Using Market Segmentation for Better Brand Messaging - Part 3

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Posted Jul 06, 2012
Susan Gunelius

It's impossible to adequately segment your audience without conducting market research. That's the subject of Part 3 of the Using Market Segmentation for Better Brand Messaging series. If you missed the previous parts that discussed what market segmentation is and the common types of market segmentation, follow the preceding links to read them now so Part 3 makes sense.

market segmentation

Market Segmentation Research

Before you can segment your market into homogeneous groups, you need to learn who they are. To do that, you must gather data about their demographics, lifestyles, and behaviors. Using market research analysis methods such as cross-tabulations, cluster analysis, multivariate studies, and so on, you can identify audience similarities and develop specific segments for better marketing messages and returns on your marketing investments.

However, market research for market segmentation purposes isn't a one-time thing. There are several steps you need to take when you begin your market segmentation efforts as well as steps you should take on a continual basis.

First, consider what you want to learn from your market segmentation research such as consumer attitudes, needs, feelings, access, and willingness to purchase as well as all of the demographic, psychographic, geographic, behavioral and other segmentation attributes discussed in Part 2 of this series.

Second, determine your market segmentation goals, but remember, segmentation analysis can also reveal things to you that weren't part of your original goals. For example, market segmentation and related research can reveal opportunities for:

  • New products
  • Brand extensions
  • Geographic expansion
  • New or different brand messages
  • New distribution points or methods
  • And more

In Next Generation Pharmaceutical, Robert Zelnio, PhD, offers a great list of seven ways formal segmentation research should be used:

  1. Identify potential measures relevant to the description and segmentation of target customers.
  3. Define distinct market segments and or identify potential new customer categories.
  5. Describe typical drivers and needs of customers within each segment.
  7. Measure the relevant value of each segment.
  9. Determine which segments are most commercially viable.
  11. Identify the competitive terrain which will comprise each segment and prioritize the relative positions of competitive products by segment.
  13. Outline business or brand strategies that can differentiate an asset/product that will stimulate awareness, trial and long-term brand loyalty with customers of each segment.

Defining market segments should begin with qualitative research, which gives the company an opportunity to identify the most important concepts and words to use in the creation of formal quantitative surveys. The resulting quantitative survey should include questions that will help you gather data to reach your segmentation goals such as behavioral questions, psychographic questions, demographic questions, and so on. It's particularly important to include questions that dive deeper into consumers' feelings about brands and products, so your subsequent analysis of the data can provide you with the information you need for both reach- and value-segmentation (as discussed in Part 2 of this series).

Avoid Common Market Segmentation Mistakes

market segmentation target market

Once you've gathered all of your data, your work isn't done. You still need to analyze it and develop marketable segments. You also need to continually analyze these segments and the overall market to ensure your segmentation is still valid. In fact, that's one of the biggest mistakes made in market segmentation -- only doing it once. Here are a few more common mistakes you should avoid:

  • Excessively Broad Segmentation: Don't give up on your segmentation before you've developed narrow enough segments to drive ROI.
  • Over-Segmentation: Don't create so many narrow segments that they're not profitable.
  • Ignoring the Existence of One Message to Rule Them All: Sometimes there are messages that appeal to several market segments or to all market segments. Save time and money and use them.
  • Over-Analysis: Don't get so caught up in intricate statistical analysis that you miss the most obvious segmentation details.
  • Putting Quantity Above Quality: Just because a market segment is the biggest doesn't mean it's the most profitable or should be your top priority.

Remember, market segmentation can increase ROI, but too much (or too little) won't help your brand at all. Instead, you have to work to find the right balance, and that's a task that's never complete.

If you missed Part 1 or Part 2 of the Using Market Segmentation for Better Brand Messaging series, follow the preceding links to read them now.

Image: Sanja Gjenero, Sanja Gjenero

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