Market segmentation: what is it and how to do it?


Market segmentation: what is it and how to do it?

Market segmentation: what is it?

Did you know that market segmentation is a strategic and vital issue for companies to grow in the medium and long term?

Starting a business requires a lot of variables – and you know it very well. It is not and will never be an easy mission. And that is why it is necessary to surround yourself with care.

One of them refers to customers and where to prospect them.

“Shooting” for all sides’ makes very little sense, however comprehensive the solution the company has in hand may be.

And this is when market segmentation grows in importance.

But, after all, what exactly is it? How important is it? How to perform?

All of these are common questions – especially for those just starting out in their business,

However, these are all answers that need to be clear, and in this article, we hope to help you better understand market segmentation.

Let’s check it out?

Good reading!

What is market segmentation?

Segmenting the market is nothing more than focusing on a target audience for your business. Only by doing this is it possible to achieve better results in the short and medium term.

Even better. It is through this action that companies manage to reach the so-called “predictable revenue”, which provides security for any necessary decision-making later on.

Market segmentation, therefore, occurs by separating into specific groups of potential customers, grouping them by similar objectives and characteristics.

It is possible to divide the market taking into account characteristics such as:

  • Gender;
  • Age;
  • Social class, etc.

Shopping habits such as:

  • Who buys on the internet;
  • Who buys in a physical store;
  • Best time of year for sales;
  • The average price paid for a given product or service, etc.

Needs such as:

  • what are the needs of these customers;
  • What they complain about existing products/services, etc.

Wishes such as:

  • what the customer wants from this type of product;
  • What I can offer to make the experience the best possible, etc.

The objective, from there, is to analyze the profiles so that, within the strategic planning, it is possible to concentrate efforts on the task of attracting customers to your company.

Focusing on a specific audience can be much more productive when it comes to lead generation.

After all, you will know by heart what these people need and where they are. Which will have a decisive influence on the companies’ sales cycle.

This one will be smaller as you will be selling to those who are all about your business. And because of that, less work will be needed to seal the sale.

Digital market segmentation

Not only do physical companies need to carry out market segmentation. And by now you certainly have this idea very clear in your head.

Any digital business must necessarily segment its market.

The so-called “niches” are even more important to be defined. Also because we live in an era of sharing and we are, at every moment, impacted by a flood of information of all kinds.

It is necessary to stand out, therefore, in the midst of such competition.

The good thing about this is that geographic barriers are completely eliminated.

And then, from the market segmentation performed, inbound marketing strategies can go from paper to practice.

The goal? Show your target audience that you are a reference, a real authority in what you do.

What are the types and/or criteria for market segmentation?

As mentioned above, you need to take into account some criteria to segment the market and find your ideal audience.

Market research is decisive at this time. Even to identify some repressed demand that you, initially, did not even realize the potential to be exploited.

We have separated, below, 3 criteria for market segmentation.

See the types:

1 – Demographic segmentation

This criterion takes into account the characteristics of the population of the analyzed place. You will thus have quantitative data on aspects of the population.

This statistic includes information such as gender, age group, marital status, race, religion, nationality, family size, among others.

2 – Socioeconomic segmentation

Socioeconomic characteristics are essential to define which audience your company can impact.

Social and economic profiles are fundamental to be known to direct the active prospection efforts of any business.

This criterion takes into account data such as social class, education, income, profession, assets, among others.

3 – Geographic segmentation

How to segment the market?

Last but not least, it is necessary to take into account the geographical criterion.

This one, however, is much more important for physical businesses than digital – but, not for that, it can be ignored by those who sell online.

This is because the place where a person lives, circulates, determines how he behaves and how he sees society and its connections.

Eating, traveling, working, moving… everything related to consumption has to do with the context in which the person is inserted.

That’s why geographic targeting brings valuable data to companies about where people live and move.

Such as: country, state, cities, neighborhoods, streets, among others.

Why should I segment the market anyway?

Perhaps you are not yet convinced of the importance of segmenting the market.

Before we get down to business, make this clear: no marketing strategy will have an effect without this segmentation.

It is essential, before starting to attract customers, to define which group of people will be the focus.

Also because, once you have a clear understanding of what CAC is, you will understand even more the importance of this action.

Direct efforts, focus resources – human and financial -, have a sales forecast, sell more and better and grow.

All this involves segmenting the market, right?

Well, let’s go ahead!

How to do market segmentation?

The first step to being successful when performing market segmentation is to understand your business well.

What do you have to offer? What product or service will be developed? What benefits does it bring? What are his differentials?

It is essential to know well what you have at hand. What value and how will it contribute to your organization’s customer success.

This is the initial step to getting the right sale, to people who are fit with your business.

A good practice to better understand yourself as a company is to invest in branding. In positioning your brand. In the differentials it has.

Thus, it will be easier to communicate with the market and stand out from the competition.

That said, how to segment the market? We have 3 steps to help you with this task. Check out:

1 – Get to know the people well

The first step is basic, maybe even obvious, but it needs to be talked about.

You need to have, at the “tip of your tongue”, what your audience thinks and consumes to be able to segment the market in a necessary way.

The goal is to understand your customers’ needs as soon as possible. And, from there, look for solutions, within what makes sense for your business, to help people.

But, it goes beyond that. It is essential, from the first to the last contact with the customer, to show the value of what you sell.

Not financial value, but what does it really add to people? What is your difference and why this product and/or service simply cannot be ignored?

From the lead generated to the signed contract, the focus needs to be on making the customer experience the best it can be. No wonder companies are investing like never before in the area of customer success.

Segment the market and analyze. And, to get to know better the people who have to do with your company, ask yourself a question.

  • Is this analyzed group really relevant to my business?
  • Is this group within reach of my marketing strategies (and budget)?
  • Does this group have the financial capacity to provide the return I need to make a profit and continue to grow?
  • Do I have the production and service capacity to meet the entire demand of this group?

Conduct market research to understand not only what people’s demands are, but also what level of need and frequency they are.

All information, whether qualitative or quantitative, is relevant – even if it is for you to discard that analyzed group immediately.

2 – Know how to read the environment

segment market

Knowing the audience is important. But understanding what the competition is, who it is and how it operates is just as vital.

To be able to read the environment in which you are inserted, it takes a lot of analysis, research and observation.

Not just about the product or service itself. A 360° view is required.

  • How does the competition position itself as a brand?
  • How does she work on social media?
  • How is the customer service that comes to her?
  • How is the lead nourished (this for the inside sales model)?
  • How is the sales pitch?

Go beyond. Make a purchase to review.

  • Is there a relationship with the customer after the purchase?
  • Are there concerns about the customer’s success?
  • And the support, how is it?

To help you with this task, there are some analysis techniques, such as:

  • SWOT Analysis or SWOT Analysis – focused on mapping relevant internal and external environments to organizations;
  • Benchmarking – process to buy products, services and practices within companies.

To put the actions into practice, adopt some methodologies that accelerate knowledge and eliminate distractions:

  • Agile methods – focused on sharing knowledge and identifying best practices in each area;
  • 5S Methodology – focused on identifying distractions, eliminating them and ensuring more productivity for everyone;
  • BCG Matrix – focused on the development of investment strategies, in addition to being a powerful analysis tool.
  • Ishikawa Diagram – focused on organizing teams’ thinking to solve problems.

3 – Create the business persona

This is an essential step and needs to be done by companies. It is different from the target audience, as it is a specific cutout within the group.

Give this person a name, profession, age, hobbies, habits, and all the characteristics.

After all, by identifying this ideal customer profile (ICP), marketing strategies become much more effective.

By doing this, you will have a much broader and more complete view of the scenario, analyzing all possible consumers, and even more directing efforts to satisfy them completely.

So don’t forget!

The world is in constant transformation – although it may seem cliché to say this, it is absolutely true.

Literally, overnight, technology may have turned a certainty, or an innovation, into something totally outdated.

Therefore, monitor your strategies constantly. See if the market segmentation made still makes sense for the company.

If necessary, digitally transform your business.

Serve well the niche market you designated yourself. Make the most of the customer’s buying potential with up-selling strategies, for example.

Invest in ways to attract customers. Produce relevant content. Build an image of great authority within the mission of how to retain customers.

Pay attention to the competition and be the innovation instead of chasing it.

So, how can we help you?

Enjoy and read two contents that can help you on a daily basis.

The first speech brings some marketing tips for you to apply after segmenting the market.

And once you’ve generated leads, use some mental triggers to get the best business results on a daily basis.

Good sales!


Did you know that market segmentation is a strategic and vital issue for companies to grow in the medium and long term? Starting a business requires a lot of variables – and you know it very well. It is not and will never be an easy mission. And that is why it is necessary to surround yourself with care. One…