Market segmentation : Criteria to use and how to do it for your strategy?

Do you sell your products and services to anyone who passes through your website or eCommerce? Today I want to talk to you about market segmentation , a technique that will help you find your potential customers, the ones who really need to consume the products and/or services that your brand offers.

Currently, there are still many businesses and companies that are still tempted to promote and offer their catalog to the whole world, thinking that this is the best way to reach many more potential consumers with less effort.

However, that idea is wrong. Not having a well-defined target audience is a risk that can lead to an announced failure. Hence the importance of market segmentation.

What is market segmentation?

Market segmentation is a process by which a company’s potential customers are divided into different groups, consumer segments that share similar characteristics and needs and that require differentiated Marketing strategies.

The members of these segments, being made up of more or less homogeneous groups of people, are very likely to respond to the same stimuli and to react in a similar way to certain advertising strategies.

For this reason, this technique is very useful when beginning to define our Marketing and advertising campaigns, since it allows us to customize them even more, emphasizing what users demand and achieving much better results.

Requirements to make a good segmentation:

To define this concept a little more and to better understand its meaning, a market segmentation must meet at least 4 important characteristics:

1. It has to be measurable

You must be able to quantify the size of the segment and understand its peculiarities (such as age, gender or purchasing power, among other criteria).

2. It must be accessible

You have to know how to find that target audience to whom your products and/or services are really solving their needs.

3. Use a profitable sample

The segment must be large enough for your investment to be profitable when carrying out advertising campaigns. But, at the same time, small enough so that the customization of our strategies has a better impact on them.

4. It must be attractive and actionable

So that you can work on your Marketing strategy by bringing your products and/or services closer to that segmented audience.

Why is it important to segment the market?

Market segmentation divides the different groups of potential customers based on common characteristics , such as age, consumption habits or income, among others.

All this information helps you optimize your products and/or services, managing to connect with customers and helping them meet their needs. This is a great advantage for your company because you increase your sales .

Benefits of segmenting your customers

There are 3 other reasons why you should do market segmentation in your company.

Let’s look at these advantages:

1. You can better identify the needs of your customers

Knowing them in such detail helps you understand what they need and how you can help them with your products and/or services.

2. You reduce costs and increase ROI

When it comes to advertising campaigns to bring your catalog closer to them, you know where you should direct your efforts. In this way, you make the campaigns more profitable , significantly reducing costs.

3. You build customer loyalty

Your clients will want you, and not your competition, because you know how to show them what they need, when they need it . In this way, you turn your brand into a reference for them.

What market segmentation criteria to use?

Before starting, you must be very clear about the criteria that you are going to use and what strategy you will carry out.

Segmentation criteria

We can delimit different classifications of the same target audience, according to some criteria or types of specific variables. A very common division consists of defining these segments according to the following 5 variables.

  • Geographical: country, region or city of the world in which they live and their climate and territorial qualities.
  • Demographics: race, age or generation, gender and sexual orientation, family, social status, profession, education, religion and cultural traits.
  • Psychological: values, attitudes, personality, interests and consumption habits.
  • Socioeconomic: lifestyle, income level, socioeconomic status, etc.
  • Behavioral: level of how ready you are to consume, frequency of use of the product, loyalty to the brand, use of related products, influences on your decision making, etc.

As we will see immediately, it is not just about making a selection of like-minded people, but you must guide it in line with the strategy that we will design later.

Segmentation Strategies

These are the 4 most common strategies that companies do:

1. Undifferentiated segmentation

It consists of offering the same product to all potential customers of the company.

In other words, the company launches the same offer for its entire target without taking into account the differences between the segments.

2. Differentiated segmentation strategy

In this case, the company does take into account the different audiences that it has previously segmented . Here you change and customize the communication strategy in your campaigns for each one of them.

3. Personalized marketing

This strategy takes differentiation from the previous model to an almost custom extreme .

It’s as if each customer is a segment of the company unto itself. For example, it is very fashionable that luxury car brands allow you to customize yours in some very specific details.

That’s a custom segmentation strategy.

4. Focused segmentation

Here the company directs all its resources towards a single segment within its target audience .

This strategy is useful when you do not have much budget . You analyze all your segmented audiences and choose the one that can become more profitable.

Although, this strategy is not always the most recommended. Because? Because it can increase your costs in the medium and long term, since your customers are going to change their tastes or, due to the entry of new competitors that saturate this segment.

How to do a market segmentation step by step?

Now I am going to show you the step by step of the process that you should follow to carry out a basic segmentation.

1st. Analyze and divide the global market

Your company’s global industry is made up of a set of consumer groups, both existing and potential customers, for a specific product and service or for a family of them.

As we discussed earlier, the first thing you have to do is divide these consumers based on these 5 variables:

  • Geographical : they are the regions, countries or cities.
  • Demographics : Here are the data such as age, gender, profession, social class, educational level and religion.
  • Socioeconomic: income and socioeconomic level.
  • Psychographic : includes the lifestyle and personality of the clients.
  • Behavioral : these variables provide you with information about the person’s attitude towards your product, that is, how often they use it or how loyal they are, among others.

2nd. Evaluate the profitability of this market niche

Once you have segmented the markets, you have to analyze which of those niches are most profitable for your company.

I do not advise you to make a subjective assessment, help yourself with questions like these that I share below:

  • Is it an accessible niche ? Do I have the necessary resources to be able to invest in it?
  • Is it actionable ? Does it allow me to make a long-term Marketing strategy?
  • Is this segment measurable ? Can I know its size and potential profitability?

3rd. Select the right target market

With all the information you already have in your possession, it is time to choose which group(s) you are going to address within your target audience .

4th. Create and define your target audiences

You are already clear about your business model and the market niche you want to work on. Now you have to get to know the potential customers in it better.

To do this, I recommend creating a buyer persona profile .

To do this, create a list with questions that you can answer and help you learn more about the customs, habits and pain points of your potential customers.

Knowing what means they use to make their purchases, what evaluations they make before buying, where they go to find what they are looking for or how often they buy, for example, will help you better understand how you can present your products and/or services to them.

Remember that the more you know about your ideal client, the better your communication strategy will be . Present them with the benefits that meet their needs, and I assure you that you will get a very high conversion rate.

From this moment you can start thinking and designing your different strategies.

5th. Design your strategies

Now is the time to start designing your digital marketing plan . Many companies make the mistake of starting work without analyzing any of the above points, which I have just shared with you.

Market segmentation example

I want to share with you a very popular and simple example from the fashion industry.

I am referring to the Inditex group, this Spanish fashion giant has specific brands and stores for various market segments that share similar characteristics, although each one has its own more specific characteristics.

Inditex has been able to segment a mature and quite complex market , finding a catalog of brands and products suitable for the different consumers that are within each of its segments, and it has done so in this way:

  • Zara : is the leading and most recognized brand of the company. It offers fashion for the whole family , with excellent value for money. His audience is middle-class men, women and children.
  • Zara Home : is the line of clothing and accessories for the home, which more or less maintains the same objective and audience as the Zara store itself. Although it offers products related to the home sector.
  • Pull and Bear : the audience for this Inditex brand is young and seeks more casual urban fashion trends.
  • Stradivarius : low-cost clothing, focused on young women with an informal and dynamic style.
  • Bershka : with daring and provocative fashion trends, the target audience for this brand are teenagers with a very transgressive character.
  • Massimo Dutt i: focused on a middle-aged audience , initially male, but now also female. Massimo Dutti offers us quality and very elegant fashion, which fits with the cosmopolitan and more sophisticated character of its potential customers (upper middle class).
  • Oysho : maintains the same spirit and philosophy as Zara, but in the women ‘s underwear sector . It offers quality at good prices for women looking for the latest fashion trends.


Market segmentation helps you bring your products and/or services closer to your company’s potential customers .

Knowing the tastes and needs of potential customers, in addition to their life habits, manages to find that necessary connection point to awaken the need to buy in your company.

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