4 Market Segmentation Approaches

4 Market Segmentation Approaches to Shape Your Marketing Strategies

Market segmentation is an approach that allows marketing managers to select target markets for a product and to design the most appropriate marketing mix. Results from the marketing segmentation guide marketing department formulate strategic marketing plans. Most successful firms boast of having many customers because they understand the value of segmenting their markets before implementing any marketing plans.

Whether your business operates in transport, hospitality, fast consumer moving goods, insurance, or education, market segmentation provides a visual picture for you to see your heterogeneous market where customers have varying demands. Results from market segmentation make it easier to see several smaller homogenous markets.

This practice helps you understand the different subgroups that make up your target market. It is from this that you can then tailor your products and marketing to meet the needs of different segments. If you fully understand the market, you will use your corporate resources more effectively. You will also make better marketing decisions.

In this article, I will discuss four important segmentation approaches critical in shaping marketing strategies.

1. Geographic Segmentation

Geographic market segmentation is the easiest form of market segmentation. The easiest way to think about this approach is a country. What country are you distributing your products? Thinking along this line also makes you conceptualize the messages to include on your products. The interests, preferences, and needs of customers and potential customers may differ depending on geographic locations. If you understand the geographic areas and climates of customer groups, you will tailor your marketing accordingly. For example, this might run into the colour, language on package, graphics, and flavour.

Therefore, when you think about marketing your products beyond your region into other regions, it is important that you understand your customers well.

Geographical segmentation is important if you deal with products subject to differences in regional culture, population, and climate. Geography is among the oldest basis of segmentation. Regional differences in consumer tastes for products are common. For instance, one region may have a high affinity for a barbecue, yet another area may be inclined to a healthier diet.

Different regions experience different climatic conditions. Climatic conditions can guide you on how to market your products. For instance, in an area prone to rain, products like raincoats, rubber boots, and umbrellas may do well. In hot climatic regions, however, you may sell summer wear. We expect security products to perform well in crime-prone areas. Having gardening products might limit you from marketing them to customers living in urban areas. In addition, urban gardening might differ from what happens in rural areas!
This would make it easier for you to tailor the marketing messages to suit customers living in specific areas.

2. Psychographic Segmentation

Psychographic market segmentation entails dividing your market based on consumer personality traits, attitudes, values, interests, and lifestyles. People have different attitudes, interests, and traits. For instance, while some people care about preserving the environment, others do not care at all. Some people care about good health and fitness. However, some people are not conscious about fitness and can eat anything. Some people commit themselves to sport while people have no interest in sports but prefer other fun activities instead.

Psychographic segmentation is the main driving factor in the lives of people. Psychographic segmentation determines where a person buys a home, the career path he/she chooses, and a person’s buying decisions.


When considering the personality of your customers in a segment, you need to visualize at customers. Let me try to break this down. Do you use fried chicken to target school-going children, mothers, or young boys who love playing soccer? The primary personality of your customers helps frame the products that you would want to sell to your customers.


Consumers have different lifestyle patterns that reflect many things, including their stage in life. The needs and wants of a consumer depend on their lifestyle patterns. If you segment your customers by lifestyle, you will consider their stage in life and the products that are most attractive to them at that stage.

Opinions/ Attitudes

This categorization considers the opinions, likes, interests, hobbies, religious views, political views, and cultural issues of consumers, among others. The opinions of consumers and their viewpoints have a huge impact on the products they buy.

Interests/ Hobbies

Another way that you can look at the psychology of your target customers is to speak to people that express almost similar hobbies and interests. They might be customers that love sporting activities. Therefore, to target them, you might think of products that give more calories, proteins, or clothes. Therefore, the way you tailor your message that attracts specific groups of customers to your products.

Social status

This segmentation crosses with other segmentations, including lifestyle and demographic. Consumers possess a strong psychological component in need of maintaining the social class standard. The products a consumer buys are greatly influenced by the social class/status of the consumer.

3. Socio-Demographic Segmentation

Demographic segmentation is a segmentation method that is based on variables like age, gender, and income. Market research plays a major role in identifying customer groups. Demographic segmentation helps you stay up to date with the constantly changing market. In essence, this will help you plan relevant marketing involving new product testing, launch, and exiting products.

Understanding how the population behaves towards different products based on demographic market segmentation will help you stay ahead of the competition. Some common demographic segmentation variables include:

Age/ Gender

This is one of the most important variables of demographic segmentation. Segmentation helps group together people born around the same period. People of a particular age group are likely to be interested in different products from people of another age group. The way you speak to the young generation will differ from the way you speak to the older generation. Therefore, you understand their needs based on their age.
Men and women will have different tastes and interests in the products they purchase. You need to know how gender influences buying decisions. Therefore, companies design gender-specific products.

Income / Education

Do you produce products or design services for the low, middle, or high-income category of customers? The way you design your messages across these categories of consumers will definitely be different. Besides, the kinds of customers that purchase your products might be educated but those earning a relatively lower income.

Similarly, segmenting your customers according to income might help you understand how to price your products. Before you put a price tag on a product, it is important to know whether your target market will afford based on their monthly or daily spending. This knowledge prevents you from overpricing or underpricing your products.

Religion/ Race/ Nationality

Alongside the geographic areas where your customers come from, you can translate your messages on the products to help your customers understand. More important, not just language but ethnicity can also help determine the test profile of your customers. It is only by doing this that can help you understand the needs of your customers.

Household Characteristics

Families might have different compositions in terms of the number of children or the age of children. Such families will also end up having very different needs. A family will grow up children will have different needs of families with young children (infants). The household characteristics, in this case, would cover the life stages of family members. Besides, it grows families, where couples do not have children or children up and are living alone, might be in different life stages. The best case study is where your customers comprise just newlywed couples or older couples. Understanding the needs of such couples would help craft marketing messages to gain 100% traction.

4. Behavioural Segmentation

Behavioural segmentation entails dividing your full market into smaller groups based on the customers’ buying behaviour. With behavioural segmentation, you consider the patterns of your customers, including brand loyalty, frequency, and benefits needed. You keep in mind the needs and wants of your customers based on the behaviour they portray.

Purchasing behaviour

By studying the purchasing behaviour of customers, you will understand how customers behave differently in their decision-making process. This parameter will help you understand how a consumer approaches a purchase decision. You will understand the complexity of the purchasing process, barriers along the path of purchase, and behaviours that are most or least indicative of purchase making. Therefore, a customer’s purchase behaviour can be complex, habitual, variance seeking, and dissonance reducing.

Benefits Sought

Consumers may place a higher value on certain benefits of a product over others. The primary benefits that your products offer to consumers are the driving factors for the consumer’s decision to buy your product. Two consumers may be identical in terms of demographic makeup. However, the consumers may have very different viewpoints regarding the benefits and features they look for in a product before making a purchase.

Rate of Usage

This parameter examines how customers are using a particular product or service. How often do consumers use a product? Do your customers have large children compositions that buy products in large quantities? How much time do they spend with it? User-based segments include heavy users, medium users, and light users. Therefore, using this parameter will help you understand why some customers are heavy users, while others are light users. For instance, you can come up with marketing strategies to increase the usage of lower usage customers. Families that have boys or girls love certain characters from movies. Integrating images of licensed characters into product messages might help win the heart of your customers. Besides,

Customer Loyalty

It is important to understand customer loyalty because loyal customers generate the bulk of your company’s revenue. It will cost you less to keep loyal customers than to look for new customers. Loyal customers have the highest lifetime value. It is, therefore, important for a business to find customers that are more loyal and maximize the value of loyal customers. It is important to understand what your loyal customers want. You can influence more loyalty into your consumers by understanding what they consider important. For example, a business that understands its loyal customers who purchase chicken soup would also want to understand the issues of health.

Therefore, to continue developing loyalty, such a business might package and brand their products using symbols and colours like pink could advocate for breast cancer, white for lung cancer, grey for brain cancer, yellow for bone cancer, or light blue for prostate cancer. This would be a better way of promoting a given course as developing a stronger loyalty with specific customers.

5. Data sources to understand your customer profile

Above all, understanding your customers cannot be successful without knowing where to source for quality data. We have various tools that are available to collect either primary or secondary data. The most commonly used research tools comprise:


Conducting surveys can help you understand the geographic preferences of your customers and potential customers. You can adopt several research survey approaches, including random sampling and conjoint analysis methods. You may survey your employees in different regions to know what customers expect.

Internal Sources

Internal sources can help you gather a substantial count of data around your customers. We can collect sales data from scanners. Booking data can also be available from loyalty programs or online purchase history.

Website Data

You can rely on web traffic tracking by region to identify regions where your web traffic is coming from. You can detect differences in purchase preferences by conducting an analysis of products that ship to different regions.

Social Media Profiles

Social media profiles can help you come up with geographical segments. From social media, for example, you can get insights into the location preferences of your clients. Social media platforms can help you conduct target messaging by zip code or area.

Secondary Data Sources

You can build and execute your geographic segmentation strategy with the help of third party technologies and agencies. With the help of search engines, for instance, you can target the right customers in the right regions.

Experimental Studies

Experimental data can come from laboratory or field experiments. You might want to test how your customers are responding to an advertisement. You can then use the results from the advertisement to segment your customers. Other sources could be from co-joint analysis when customers are asked to pick among product attributes.

6. Conclusion

Market segmentation is a necessary strategy that drives the marketing efforts of a company. Market segmentation also helps a company come up with custom products that suit particular segments. With various approaches to market segmentation available, you can select the one that suits your business best.
Talk to a specialist at Walaco Africa to start your journey towards understanding your customer segments. Simply call us on +2547 1091 3094 or contact us through our contact form.