Segmentation Or Identity

When marketing a product, it’s generally a good idea to split up the market so you can understand more clearly who you’re targeting, and who you’re not.

Segmentation

The common way of doing this is by segmentation. For example, Ikea normally aims its products at people aged around 30 (among other things) – that’s a type of segmentation by age. Here are some ways you can segment*:

• Geographic: Country, region of the country, urban / rural areas
• Demographic: Age, sex, family size, income, occupation, education level, religion, race, nationality
• Psychographic: Social class, lifestyle, personality type (e.g. introvert / extrovert)
• Behavioural: Light / heavy product user, brand loyalty, usage type (e.g. in combination with another product)

Some of those types of segmentation are independent (e.g. age, gender, nationality) while some could be dependent on each other (geography with nationality, personality type with brand loyalty). So picking your segmentation combination is important. Even worse, there’s no obvious formula for doing a good one.

Identity

Another way of looking at things is to use an identity. It’s a very similar way of looking at things, but acknowledges that one person might belong to more than one segment. For example, a businesswoman might be all Armani at work, but a Miss Sixty consumer at the weekend. So, do they prefer sharp design or bohemian? The answer is both.

Why is this important? Well, if we can find a product that aims at multiple identities – for example, a car that appeals to the sporty AND the practical side, it’s more appealing.

Which one should I use?

The easy answer is that it depends on your product / service. But that’s a cop out.

My opinion – it depends on the size of your subset. Targeting a specific combination of identities is stronger, but it’s going to be a smaller target than just the segment. If your product is an expensive one (like a house or a car) then you don’t have to have a large market, and you can think about identities. If your product is mass market and / or cheap, think about segmentation, so you can get at a specific need.

It’s also worth considering if your product will be used in a specific environment (e.g. a suit) or a more than one environment (e.g. a car or a laptop). With the latter, thinking about identities that cover each of the environments becomes more useful.

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*This is adapted from Doyle’s “Marketing Management and Strategy”, a dull but useful book.