Market Segmentation

Market segmentation is all about focus. To attract and retain customers, companies must identify and understand their target customer and focus their positioning and their offering to deliver something that is unique and relevant to customers.

MMR Strategy’s market segmentation studies use a method we call Choice-Based Segmentation, which focuses on two types of choices: the choices that customers make about which products and services to purchase, and the choices that companies make in how to serve customers and prospects. Put simply, Choice-Based Segmentation uses market segmentation to identify strategies that cause customers to choose our clients over competitors.

MMR Strategy’s market segmentation studies consider a wide range of variables, including demographic segmentations, behavioral segmentations, and attitudinal segmentations. (See diagram below.) We survey customers and conduct analysis using a combination of experienced judgment and statistical methods such as factor analysis, cluster analysis, and multivariate regression.

We have found that market segmentation is typically most powerful when it is based in consumer attitudes and consumer needs. Our needs-based segmentation studies identify unmet needs, and specify the best strategies for companies to grow profitably by serving those needs.

MMR Strategy’s market segmentation studies help clients answer crucial questions, such as:

Customers and Segments: Which are the core market segments to target?
Buying Behavior: Where do customers in key market segments shop and buy? What are their core needs?
Positioning and Communication: What promise or value proposition should we seek to deliver for consumers in our key market segments?
Brand Image: What is our current brand image for consumers in key market segments? How can we build and leverage brand equity?
Competition: Who are the key competitors in each market segment? Where and how should we compete?
Resource Allocation: How do we invest resources in each market segment to deliver on the positioning and generate growth?
Sales: Is demographic segmentation the best way for field sales to identify and target prospects?

Click here to view our Choice-Based Methodology for Market Segmentation

Case Study

MMR Strategy helped a leading household appliance manufacturer develop marketing, product design and distribution strategies targeted at key segments.

Problem	Analysis	Results
A household appliance manufacturer wished to identify key segments to focus marketing, product design, and distribution strategies. They wished to identify customer buying behaviors and preferences by brand, retailer, and distribution channel. The client wanted to understand where to invest in the purchase cycle to generate growth	Using statistical techniques such as factor and cluster analysis, we identified and described distinct segments in the product category. We identified key segments with the best opportunity for growth and how to effectively reach these customers. We evaluated customer satisfaction, likelihood to purchase, attribute importance, brand ratings, attitudes, and purchase behaviors.	The client adjusted its positioning strategy to focus on those performance attributes most important to the target segment They allocated resources to improve product design in areas consumers rated as important, but where they received low ratings. They were also able to make informed decisions about how to best execute their distribution strategy.