What is it and why do it?
Segmentation is the process by which you divide your market – customers, employees and/or stakeholders – into groups of similar characteristics.
There are three main reasons why organisations segment the market:
- To identify the market opportunity – mapping all the segments across the category to identify which segments your organisation is currently targeting versus your competitors, and where the opportunities lie for your brand, employer brand or portfolio of products and talents.
- To build a common platform that is relevant to all segments – building business, brand, employer brand or creative strategy.
- Targeting individual segments – to target individual or groups of similar segments with relevant value propositions, products and services, communications messages and experiences for that segment.
Segmentation can be performed against population statistics of which there are two main categories, Demographics and Geographics. These tell you who and where.
- All audiences – age, gender, race, employment, education, income, marital status, life-stage
- Specific to employees or B2B key contacts – occupation, seniority, salary levels, tenure, career stage
- Specific to shareholders – size of investor, quantity invested
- Specific to partners, suppliers or B2B companies (sometimes called “firmographics”) – size of organisation, numbers of employees, industry
- All audiences – country, state, local government area, postcode or suburb
- Specific to employees or B2B companies, related to organisation structure – business area, department, team location
The other two categories, Psychographic or Behavioural segmentation tell you why they are doing what they’re doing. These categories tend to be more effective for achieving identifying, defining and targeting your audience because they influence people’s decisions more than their demographics or geographics.
- All audiences – values, beliefs, attitudes, emotions, needs, personality traits, interests and lifestyle
- Specific to employees – employment motivations, attitude to change
- Specific to shareholders – investment values and motivations
- All audiences – Purchase behaviour, occasion-based purchasing, experience or benefits sought, customer engagement/loyalty
- Specific to employees – level of engagement/loyalty, experience or benefits sought, leadership style
- Specific to shareholders – investing behaviour
Segmentation will often use a combination of these. Psychographic segmentation is based initially on demographic segmentation and the key demographics and geographics will form part of the description of the psychographic segment, so they can be easily quantified and targeted for media selection.
For example. If you think about your friends, you’d primarily seek like-minded people with whom to spend time (psychographics) not people the same age as you (demographics) or in your same area (geographics). However, age and location likely play a role in your available sub-set and in your decision-making.
How we go about it
Segmentation can be purely qualitative, quantitative or a combination of both.
Secondary research is conducted initially to identify sample parameters and gaps in understanding across demograhics, geographics, behavioural and psychographics, and develop initial hypotheses, market dimensions and segment dynamics to explore.
Many organisations will have access to demographic, geographic and behavioural data that either has been or can be used for segmentation – such as digital, database, shopper and talent data.
Some organisations already have psychographic segmentation, either at the brand or category level, or possibly in a parallel market. Whether its immediately applicable or not, it’s a good idea to understand what has been previously done, any pros and cons with the method, findings and its usability within the organisation.
We offer all services within our extended team, as well as collaboration with, planning for and briefing your organisation’s internal team or preferred suppliers.
We’re familiar with a wide range of branded segmentation tools, understand how to interpret and incorporate them within our approach as inputs or outputs – such as TNS Needscope, Archetypes, Heylen, Schwarz, Roy Morgan Values Segments, Helix Personas and Mosaic.
We have a range of experience across consumer, employer, business and aligned customer/employer brands
Code of Professional Behaviour
As Qualified Professional Researcher and member of The Research Society, we are bound by the our Code of Professional Behaviour to carry out research activities in a professional and ethical manner, with particular focus on protecting the respondent.
Upon receipt of your brief, we will scope the proposal with recommended research design, methodology and sample. To scope, we ask for your best attempt at the information below in however we understand you may not know all the information yourself, or as part of a larger brand or employer brand project it hasn’t been defined yet. Most of these areas we will help you define more tightly through the process, in particular the problem and sample.
When you’re briefing us, please include your best attempt at the following:
- Definition of the problem (that’s led to the brief)
- Background (to business, brand, employer brand, customers, employees, stakeholders etc)
- Business objective and problem
- Research objectives (including specifics you’d like to understand)
- How the information will be used (including specific action standards)
- Target market (demographic, geographic, psychographic, behavioural)
- Research in your business (including department/responsibility, general attitudes towards research and quantitative vs qualitative research, existing research/information sources)
We will look at your brief and recommend the most effective combination of secondary and primary research, qualitative and quantitative research, creative solutions and collaborative partners to meet your needs.
Download a copy of the research brief here: THBC RESEARCH BRIEF
How can we help you?
Please contact us to discuss further what we can do for you.