How to Formulate Market Segmentation Strategy?

June 6, 2023 | Digital Marketing

Marketing genius Seth Godin once said, “Your customer isn’t Everyone”. So, you need to be specific in terms of product, services, and their buyers. You need to be precise in regard to your customer’s age, sex, occupation, geographic location, and requirements. And this is where Market Segmentation comes into the picture. 

To streamline your effort, optimize your resources, reach the correct audience segment, control bounce rate, improve conversion ratio, and elevate Return on Investment (ROI); you must deploy an effortless yet significant Marketing strategy, and Marketing Segmentation is an important element of this.

So, here we shall discuss the importance, fundamentals, steps, challenges, and possible scope of target Market Segmentation. 

What is Market Segmentation? Know its Significance in Modern Marketing Structure

Modern Market Segmentation

Market Segmentation is, notably, breaking down a broad market into multiple group-type as per their preferences, demand, and needs. 

Let’s say there is a restaurant business. Here different market segments could be: 

  1. Customers with family packages
  2. Customers with food and drinks
  3. Customers seeking value for money
  4. Customers looking for lucrative cuisine 
  5. Customers looking for something unique (Food Vloggers)

And many more……..

Further, the significance of these market segments

High-level Marketing

High Level Marketing

Since you have customized and bifurcated your marketing into small groups, the message will influence users to try your product and services. 

Recognize Niche Markets

Identify Niche Market

While bifurcating the market segment, you can discover new niches that add brand value to your product and website. 

Better Customer Retention

Better Customer Retention

Improved brand experience will make the customers frequently return to your website. The sharpness of the target Market Segmentation will increase the possibility of building a connecting bridge with the customers’ preferences. 

Target Advertising

Target Advertisement

The segmented data can help you understand the personality of the buyers. This will further pave the path for target advertisement and a higher sales ratio.

Opportunity for Product Development

Product Development Scope

A better understanding of customers buying behavior via Marketing Segmentation; higher will be the scope for product development and service enhancement. This will eventually widen the growth scale of your company. 

What are the Basic Types of Marketing Segmentation?

To break down the stereotypes of undifferentiated marketing, contemporary business decision-makers are taking a giant leap to adopt distinct market segments. Here, the market segmentation strategy is built on the foundation of multiple significant parameters.

Let’s find them out.

Geographic

Geographic Segmentation

Geographic Segmentation refers to the major location of a particular customer base. It can be rural, urban, metropolitan, tropical, polar, western, Asian, etc. 

Demographic

Demographic Segmentation

Demography refers to age, sex, religion, education, income, family structure, and other similar metrics of your customers that must be gauzed beyond undifferentiated marketing.  

Psychographics

Psychographic Segmentation

Traits like lifestyle, hobbies, cultural interests, and sports inclination of consumers define the psychographic Segmentation of the market. You can also check whether customers are inclined towards mobile devices. 

In case they are, you can use the Mobile Friendly Checker Tool of RankWatch to evaluate the mobile friendliness of your website. 

Behavioral

Behavioral Segmentation

Here you segment the market according to burying behavior, saturation rate, purchase frequency, loyalty traits, buying style, and much more. 

Media

Media Segmentation

Based on social media platforms, television preferences, magazines, journals, newspapers, and search engines, this market segment is inculcated in the marketing strategy.  

Profit

Profit Segmentation

This segment refers to the profit expectation of the customers. Analyzing the profit requirement of the users also drives a better market segmentation process. 

Learn the “How-To-Build” Steps of Market Segmentation Strategy

Before you start with the market segmentation strategy, you better know the operation of the market segmentation process. Few metrics must be taken sincerely. 

Let’s figure them out. 

Define Your Target Market

Target market

Firstly, identify the target market. You cannot proceed with bifurcated market segments till you don’t have a defined target market. 

For instance, the IT industry these days is running on cloud solutions. You cannot sell local storage devices to a business segment that has already adopted cloud infrastructure. 

Meanwhile, schools, colleges, and universities can conventionally be the market for storage devices. 

So, identify and define a target market segmentation.

Screenshot of RankWatch’s Ranking Dashboard

RankWatch’s Ranking feature can help you a lot over here. The Ranking dashboard offers detailed insights on top landing pages, country wise traffic, top keywords, top landing URLs, visitor engagement, and much more. 

Further, you can evaluate the services and products of those top pages and understand what the market is exactly looking for. 

Research & Identify their Expectation

Recognize Target Expectation

After you understand the target market, it’s time to identify their product and service expectations. 

For instance, if you sell cloud services, there could be security infrastructure, cloud migration service, customization requirements, and much more. 

RankWatch is an SEO tool that can somehow make you identify the expectation of the customers. It has a section called competitor analysis. With this feature, you can track down your top competitors, their average rank, and the keywords they are ranking for.

Screenshot RankWatch’s Competitor Analysis

This analysis can make you understand what the customers expect from a particular product and service domain. 

Bifurcate Audiences into Segments

Audience Segmentation

Post understanding the expectation of your audiences, you have to bifurcate them into multiple segments. As discussed above, there are a few fundamental parameters of Marketing Segmentation, and it’s time to make a uniform section of your target market as those segments.

Make Offers for Every Different Segment

Offer Bifurcation

The last step will be to customize the product, services, and offers that will best suit the drafted market segments. The more the offers connect with the target segments, the higher will be the sale possibility and revenue generation. 

Basically, when you have already understood your customers, it’s time to do business! Don’t worry; RankWatch will help you with this. 

Pay-per-click advertising could help businesses with productive output. And RankWatch’s keyword research feature would help you design a PPC campaign. Identify keywords that will generate organic traffic to your site and get the CPC value of each of them. Further, you can fetch the data like:

  1. Global Search Volume
  2. Country Search Volume
  3. SOV%
  4. CPC
  5. Initial Rank
  6. Highest Rank 
  7. Keyword Difficulty

Screenshot RankWatch’s Keyword Syggestion

So, to analyze the keyword competition and volume, make the most of the keyword research and rank tracking section that offers you a comprehensive, graphical, and tabular distribution of keywords.

Summing Up…..

So, this is all about the Marketing Segmentation strategy, which forms an integral base for contemporary digital marketing. Although this model is broadly accepted by digital marketers across the globe, you need to have an efficient SEO tool to accomplish the goal. 

Certainly, RankWatch comes up with some additional capabilities to escort your vaulting ambition. It’s high time to go beyond the undifferentiated marketing strategy. 

Hope you got all the necessary insights on target Market Segmentation.

Happy Reading!

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