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Useful market segmentation – an oxymoron or achievable?



As categories get more competitive, brands are increasingly seeking to achieve growth by better segmenting and targeting their market. And they typically turn to their research agency to develop a market segmentation. In my career, both as a Marketing client and as a Researcher, I have seen more examples of segmentations that don’t work than I have of those that do.

Is it possible to achieve a useful market segmentation?

The answer is yes, if clients and agencies follow these simple steps:

Wisely choose the basis for your segmentation

Behavioural, attitudinal, needs and usage based segmentations are all valid but each is more or less relevant depending on the category. We recommend doing some qualitative research first to uncover the category drivers and motivations and workshop the bases for the segmentation with internal stakeholders to see how they align with your product, retail or brand decisions. This can be an iterative process as the questionnaire is being written and segments are being developed.

Resist the urge to throw the kitchen sink at the survey

Batteries and batteries of senseless attitudinal statements, all thrown into some statistical package that generates meaningless segments. Sound familiar? Think about the poor respondent, and how fatigued they must be by the end of this survey and wonder how meaningful their responses are.

See if you can picture each of these segments

Be true to yourself, can you actually place someone you know into each of these segments – and can you clearly explain the differences between the segments? Try the elevator test – are you able to explain each segment with a couple of sentences? Are you able to make different product, retail or brand decisions to target these segments? These are the litmus tests for a good segmentation.