Market Segmentation

The success of your Strategic Web Marketing Plan depends in large part on how well you define your customer base. This is true because if you can identify and segment your qualitative customers from available shoppers then you will reduce customer acquisition costs and increase ROI.

But let's take a step back and describe at length market segmentation.

Market segmentation is the process of dividing different homogeneous groups by a prescribed set of criteria for the purpose of target marketing directly aligned group variables.

Through market segmentation you will be able to test different sets of promotions to different groups that are all catered to the specifics of each segmented group. This granular focus insures that you as the marketer are: meeting the needs of the segmented group by directly identifying with them; increasing the conversion rate (the ratio of orders to shoppers); and lastly to increase the ROI for your shareholders.

When you segment your market five variables should always be present:

• a market segment should be measurable


• a market segment should be accessible by communication and distribution channels


• market segments should differ in responses to your marketing mix


• market segments should be durable (not changing too quickly)


• market segments should be substantial enough to be profitable

There are four primary bases by which you can segment a marketplace:

• Geographic segmentation - defining a homogeneous group based on regional variables such as region, climate, population density, and population growth rate.

• Demographic segmentation - defining a homogeneous group based on variables such as age, gender, ethnicity, education, occupation, income, and family status.

• Psychographic segmentation - defining a homogeneous group based on variables such as values, attitudes, and lifestyle.

• Behavioral segmentation - defining a homogeneous group based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought.

Until next time!