Market segmentation: Criteria

Market segmentation criteria

Market segmentation is key to creating an effective marketing strategy.

When you know who you want to talk to, you’ll know what to tell. But what are the criteria we need to follow to choose our person buyer?

We’ll start at the beginning…

What is market segmentation

Market segmentation is about the research we conduct to define who the buyer person we will target is. Once this research is done we will establish a division, with the criteria that are relevant to our niche market; age, sex, income, behavior, personality, geographic location, etc.

These criteria can be used for different purposes;

1. to improve the product

2. to improve the advertising issued.

Companies that correctly target their audience enjoy much greater benefits than those that don’t.

According to recent studies:

1. 81% of executives worldwide advocate increased profits to proper market segmentation.

2. They also claim that companies with great market segmentation strategies enjoy 10% more profits.

Examples of companies with excellent market segmentations that work are American Express or Mercedes Benz.

Criteria in market segmentation

Once we know what market segmentation is, it’s time to define what criteria we’ll follow to carry it out. Here’s a list of the most common market segmentation criteria. It will be you who must decide whether to use these, others or just a few.

1. Market segmentation criteria. Geography

Although it’s usually not the only data to keep in mind, geography can be a big fltro when considering our audience. In addition, within this criterion, different subgroups may emerge that help us to locate our advertising on the right track.

Why? Because geography defines many of our purchasing behaviors; whether it’s climate, culture, way of life, etc.

2. Market segmentation criteria. Demographics

Demographic targeting greatly filters the number of people we’ll reach, with essential data such as:

1. Age

2. Education

3. Income level

4. Number of family members

5. Race

6. Gender

7. Work

8. Nationality

9. Etc.

This data is of paramount importance when creating special advertisements and discounts for specific sectors of the population. There are products that are characteristic of large families, so it may be interesting to make a 2×1 or discount on the second unit. Or, on the contrary, there are services that only women need, so you can create a special promotion for Mother’s Day.

3. Firmographic

This targeting is similar to demographic targeting.

Difference? The firmography is fixed in organizations, while demographics see people.

4. Behavioral

It divides the market by behaviors and patterns of action in terms of purchasing decisions, lifestyle, consumption and use of the product.

This type of market segmentation allows market specialists to develop an even more specific niche than the latter exposed.

5. Psychological

This type of segmentation takes into account the psychological aspects of the future client. Once you’ve divided your niche market by its lifestyle and personality traits, you’ll be able to define its values, opinions and interests.

Which markets use this type of targeting? The fitness market, for example. When they classify campaigns for their customers, they focus on people concerned with living a healthy life and constant exercise.

How to get started with targeting

When creating a market segmentation you should not go with the idea that it is difficult. Creating a market segmentation should not be complex, it must be effective.

Here are five main steps to create successful market segmentation:

1. Pre-investigate your competition and your customers.

2. Decide, with regard to that investigation, which public you want to reach.

3. Design another study to investigate the chosen audience.

4. Within your own customers, create market segments.

5. Try different campaigns and interact with your person buyer, so they give you the answers themselves.

Why it’s important to use market segmentation criteria

1. It will improve your knowledge about your customers and the state of your competition.

2. You will improve your prices to be more competitive.

3. You will generate greater value.

GMOL Solutions will help you with your market segmentation

If you have an endeavor and need to create traffic quickly and efficiently, you’re in the right place.

GMOL Solutions has an excellent group of professionals who will help you create the content you are looking for, analyzing and measuring your potential clients.

Trust professionals, trust GMOL Solutions.