Segmentation and What It Can Really Do

As a marketer, it is important to really understand your audience and who makes up your
audience. Segmentation is “the process of tagging and grouping customers based on shared characteristics.” You will need to look at your audience and determine who can be put under the same categories.

How Can Customers Be Grouped?

To begin, customers can be grouped within a market based on their needs, habits, or attitudes. In an article written on titled “Generations X, Y, Z and Others,” the author segments people by generations. The author goes on to describe the differences between several generations. “Gen Xers are arguably the best educated generation with 29% obtaining a bachelor’s degree or higher.” “Gen Y are less brand loyal and the speed of the Internet has led the cohort to be similarly flexible and changing in its fashion, style consciousness and where and how it is communicated with.” “While we don’t know much about Gen Z yet…we know a lot about the environment they are growing up in.” Just grouping based on the decade your audience was born in, can tell you a lot about how to market.

This image shows the year range for some of the generations.

The Purpose of Segmentation

Segmentation “allows marketers to focus their resources on the most promising opportunities.” This means that marketers, and companies as a whole, will be able to save big bucks on marketing if they know who they are marketing to. For example, marketing an iPhone with a lot of technological capabilities would best be directed towards Gen Xers and younger rather than the Boomers right before them as they are smarter and more technologically savvy.

Segmentation = Better Marketing

“Segmentation lays the foundation to for identifying your Target Market, using marketing to give the brand/product a distinctive and meaningful place (position) in the minds of targeted customers.” By turning your audience into groups, you can figure out what kinds of information and how you are presenting the information will work best to get a better turnover.

The more people you target correctly with your marketing, the more products you will sell and the better your company will do. For example, if you find that you are a clothing company and you can break your audience up into men and women, you would be able to send out advertisements to men about mens’ clothing and sales coming up in the mens’ department, whereas you would be sending women advertisements about women’s clothing and sales in the womens’ department. It would not make as much sense to send advertisements and marketing materials about women’s clothing to men and vice versa.

In short, segmentation is an essential part of marketing. It is a way for companies to be able to group their customers into segments that they will be able to target more directly. Basically, setting up groups can save money and time.

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