Segmentation
Segmentation divides a market or a customer base into groups of consumers who are similar in their needs, behaviour, motivation or value to the business. Unlike a classification by gender, age or income, segmentation is built on finding the factors that genuinely explain differences in purchasing behaviour and determine how an audience reacts to the product, the price, the communication or the service.
Segmentation is built on value-based or motivational characteristics using multivariate statistical methods (cluster analysis, factor analysis). This makes it possible to identify natural consumer groups from a body of quantitative data rather than from expert assumptions.
When to use this method
A segmentation study is useful when you need to:
- identify the most promising target audiences
- understand how different customer groups differ
- understand whom to sell the product to and how
- adapt marketing communications to different audiences
- build a personalised value proposition
- optimise the product range
- find out how to adapt the product for a new audience