Segmentation & Targeting

Are your marketing dollars working as hard as they could be?

Market segmentation strategy is all about resource allocation. EquiBrand can help stretch your marketing budget by optimally aligning marketing spending with the right target customers.

Market segmentation (also called customer segmentation) and target selection are two related marketing strategy concepts that should be central to marketing strategy and plan development.

Market segmentation flows from the perspective that not all customers are alike — and individual customer groups will seek out different products and brands for different reasons.

Quantifying a customer segmentation framework gives companies a clear understanding of the most attractive segments, including their size, profitability, and growth potential. Resources can be better aligned to meet customer needs, both today and in the future.

Target marketing, a related concept, is one of the most critical, though often overlooked, components in marketing strategy development. Targeting recognizes that most companies have limited resources and therefore need to “place their bets” where they will yield the highest return.

Many companies are reluctant to select a core target, fearing that excluding certain groups will decrease an important source of volume. In turn, companies try to serve all customer groups equally, which can result in a diffused offering, that no one group finds appealing.

Our marketing consultants understand the key difference between 1) the more narrow “target market” (think the center of the bullseye); and 2) the broader “consumption market” that falls outside of the core, though often finds the offering appealing. Targeting, then, becomes an issue of prioritization vs. necessarily excluding customer groups.

Market Segmentation and Target Selection Issues

  • What are the the underlying motivational differences or factors across customer segments? How might these factors align with potential, hypothesized targets?
  • What is the overall segmentation framework for the category? On what basis – attitudes, behaviors or demographics – do customer groups align?
  • What is the optimal segmentation solution? What are the implications for target selection?
  • Which are the most attractive targets for the business, in terms of market size, profitability, brand-fit and long-term attractiveness?

  • Should current offerings be realigned or new offerings introduced to better meet the needs of the target?

Market Segmentation Consulting Approach

We use qualitative and quantitative research to develop fact-based customer segments and customer frameworks, drawing on proven market segmentation research methods.

Following customer framework development, target selection workshops (including persona development) are used to identify narrow in on priority targets. Obtaining internal agreement with the selected target(s) is critical, as subsequent marketing activities will stem from this important input.

Finally, don’t get hung up on differences between market segmentation vs customer segmentation, or customer segmentation vs. customer personas or the role of segmentation and ABM (or account based marketing). The are a variety of market segmentation models — the important thing is to get make them a part of your strategic approach to marketing.

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Questions about segmentation, targeting and positioning (STP)?

These three strategic marketing components are foundational to business growth. As a leading marketing strategy consulting firm, we help our clients plan and then execute marketing strategies and plans that win. Contact us to learn more.
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