Market Segmentation Research: a 101 guide for beginners

Do you know what marketing segmentation research is and why should we do it?

When used correctly, the main applications of this tool can help your company to face marketing challenges. That is why we will teach you what it is, for what it is for and how to use it in your company.

Segmentation research, as the name suggests, consists of dividing consumers and users of a product and/or services into segments. The action of segmenting your market is done through segmentation analysis, where we can categorize the public by age, gender, territory, tastes, behaviors, pains, preferences and other characteristics.

The objective of segmentation is to help make the company’s marketing strategy clearer and more certain, aimed at a specific target within these segments.

When we carry out market research, we are taking a step towards the campaign’s assertiveness, due to the definition of its target audience. This strategy will help you to better define your audience and understand their needs, preferences and tastes helping you to develop as a company. It also will help you identify possible  market gaps that other brands are not aware of and bring differentials to your service or product.

Having well- defined publics means understanding that despite “thinking alike” for consuming and/or valuing the same type of product or service, each group has its own preferences and characteristics, and it is from this understanding that the company is able to create marketing campaigns with more effective messages to reach the target audience.

There are several ways to carry out market segmentation study  and categorize the segmentations. The five main ones are: geographic, demographic, psychographic, behavioral and firmographic, which is more used for the B2B market.

• The Geographic category is related to the consumer’s region, the size of the municipality in which he resides, the concentration of people in the region and even the local climate;
• The Demographic is characterized by age, gender, occupation and income of the consumer;
• The Psychographic is defined through the consumer’s lifestyle, their values, preferences and their opinions;
• The Behavioral category is related to the customer’s behavior in relation to products and services, and at the time of purchase;
• Firmographic, as mentioned before, is the main category for segmenting the B2B market, and is related to characteristics such as industry, number of employees, type of clients and company size.

Despite the fact that market segmentation may seem abstract, it is possible and extremely important to quantify it. When we consider the Latin American reality, market segmentation and public definition can be defined for three main reasons and objectives.

1. In Latin America we find a great variety in the styles of the consumer public, mainly due to the mixture of cultures that expands across the countries of the region. It is worth noting that these cultural differences can occur within the country itself, as is the case in Brazil when we look at the Northeast and the South regions. Depending on the region, each audience has its specificity – even if it consumes the same product, it may respond better to different messages. That is why it is important to tailor campaigns to different targets.

1. In addition to cultural differences, the economic situation of each region has a direct impact on the targeting of the public. High tax rates and unemployment have shown a mix of habits, especially after the latest world events (pandemic and international conflicts), with buying behavior often uncertain, it is important to identify the risks and investment opportunities in the regions.
2. Another very important point that we must pay attention to is that the consumption mode can also be carried out due to different behavior profiles and desires, and therefore we must be attentive to the novelties and characteristics of the market and to the consumer generations, and how this influences at the time of purchase decision. An example could be the target facing the Z and Alpha generations, who tend to buy on impulse and or influence but with greater social awareness than previous generations.

After reviewing the why of market segmentation research and why it matters when choosing a marketing strategy, check out our blog for more research tips and insights. And get in touch with our team to find out about these and other services to help you and your company enter Latin American markets.