Market Segmentation in B2C: Making Sure Your Product is Presented to the Right Audience

by Evan Junker | Aug 21, 2020

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Wouldn’t it be amazing if you could read the minds of every single potential customer out there, and devise a hyper-intelligent form of marketing that directly targets them with a pitch that’s based on their wants and needs?

While we don’t have that technology yet, we do have the next best thing: market segmentation.

Market segmentation is a powerful strategy that allows you to target consumers more precisely, resulting in more successful marketing, with enhanced ROI.

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What Exactly is Market Segmentation?

Market segmentation is the process of identifying certain groups of potential customers within your target market, based on their shared characteristics. There are 4 basic types when marketing to customers (B2C): behavioral segmentation, psychological segmentation, demographic segmentation, and geographic segmentation. Each of these categories can each be further divided into subcategories and will have different applications.

What Are the Benefits of Doing Market Segmentation?

Think of it this way- the question in this subtitle is basically just another way of asking, “what are the benefits of understanding your audience more precisely?” The possibilities and benefits are unlimited. Knowing your audience is the key to any successful marketing effort, and helps you to develop superior engagement strategies.

Market segmentation will help you to:

  • Target a receptive audience with powerful advertising that directly addresses their biggest, most relevant pain points and aspirations
  • Optimize your branding to resonate with your target audience, and outshine competitors
  • Calibrate your marketing strategies
  • Make more informed decisions regarding the development of new products, services, and features, improving your ability to meet the needs of your customers
  • Identify gaps in the market that none of your competitors have noticed
  • Improve conversion and performance across any platform
  • Gain an edge over your competitors, who don’t bother to properly plan out and use market segmentation-enhanced strategies

Any marketing campaign, product launch, etc. that doesn’t properly target the ideal segments of its audience is effectively losing money. Let’s get more detailed on how you can go about doing market segmentation.

The 4 Types of Market Segmentation

When it comes to B2C, there are 4 different types of segmentation that you can perform.

Geographic Segmentation

Selecting groups of customers based on geographical location- state, region, city, county, city district, etc. This is the simplest form of segmentation.
• Examples of use: If you sell heavy winter coats, you will have better results selling to people who live in colder climates. Marketing to individuals who live in places like New England or Alaska will be ideal. Marketing to individuals who live in Nevada, of course, would be a mistake.

Behavioral Segmentation

Selecting groups of customers based on measurable actions that they have taken in regards to purchasing or interacting with your brand- spending habits, interactions with your brand, brand loyalty, etc.
• Examples of use: If you want to improve your email sending reputation (and therefore, deliverability), you should send emails to subscribers who most often open, click-through, and/or purchase from your emails. You can also use consumer behavior to determine which buyers are more prone to impulse purchases, sharing your brand’s content on social media, and more.

Psychographic Segmentation

Selecting groups of customers based on their psychological profile- personality, values, ethics, aspirations, fears, etc. While this has the potential to be extremely powerful, this is a tricky form of segmentation to use, due to the subjective nature of it, and difficulty in gathering relevant data.
• Examples of use: If you sell content that teaches how to achieve financial freedom, you should try and target people who are ambitious in terms of money. If you sell discounted travel packages, you should target people who love travel.

Demographic Segmentation

Selecting groups of customers based on demographic characteristics: age, gender, religion, career, income, education, etc. This is a very practical, simple, and commonly used form of segmentation.
• Examples of use: If you sell homeowner’s insurance, you need to make sure your marketing targets people who actually own their home. If you sell luxury cars, you should target customers with higher incomes.

Simple enough, right?

Let’s look at an all-in-one example that makes the whole concept extra clear. Imagine you were launching a Facebook ad campaign to promote your new surfboard.

  • If you neglect geography, you will waste money on ads targeting people who live away from the ocean, who can’t use a surfboard
  • If you neglect behavior, you may waste money on ads targeting people who only buy sporting equipment in person, and would never buy a surfboard online
  • If you neglect psychographics, you may waste money on ads targeting people who don’t like sports and would never impulsively buy a surfboard
  • If you neglect demographics, you may waste money on ads targeting elderly folks who, typically, aren’t able to surf
  • Your ideal ad will target people who live on the coast, shop online at your sports equipment store, have previously bought items for aquatic sports, and are young and fit. Market segmentation is how you can achieve that!

How Do I Do Market Segmentation?

It all just comes down to your ability to gather, organize, and use metadata about your target audience. There are different strategies and tools, depending on the type of segmentation you plan to do- we will discuss some of them, here.

Cluster Analysis

This is a specific type of software offered by some companies. It does require an operational understanding of your target audience and market, but it makes it very simple to utilize that understanding. Simply put, you find a software that does cluster analysis, plug in the demographics and characteristics of your target audience, and it will give suggestions for marketing opportunities.

Email Tools

Mailchimp, ActiveCampaign, and AWeber make it incredibly simple to divide up your email list into different segments- most notably behavioral. You can strike with strategies such as abandoned cart emails, upsells, and promotions. You can also use email to measure your customer satisfaction and find new opportunities. This makes email marketing a very powerful, easy-to-use tool for segmenting.

Tools from Google

Google has made it simpler to gather and use data on any given target audience, thanks to Google Analytics. You can even use Google Optimize to A/B test, and build strategies that get better results with your web traffic. The best part? It’s all free (if a bit complex to use).


Tools like Semrush and Sitebulb help you track where the web traffic is going to, within your niche. There are other tools that allow you to analyze your competitive place based on your desired keywords as well as the key words and phrases that your site currently ranks on.

Other Advertising Tools

Facebook ads are, in part, so powerful, because of their ability to help target people based on psychographic, demographic, and geographic factors! This can be optimized with tools like FB Pixel, which does an incredible job of collecting data, tracking conversions, and segmenting your audience.

Keep in mind that before using any of these tools (aside from, arguably, the email tools), you need to have built a solid background on the general profile(s) of your audience.


Market segmentation is a very powerful practice. It gives a dramatic increase to the efficiency and power of any efforts in advertising, product development, market research, and so much more.

It can be tricky to do and requires an integrated approach using different technologies.

If you’d like to use this cutting-edge tactic to take your marketing and engagement to a higher level, and you want to do it right and make it quick and painless, book an appointment and let’s explore how we can support you.

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Our regular meetings will continue, but they will be online using zoom.

Atlanta Business Owners Roundtable (ONLINE ONLY)

Our regular meetings will continue, but they will be online using zoom.

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