Is a Market Segmentation Right for Your Needs?


With a growing focus on personalization and desire for deeper consumer understanding, market segmentations are getting increased airtime among established organizations and start-ups alike. Because, as much as we want to talk to every individual in a hyper-personalized way, the ability to scale is ever important to drive results and ROI.

However, organizations might embark on a market segmentation when an alternate approach might better serve their needs. To understand if a market segmentation is the right solution for the right time, let’s first explore what it is and what it provides.

What is a market segmentation?

At its core, a market segmentation is an analytical process that divides the market into approachable groups based on identified similarities. The type of information you segment may vary based on your needs, with the traditional use case for market segmentations focused on marketing and product development. In essence, this helps you close the gap from a general understanding of consumers and provide an opportunity to engage more directly with consumers in ways (channels, messaging, or new offerings) that are most relevant to them. Today, the use for market segmentation is evolving, with brands seeking to not only understand the market, but truly identify untapped opportunity for growth.

Segmentations can be an expansive (and expensive) endeavor, with the opportunity to impact the entire organization – from executives to the frontline. Before taking the leap, ensure your organization truly needs segmentation to accomplish its goals and is ready to adopt the outcomes.

To determine if a market segmentation is right for your needs, consider:

Alternative to market segmentation

While a market segmentation might be in your future, if you find the criteria above describe you, consider exploring alternatives, such as:

Market segmentations can be a powerful tool when appropriately deployed within an organization, revealing growth strategies and optimizing investment efforts. If you’re still considering a market segmentation, be sure to explore our piece around How to Design Your Next Segmentation.