Why Should You Segment Your Market?

Why Should You Segment Your Market?

Different people have different dreams, desires, and needs. When it comes to their consumer behavior, different people buy the same products for different reasons. So, it is your job as a business owner to reach them in a way that is specific to them. 

When creating a digital marketing plan it is important to personalize the message, but knowing that each person has different needs presents a problem for marketers in terms of personalization. It is impossible to personalize the message to every person; however, there is a way to balance between personalization and generalization. 

Market Segmentation 

The best way to balance between the two is by grouping your desired customers together based on similarities. In this case each group of potential customers will have certain traits that identify  them, and from there you can make subgroups that pertain to a certain category. 

A common mistake that I see frequently is business owners saying “I sell to anyone.” In other words the business owners are saying “I will sell to anyone who will buy my product or services.”

However, by trying to sell to anyone and everyone, they will most likely end up selling to no one!  

So, what I encourage these business owners, especially those in the early stages, to do is look at their services and decide what they would like to specialize in and to whom they would like to sell. 

For example , if you have a balloon decorating business you would have to choose what type of events you will be decorating and at what budgets. Once you’ve determined your product/ services and pricing, you can then divide events into groups. You may have a wedding group, and a birthday group where your clients are in one of these two categories. 

By breaking the market into groups, it becomes much easier to know and understand the needs and wants of the potential customers in the group. For example, the birthday group may want something simple; whereas, the wedding group may want something lavish. Knowing this will allow you as the business owner to personalize your ads towards the correct group based on the information that is known about the group. 

Why Segment? 

First, as we said earlier, it is impossible to sell to everyone because “everyone” is a very big and vague term that cannot be satisfied. 

Second, grouping leads to a better market understanding, which leads to more personalized messages and not just in terms of distribution. It is easy through current technology to target particular groups of people based on age, gendre, location, interests, and so forth. However, the messaging remains the challenge. If the A group is receiving the B group messaging, the ad will most likely not be effective. However, by understanding the needs of every group we can then create content that is fitting of that segment and then distribute it through digital marketing in a more effective manner. 

Third, by breaking the market into segmented groups, it becomes easier for the company to identify the most profitable group of customers and prioritize the services the company offers them. This will maximize the return on investment.

Fourth, companies that are just starting out typically have limited resources. Segmenting groups and focusing on one or two groups in the market will allow to proper allocation of these resources. In this way, the company is not trying to do everything at the same time and failing, it is focusing all its energy on solving one particular need that the consumer has. By focusing on one aspect the company will become the expert in that field and thereby become more competitive. 


In theory, market segmentation is very straightforward and easy; however, that is not the case when it comes to application. To accurately segment a market, there needs to be more than one trait in common amongst group members. Having these traits in common will help make the messaging more personalized without it being overwhelmingly personalized for the company. For example, a Justin Bieber concert is generally directed towards teenage girls that listen to that specific genre of music and generally live in the area where the concert is being held. It is not directed at all teenage girls all over the country. 

So, what does this segment have in common?

  1. Teenage girls 
  2. Genre 
  3. Location  

Another challenge is getting an accurate approximation of the segment size. A Justin Bieber concert organizer in the US, or Canada, or England can venture to book a large arena for the concert; however, that might not be the case in other parts of the world. The market simply does not look the same. 

Of course in the case of the concert there are many metrics they can use to determine the size of the market. For example, Instagram analytics can segment data based on cities. In this case the organizers can look at these and deduce whether or not a concert should be held in that area. 

Without accurate approximations for the segment size, the business owner will remain in the dark as to what his/her next step should be. 

An additional thing to keep in mind is the competition. Is there a lot of competition in the segment you have chosen to target, if so how would you differentiate yourself from them? Recall to mind our balloon decorating business example from earlier, at the very base of it, the  business is a decorating business. There are plenty of businesses competing to decorate birthdays and weddings, but not many of them are capable of doing it using beautiful balloons. For example Streamer N Balloons, a balloon decoration company, do beautiful arrangements that the most competent florists cannot compete with! Even though they are competing in a very competitive market, they have found a differentiating factor to shift the demands towards them.