or claim superiority in the newly segmented category.
Segmentation also allows a firm to maximize the use of its resources Focusing on a portion of the market and applying available resources, outstanding outcomes can be achieved. This aspect of segmentation examines how to make the best use of resources and company capabilities in a particular market.
Market Segmentation: Many Strategic and Tactical Uses
- Examining the underlying structure of a market to identify unoccupied niches
- Optimize offers for services or products
- Maximize market share, maximize revenue or profit
- Identify a group of core followers or ultra-loyal customers
- Formulate digital engagement strategies
- Maximize market coverage in a competitive space
- Increase the level of focus of a market or messaging strategy for greater impact
- Uncover under-served populations, most profitable markets, core loyal audiences, non-responders
- Prioritize efforts in outreach and public education campaigns
- Optimize marketing mix
- Identify core groups and develop customer profiles and personas
Segmentation Services at EurekaFacts
At EurekaFacts, we have expertise in conducting segmentation analysis and interpreting results from a strategic and a tactical perspective. We follow a consultative approach to learn about your business objectives and recommend the segmentation approaches, methods, and techniques best suited to deliver maximum value. We examine viable segmentation schemas, evaluate them, and present options. Within each segmentation approach, we identify the segments, prioritize them, and make recommendations for targeting and positioning, as well as for appropriate tactical uses that maximize value. Once target segments are identified, we develop robust segment characterizations (personas / customer profiles) that describe the demographics, attitudes, preferences, drivers, and behavior of each segment. Furthermore, we develop guidelines and assist in the implementation of personalized marketing and ongoing use in digital communications and other interactions.
Our capabilities include strong understanding of business and marketing sciences, microeconomic theory, and a team of experts in advanced analytics, survey methodology, geo-demographics, database integration, and data collection.