The importance of Segmentation in Marketing

 The Importance of Segmentation in Marketing

By Connor Williams

A common misconception business owners make is thinking they should make everyone their target audience.

This may seem like it would be ideal for making a lot of money, a big target audience means there will be a large number of potential consumers. Very quickly though, they realise that it's near to impossible to make a product that perfectly accommodates everyone's wants and needs. For example, a skateboarding company would be making a mistake if they tried to sell their skateboards to the elderly.

A good Market segmentation will prevent a business owner from this issue. You would use Market segmentation as seen in image 1 below:

IMAGE 1

The image displays some of the different ways you can divide your target audience into smaller groups, basing them on specific characteristics. Using these segmentations will show a business a more detailed insight on the most important factors of their target audience, resulting in the business having a better understanding on how to communicate their product to a better standard.

A good example of a company that has a good understanding of each of these segmentations is Nike:

Demographics

Assessing this should result in you knowing exactly who your buyers are. 

Nike show an understanding of their demographic in different ways, an example is they have a clear distinction between their products for men and women, typically using brighter colours for women and using darker colours for men.

Psychographics

Assessing this will tell you why your buyers purchase your product.

The marketers at Nike know that their buyers live active lifestyles so they make sure to communicate that they are a sportswear brand to their audience. Nike always show off their innovations when they invest in sportswear technology.

Lifestyle

This will give insight on what hobbies and entertainment your majority target audience prefer.

Nike show their understanding of this by collaborating with influencers. My favourite example is their collaboration with the music artist Skepta. (see image 2)

IMAGE 2

Behaviour

This segmentation shows you your buyers preferences on shopping habits.

Nike are the number 1 sportswear and sneaker brand and they know this, so how do they show it? They keep on investing in sportswear technology, collaborating with popular influencers, and of course continuing in making new clothing products.

Bibliography

Decker, A. (2021) The Marketer's Guide to segmentation, targeting, & positioning (STP Marketing), HubSpot Blog. HubSpot. Available at: https://blog.hubspot.com/marketing/segmentation-targeting-positioning (Accessed: December 7, 2022).