Market segmentation is the compartmentalization of both current and potential customers into clear segments. These segments are composed of specific themes that include purchasing habits, similar income levels and demographics.
These themes are also collected with marketing strategies in mind. That is, grouping together customers with the goal of giving ‘similar’ marketing targets and strategies.
Market segmentation and CDP
Incorporating a customer data platform or CDP Platform into your marketing strategy is one of the key ways to collect key information about your customers. CPDs allow you to collect first-hand data about your customers including their activity on different platforms, transactional data and personal information.
The benefits of market segmentation
There are many benefits that come with getting a clear picture of your market.
- Your marketing department will be able to create highly “effective” advertising and marketing plans.
- You can create communication plans with specific content that is directly appropriate and will resonate with each segment.
- You can increase your ROI by increasing your market competitiveness as a result of focusing on each segment.
- Become more attuned to your customers preferences and needs by customizing your promotions according to each segment.
- Expand your market by understanding each segment in particular geographical regions. Once you are familiar with a geographical location, it becomes easier to branch out into its neighbouring areas.
Common themes in market segmentation
Marketing departments will commonly create the following themes:
- This segment includes aspects of customers lifestyles, personalities, and social status.
- Demographics include education, age, nationality, gender, occupation and income.
- Market behaviour looks at customer behaviours including user behaviour, spending, brand loyalty, product use, and technology preferences.
- This segment looks at where customers reside including country, cities, or rural areas.