Everything you Need to Know Before Developing a Product Segmentation Strategy

November 26, 2018

 What is product segmentation?

A product segmentation strategy helps businesses identify ways to sell variations of their products in such a manner that it appeals to different markets. How is this different from marketing segmentation? Marketing segmentation involves identifying various target markets for creating different messages for selling the same product to each group. The primary aim of a product segmentation strategy becomes evident when you realize that by slightly changing your product, the potential to increase sales becomes higher.

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How to undertake a product segmentation strategy

Analyze the market

An ideal product marketing strategy must include methods to identify factors that make people want to purchase a particular product. For instance, brands can take the help of focus groups or surveys to find out what people like about their product and the scope of improvement that would make it much more desirable and eventually prompt them to purchase. The needs of each target group of customers might be different. It is essential for businesses to identify the ones which are viable and incorporate the same into their offerings.

Use marketing segments

Brands can use various types of product segmentation to appeal to customers, one of the best ways to do it is to focus on the already existing customer segments of the business. This also helps to identify market segments that aren’t buying from the business and formulate different product variations that could induce a purchase from them.  If the company sells products via the Internet, then it becomes much easier for them to offer customization options of products to the customers in order to meet the needs of different groups better.

Use distinctive marketing communication

Brands must ensure that they adjust their marketing messages accordingly to suit the product that they intend to promote. For instance, the marketing strategies used for selling a children’s snack should be different from the strategies used to promote snacks that are healthy and recommended for adults.             

Types of product segmentation strategy

product segmentation

Mass market strategy

This is one of the easiest types of product segmentation wherein a common offering is made throughout by the brand irrespective of their target customers or difference in geographic locations. One of the key advantages of this product segmentation strategy is that the company receives a great economy of scale advantages since its factories are manufacturing the same product with the same materials and no additional customizations are required.

Large segment

Large segment product segmentation strategies are more specific and require a significant investment to compete successfully in every available market at the same time. A company can specialize in making one type of product which allows them to eliminate an unprofitable segment or target the segment where it has the greatest advantage.


In this product segmentation strategy, a company targets more than one market segment. For instance, A chemical brand can make many brands of detergent just by changing the concentration of the chemicals used for each specific market. The company runs a separate advertising campaign for each product, and customers in a different region may not even know that these products are made by the company. This method is intentionally used by some companies to protect the reputation of their higher-end brands.

Niche strategy

Niche segmentation is one of the popular types of product segmentation wherein the company’s products are made to suit the needs of a specific and highly specialized target customer group. This is one of the most effective types of product segmentation that can be used by a smaller firm to compete with larger counterparts in the market. Though a niche forms only a small part of the market, higher-end products are sold to this segment which compensates for this factor.

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