Types of Marketing Segmentation

Reaching Your Ideal Audience

The ultimate goal of effective marketing segmentation is simple yet powerful: to ensure that each market segment finds a product or service that perfectly matches its needs. This alignment drives customer satisfaction, loyalty, and ultimately, business success. Segmentation is all about relevance, and achieving it involves breaking down your audience into smaller, more targeted groups.

Marketers can segment audiences using four primary categories:

  • Demographics
  • Geography
  • Behaviour
  • Psychographics

Each of these approaches allows businesses to tailor their strategies, creating products or messaging that resonate more deeply with specific consumer needs. Let’s break them down further to explore their practical application.

The Marketing Made Clear Podcast

This article features content from the Marketing Made Clear podcast. You can listen along to this episode on Spotify:

1. Geographic Segmentation

Geographic segmentation focuses on location-based variables, allowing companies to target customers in specific areas. This is especially relevant when logistics, climate, or regional preferences dictate how products are marketed or distributed. Key geographic variables include:

  • World region or country: For example, targeting Western Europe vs. the UK.
  • Regions within a country: Such as Tuscany in Italy or Yorkshire in the UK.
  • City or town size: Useful for products that thrive in urban areas, such as certain apps or services.
  • Population density: Targeting densely populated cities vs. rural areas.
  • Climate: Marketing products like air conditioning to warmer climates or winter gear to colder ones.

As an example, a company like Paleo Ridge selling frozen raw dog food may target the UK but exclude regions like the Scottish Highlands or remote islands due to delivery constraints. It’s physically not possible to keep the product frozen to reach any further afield. Geographic segmentation ensures their messaging reaches customers who can actually use their product.

2. Demographic Segmentation

Demographic segmentation is one of the most commonly used and easiest to understand. It involves dividing the audience based on quantifiable characteristics, including:

  • Age
  • Gender
  • Family size or life-cycle stage (e.g., single, married, married with children)
  • Income (individual or household)
  • Occupation
  • Education
  • Religion
  • Ethnicity
  • Generation (e.g., Baby Boomers, Gen X, Millennials)
  • Nationality

A wedding band (like my old band The Gun Show) might use Facebook Ads to target newly engaged individuals within a specific region. By leveraging demographic data, the band ensures their ads reach people most likely to be interested in their services.

3. Psychographic Segmentation

Psychographics delve deeper into customers’ lifestyles, interests, and personalities. This type of segmentation is more nuanced and can include:

  • Social class: Categories like working class, middle class, or upper class – I personally hate this as a classification!)
  • Lifestyle: Grouping customers as achievers, strivers, survivors, or based on hobbies like music or sports.
  • Personality: Traits such as compulsive, gregarious, or ambitious.

While social class remains a debated variable, lifestyle and personality offer more practical insights for targeting.

Targeting “parents who want to save time grocery shopping” was a clear psychographic segment for online delivery services before the pandemic. Since then, online shopping has become mainstream, but tailored messaging around the driver to shop online still resonates with niche customer needs.

4. Behavioural Segmentation

Behavioural segmentation focuses on customers’ actions, providing valuable insights into their interaction with products or services. Behavioural variables include:

  • Occasions: Regular, special, or one-off events.
  • Benefits sought: Quality, service, economy, convenience, or speed.
  • User status: Non-users, lapsed customers, new customers, or regular users.
  • User rate: Light, medium, or heavy users.
  • Loyalty: None, medium, strong, or absolute loyalty.
  • Readiness stage: Awareness, interest, desire, or intention to buy.
  • Attitude towards the product: Enthusiastic, positive, indifferent, negative, or hostile.

Again, Facebook Ads allow businesses to target behavioural traits like “in-market audiences,” identifying users actively searching for products in a specific category. For instance, if someone has been browsing skincare websites, they’re likely in the market for skincare products.

Bringing It All Together: Practical Application of Segmentation

In the real world, effective segmentation often blends these approaches to create detailed audience profiles. For instance:

  • Start with geographic and demographic variables (e.g., targeting 20-40-year-old women living in London).
  • Narrow the audience using psychographic insights (e.g., women interested in sustainable skincare).
  • Finally, refine it with behavioural data (e.g., those actively searching for eco-friendly skincare products).

Platforms like Meta (formerly Facebook) offer robust tools for building such multi-faceted audience profiles. By layering these segmentation types, businesses can focus their efforts on highly specific customer groups, reducing wasted ad spend and increasing conversion rates.

The Takeaway: Segmentation for Success

Marketing segmentation isn’t about excluding potential customers; it’s about reaching the right customers with the right message, at the right time. Each segmentation type offers a unique lens through which to view your audience, helping you create products, services, and campaigns that truly resonate.

By understanding the nuances of geographic, demographic, psychographic, and behavioural segmentation, you can ensure your marketing efforts are not just relevant but also impactful. Segmentation turns a broad market into a series of targeted opportunities – and that’s where the magic of marketing truly begins.