The key to successful target marketing is segmentation

How to approach segmentation and target marketing

The purpose of segmentation is to identify profitable and, ideally, growing customer segments within a target market. It entails researching a market and determining opportunities. It’s especially helpful to look for underserved segments and develop your product or service and the accompanying target marketing to appeal to them.

“It’s important to design what you offer to meet your consumer’s needs rather than persuading them to buy something that meets your business needs,” says Fischer.

For example, a small cookie business entering the consumer market might discover, through segmentation, that there’s a group of customers (a segment) who is looking for great-tasting, lactose-free, gluten-free cookies and another segment that is looking for coffee-infused cookies. This is an opportunity to create tailored products that cater specifically to these segments and target them accordingly.

Targeting might entail both creating the specific product and crafting appealing packaging and messaging that speaks directly to each group’s unique needs, preferences and pain points. This includes adjusting language, tone and visuals to resonate with each audience, whether through digital ads, email campaigns or traditional media.

For instance, the market segment that requires lactose-free, gluten-free cookies would benefit from messaging and imagery that highlights the enjoyment of a cookie without worrying about triggering allergies. The segment that’s looking for coffee-infused cookies might respond well to a narrative about eating your morning coffee or enjoying a pick-me-up without having to head to the coffee shop.

Targeting to specific segments also entails selecting the most effective marketing communication channels based on where each segment devotes most of their attention. For example, younger audiences may respond best to social media and influencer marketing, while older demographics might prefer LinkedIn or email campaigns.

How to do B2C target marketing

The most common ways to segment business-to-consumer (B2C) target markets is via:

• Demographics: Age, gender, income level, education, occupation
• Geographics: Country, province, city, urban vs. rural, climate or weather conditions
• Psychographics: Lifestyle, interests, values, personality traits
• Behaviours: Purchasing habits, brand loyalty, product usage, seasonal shopping trends

When you have determined the characteristics of each segment, it’s possible to develop a unique marketing strategy for the specific segments you choose to target. Here are some examples:

Demographic-based campaigns

Example: Marketing fitness products to different age groups

• Young adults (18-30): Use social media ads on Instagram and TikTok, highlighting high-intensity workouts and trendy supplements.
• Seniors (60+): Advertise on Facebook and wellness magazines, focusing on low-impact fitness and longevity benefits.

Geographic-based campaigns

Example: Promoting winter clothing

• Cold climate regions of Canada: Focus on warmth, durability and layering. Use local influencers and weather-based ad triggers.
• More moderate climate regions of Canada: Adjust messaging for lower-temperature winter needs, offering lightweight jackets and rain gear.

Psychographic-based campaigns

Example: Selling eco-friendly products

• Eco-conscious consumers: Highlight sustainability, ethical sourcing and environmental impact through storytelling and certifications.
• Minimalists: Focus on durability, multi-functionality and space-saving designs in messaging.

Behavioural-based campaigns

Example: Targeting online shoppers

• Frequent shoppers: Use loyalty programs, exclusive discounts and early access to sales.
• First-time buyers: Offer welcome discounts and educational content to build trust.

Choose the right channels for each segment

Determine what information sources each segment likes and how much time they spend there. Based on those preferences, develop campaigns around them.

• Social media: Best for younger demographics and visually driven campaigns 
• Email marketing: Works well for personalized promotions and customer retention 
• Search and display ads: Effective for targeting based on location, interests and past behaviour 
• Traditional media: Ideal for older demographics and broad-reach campaigns

Test, measure and optimize

The process of target marketing is never over. It’s critical to continue to test, adjust and enhance the process based on your findings. Popular methods include:

• A/B testing: Experiment with different messages, offers and creatives
• Analytics tracking: Monitor engagement, conversion rates and ROI
• Customer feedback: Adjust strategies based on responses and behaviour

How to do B2B target marketing

B2B (business-to-business) target marketing requires a strategic approach that considers company size, industry, decision-makers and purchasing behaviours. Unlike B2C target marketing, B2B focuses on building relationships, demonstrating ROI and addressing specific business needs.

B2B segmentation often includes:

• Firmographics: Industry, company size, revenue location
• Geographics: Regional market needs, local regulations
• Behavioural factors: Purchase frequency, brand loyalty, preferred communication channels
• Decision-making unit (DMU): Identifying key decision-makers (CEOs, procurement teams, department heads)

Firmographic targeting

Example: Marketing cloud software to different business sizes

• Startups and small businesses: Focus on affordability, scalability and ease of use. Use LinkedIn ads, webinars and free trials.
• Large enterprises: Highlight security, compliance and integration with existing systems. Target procurement teams through email marketing and industry conferences.

Geographic targeting

Example: Selling manufacturing equipment

• North America: Emphasize innovation and automation for efficiency. Use trade shows and targeted digital ads.
• Asia-Pacific: Focus on cost-effectiveness and scalability. Partner with local distributors and leverage case studies.

Psychographic targeting

Example: Offering financial consulting services

• Risk-averse CFOs: Provide whitepapers, case studies and compliance-focused content.
• Growth-oriented CEOs: Emphasize long-term ROI, market expansion strategies and success stories.

Behavioural targeting

Example: Targeting businesses based on purchase history

• Repeat buyers: Offer loyalty programs, contract renewals and exclusive upgrades.
• New prospects: Use lead nurturing with educational content, free consultations and product demos.

Choose the right B2B marketing channels

Consider where the ideal customer may choose to receive information and advertising and adapt campaigns for that platform. Examples include:

• LinkedIn: Best for professional engagement and thought leadership
• Email marketing and newsletters: Ideal for nurturing leads and staying top-of-mind
• SEO and content marketing: Whitepapers, case studies and industry blogs drive organic traffic
• Industry events and webinars: Build trust and showcase expertise
• Account-based marketing (ABM): Personalized outreach for high-value accounts

Measuring and optimizing campaigns

A business can learn a lot about how target markets respond to campaigns. It’s important to keep track of results and adjust while they’re in progress, including:

• Lead quality: Track conversion rates from leads to customers
• Sales cycle length: Monitor how long prospects take to convert
• Customer lifetime value (CLV): Assess long-term revenue potential from each segment
• Engagement metrics: Open rates, webinar attendance, content downloads

Develop buyer personas

After segmenting the market and identifying target customers, many companies find it helpful to create a prototypical persona representing their ideal customer.

“A hypothetical profile of a customer is an imaginative exercise, almost like a story. It gives an image in mind of the person you’re serving and can be inspiration for developing products and marketing campaigns,” said Fischer.

For the cookie company, the profile of their gluten-free and lactose-free product buyer might look like this:

Vicky Vancouver

Gender: Female

Age: 38

Occupation: Financial analyst

Income: $100,000

Behaviours: Shops at health food stores and organic markets; frequently purchases products labeled “gluten-free” and “lactose-free”; willing to pay a premium for high-quality, allergen-free foods

Psychographic characteristics: Prioritizes clean eating and mindful consumption, reads labels carefully, supports brands that align with ethical sourcing and sustainability

Three key advantages of target marketing

Taking the time to segment and target a product or service has three significant benefits:

• Stronger offerings: A strategic approach to product development and marketing leads to solutions that are more aligned with the needs of the target market.
• Higher customer satisfaction: Businesses that understand their audience deeply can create more personalized experiences, which in turn foster brand loyalty.
• Increased profitability: Focusing on specific, often underserved, market segments allows businesses to optimize resources and maximize results.

Next step

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