Audience Segmentation and Sizing

There is a market and a target market for practically everything. Very few companies are big enough to supply the needs of an entire market, but most of them appreciate the need to find out who will buy their products.

Not knowing who will buy a product or assuming that everybody will do, can lead to wrong decisions, wrong pricing, wrong messages, and subsequently the downfall of the business is likely.

As marketers, we aim to remove the diversity that defines consumers as individuals to assign them into groups or segments. This is what we call “Audience Segmentation”.

It is the process that organizations apply to reduce or eliminate the uncertainty that is assigned to who, where and when will buy their produce.

Though the factors for segmentation depend from marketer to marketer, more often than not the audience can be divided using the following factors:

1. The Demographic Way:

THE most common and important form of segmentation. It takes into account the below sub-factors:

    i. Age & Life Cycle Segmentation
    ii. Gender Segmentation
    iii. Income Segmentation
    iv. SEC Segmentation

The reason for this particular form’s popularity is that the variables are easy to quantify and every piece of data can be backed up with strong numbers.

2. Where does Your Target Stay:

Where a person lives, determines some key aspects of consumption behavior. For example, climates decide what clothes people own, city distances decide what car they drive and food culture decides what cuisine a restaurant must provide. In India especially, Rural and Urban areas behave drastically different from one another and rural accounts for more than half the country’s population. So, where does your target lie?

3. Have you Looked Inside the Consumer’s Mind:

While demographics show your customers’ hard data (age, location, marital status, ethnicity, etc), psychographics slice across your list from a different angle, looking at lifestyles, behaviors and attitudes. In other words, Demographics explain who, but Psychographics explain why. It gives you a much deeper look into the market you’re dealing with. If you know what will grab their attention and what will turn them off, you’ll be way ahead of the competition. There are 8 basis segments according to the VALS (Values and Lifestyle) framework in which consumer can be divided:

a. Innovators: They are successful, sophisticated and “go getters” with high self – esteem.

b. Thinkers: They are mature, satisfied, comfortable and reflective. They are well educated seek information before decision-making.

c. Believers: They are conservative and slow to change.

d. Achievers: They have goal-oriented lifestyles that are centered on their lifestyles and careers.

e. Strivers: They are trendy, fun loving but have low disposable income. They tend to have narrow interests.

f. Experiencers: They appreciate the unconventional. They are not afraid of trying out something new.

g. Movers: They value practicality and self-sufficiency.

h. Survivors: They have the fewest resources of the lot and often feel powerless.

Today, consumers are more fragmented than ever before, so understanding and marketing based on psychographic qualities couldn’t be more important.

4. Do you Know Why People Buy Your Product:

A more focused form of market segmentation that groups consumers based on specific behavioral patterns they display when making purchasing decisions. This enables you to adapt your marketing approach to specific groups basis:

a. Consumption Occasions (Time of Day, Week, Month, Year)
b. Benefits Sought
c. User Status (First Timers, Ex-Users, Potential Users etc.)
d. Usage Rate (Non Users, Light Users, Heavy Users etc.)
e. Loyalty Towards Product (Loyal, Wandering, Need Based etc.)


This is when all the data gathered from the first part of this exercise is converted to usable numbers. By now you know who your consumers are, where they’re from, how old they are, what do they like, what do they dislike, but how many people exactly? Enough to justify your marketing budget?

    1. Using market intelligence, we first find out the purchase patterns of our product. This helps us narrow down the entire population in terms of sex, age and socio economic class. Another important tool that we use to narrow down the audience is Affinity, which helps in uncovering co-relations between the audience segments and a product or service.
    2. Using the data gathered from this exercise we then proceed to put numbers to all the percentages gathered above. With the entire population as a base, we start ruling out audiences that we will not target.

Market segmentation is a mandate for any business looking to expand. The foremost benefit of market segmentation is targeted marketing and a standard or generic marketing approach doesn’t appeal to all prospective customers.

Each consumer segment behaves differently from the last. For your communication to be effective, you must first understand and appreciate the diversity in your customer base. A few tweaks here and a change of strategy there, and watch the ROI come flowing in.