When studying market trends things can feel a bit overwhelming. There is so much data and there are so many numbers, it can be hard to make sense of it all. How do you cut through all the noise to make sense of it all?
One of the most effective and common strategies used in the marketing industry is Market Segmentation. Simply put, market segmentation is the act of dissecting your audience up into groups based on things they have in common. There are many ways to do this, but typically it is done through demographic or psychographic categories. Things such as social class, income, geographic location, religious affiliation, and other such identifiers.
Once your audience is broken up into smaller easier to manage chunks, it is much easier to spot trends, opportunities, and vulnerabilities. You will be able to see what matters most to them and what speaks to their desires and how to best suite your product, services, and advertising to their unique needs.
Let’s take a look at Under Armour. In 2014, the Under Armour company wanted to expand their share of the athletic market so they looked at their data. Realizing that they had a vast opportunity to increase sales in the women’s lines they put a great deal of thought into how to best appeal to that segment of the market. After looking at the failed marketing attempts of their competitors they decided that the women’s market segment was looking for a bold, empowering and strong image that would be inspiring and uplifting thus giving birth to the “I Will What I Want” campaign. Featuring women who strayed from the stereotypical mainstream athlete image, one ad depicted a ballet dancer who was told she “didn’t have the right body” that defied the odds and went on to achieve greatness. Another ad in the campaign shows a model who was, even in the comments of the very ad itself, discredited and mocked as not being good enough to be featured rose above the negativity and noise with grace and lived her truth. These ads show what true strength and power of a woman means and gives us all something to live up to and that message certainly resonated with their market segment as they saw sales soar with a 28% increase in the women’s sales. To read more about this campaign and the Under Armour strategy and growth, click here.
As you see, segmentation can be a great way to focus and hone in on your target market and make the most of your advertising dollars, but, there are some potential downfalls to be aware of. When implementing a segmentation strategy you should be cautions and keep the following in mind:
- Ethics: First and foremost, be aware of the ethical aspects of segmentation. There is a big difference between segmentation and discrimination.
- Over Segmentation: It can be easy to get carried away and get a little to specific. Try not to over segment when focusing in on your audience.
- Under Segmentation: Just like it is not good to go overboard on segmentation, not cutting in far enough will be just as much of a head ache. Try to go for the Goldie Locks effect.
- Excluding Viable Market: Step back for a few minutes before you start and look at your offering from a brand new blank perspective. It can be easy to pigeon hole your own product and only see it as you intended it to be used. Sometimes though, a product can have a whole new life with an entirely different consumer as well. Try not to cut out a whole market segment just because you didn’t consider all the possibilities. Not sure what I mean? Well, bubble wrap was originally designed as wallpaper, Viagra was meant to help with blood pressure, and chainsaws were originally made for surgical use… Want more info and examples click here.
Looking to the future, it will be interesting to see where the next big swing will take the global market. There has been an increase in demand lately for all things that bring awareness and aid to mental health and wellness and I think that will play a much bigger role as the next few years unfold. The younger generation has seen the long term effects that stress has taken on the generations ahead of them and I foresee a lot of focus being put on easing that as time moves forward. Whether that will be the segment that businesses vie for next is anyone’s guess, but one thing is for sure, segmentation is the key to growth and gains.