Segmentation

Segmentation is dividing a market into groups of buyers who respond comparably to an offer: by need, buying situation, behaviour or sometimes demographics. Good segmentation is measurable, reachable, substantial and stable enough to build policy on. The pitfall is segmenting for its own sake: elegant research clusters that barely exist in actual buying behaviour, while buyers of competing brands look much alike in purchase data. Productive use therefore focuses less on who the buyer is and more on the situations in which buying happens: need and occasion segments steer portfolio, message and channel without losing sight of the broad category buyer.

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