The segmentation strategy is to divide the market into different segments, including consumers, look for identical benefits and to focus on the most promising segment (s) for the company to address their specific products.
Its justification lies in the fact that an offer, regardless of its quality, cannot suit everyone.
The segmentation study identifies the segmentation criteria, to form groups of consumers with homogeneous purchasing behaviors and to define their needs and expectations.
Three elements characterize a good segmentation:
- relevance – the ability to separate the segments (clearly different profiles)
- capacity to the prediction – the ability to predict the customer choice
- ease of implementation – the time, the cost of the study and the ease of identifying segments in the company’s database
Generally, the segmentation study includes two phases:
- qualitative research (focus groups and face-to-face interviews) to identify some possible segmentation criteria from customer profiles, purchasing behavior, motivations, habits, attitudes and expectations
- quantitative study (telephone or Internet survey) to
- define a sufficient number of segmentation axes (principal components) to summarize information without starting too loose
- interpret segmentation axes identifying baseline variables to which they are most related
- check the relevance of the segmentation obtained by the qualitative method and amend if necessary