Blogs

Big data is no longer an abstract concept. It is a reality that has altered the way we think, live, and work. From revolutionising the process of research to transforming the way businesses make decisions, big data has had a profound impact on our lives....

Artificial Intelligence (AI) has been a huge game-changer in the marketing world. It has enabled brands to effectively target their audience, personalise their messages, and even automate mundane tasks. But what about below-the-line marketing? AI is slowly making its way into this arena and it’s...

Introduction It’s no surprise that consumer behaviour has changed drastically in the past few years. From online shopping to digital marketing, there are so many factors driving consumer decisions. But what exactly is causing convergence and divergence in consumer behaviour? How can we use this knowledge...

If the marketing approaches differ in B2B and B2C business, it is obvious that the market research for these will differ as well. B2B indicates the marketing relationships between business-to-business, and B2C denotes the marketing connections concerning business-to-customer. In both cases, an exchange of products/services is...

The advantages of Market Research are highly underrated. A thorough market analysis enables organisations to improve and create the best versions of themselves. Despite knowing the benefits, companies don’t understand how neglecting to do market research can hurt your company. Here are some of those: ...

Ever wondered how your 5-year-old niece knows more about iPad features than you? It is indeed intriguing and at the same time terrifying to watch. By the age of 10 kids can outsmart their tech-savvy parents’ safe locks and no one ever even comes to...

Building customer loyalty is expensive. After you’ve acquired a customer, losing them is even more expensive. Customer retention is a vital key performance indicator (KPI) for all businesses to measure, improve, and build upon. In this article, we will elaborate on the definition of customer retention,...

In our previous blog, we discussed how to identify ideal market segments and target audiences for your business. While evaluating and selecting market segments it is also important to consider the overall industry attractiveness (Porter’s Five Forces) and company objectives and assets.

In this blog, we will discuss the strategies or the different approaches you can take to segment your customers. Below we have the main four segmentation strategies.

Levels of market segmentation: full market coverage, multiple segments, single segments and individuals as segments

1.    Full market coverage (or undifferentiated segmentation strategy)

This approach applies a single marketing mix to the entire market. It is when a business tries to serve all consumer groups with the products or services they might need.

In the undifferentiated segmentation strategy or mass marketing, a company goes after the whole market with one offer, ignoring segment differences. Such a strategy requires huge capital and usually, only large corporations can achieve it (Microsoft, General Motors, Coca-Cola).

A full market coverage approach is appropriate when consumers’ preferences are not so relevant and the industry doesn’t manifest natural segments. It leads to standardisation which in turn determines lower costs or higher margins. However, the increasing proliferation of marketing communication channels makes it difficult and expensive to reach a mience.

2.    Multiple segments specialisation (or differentiated segmentation strategy)

A business may specialise in a product or service while targeting multiple segments that have similar traits. For example, smartphone companies don’t target only those who need to communicate (make calls and send messages), but also photography and music enthusiasts as they integrate more powerful features into their smartphones.

Companies can also specialise in a market serving multiple needs of a specific group of people.

A multiple segment specialisation approach allows businesses to diversify risks. That’s why it can be called a differentiated segmentation strategy: each single market segment has its marketing mix.

3.    Single-segment concentration (or concentrated segmentation strategy)

In this approach, businesses target a single market segment and establish expertise in that industry. They conduct good market research and apply a single marketing mix to a given segment: a concentrated segmentation strategy.

An organisation gathers extensive knowledge of consumers’ needs and naturally gains a strong market presence. Marketers can also divide the industry into sub-segments and aim for a specific niche.

4.    Individual marketing (one-to-one marketing)

Thanks to Artificial Intelligence (AI) and Machine Learning, it is possible to create personalised purchasing experiences. For example, HubSpot’s clients can create tailored web pages according to the specific prospect who is visiting the website at a certain time.

Organisations can also create tools, platforms or interfaces that users can use to personalise their products or service.

Nevertheless, customization is very difficult to achieve for complex products or services and may raise the price by more than the customer is willing to pay.

Sometimes, digital marketers don’t understand the value of personalization. This is the reason why we want to end with a quote:

“Personalization - It is not about first/last name. It’s about relevant content.”