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What is Segmentation Analysis?
Segmentation analysis is widely used by consumer insights professionals with the primary goal of taking consumers and dividing them into smaller groups (aka segments), to reveal unique insights about each.
Segmentation techniques can include:
Demographic Segmentation: based on variables like age, gender, income, sexual orientation, religion, or professional role.
Geographic Segmentation: based on physical locations like country, city, neighborhood, or zip code.
Behavioral Segmentation: based on variables that can include buying habits, brand interactions, or web browsing patterns.
Psychographic Segmentation: based on sentiments, values, personality traits, lifestyle, or personal beliefs.
When to use Segmentation Analysis?
Segmentation analysis has tremendous value for companies who want to hone in on the unique needs of the various customer groups they serve.
It is often the case that your core product, whether it be digital media or a packaged snack, is used by various customer segments. Each of these groups has its own distinct needs and expectations, making segmentation analysis crucial to understanding who these customers are and why they use your product.