Market segmentation is a marketing term that refers to aggregating prospective buyers into groups or segments with common needs and who respond similarly to a marketing action according to Investopedia.com.
Marketers can use segmentation to figure out who they need to market to based on their target audience of preference and where to spend their MWB. In my particular role, we use segmentation to understand a few items:
- where to allocate certain product
- where to host activations
Although I could create a long list with a host of uses for segmentation I’ll briefly explain these two. Where we allocate our product depends on what store and who shops that store i.e. segmentation. To take this a step further, dependant upon those variables you then start to look at how can we market to these consumers, what do they care about and does this also align with our global messaging.
Then you can begin to look at how you may want to activate around this product and marketing, who are we speaking to and where are they mostly located. If we choose a location outside of where they are located, is this target consumer willing to travel?
This is a very high-level overview, of course there are many more steps and processes to segmentation and marketing spend. How do you utilize segmentation, lets discuss below.