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Get the most out of segmentation research

An apple pie cut into six segments with one segment pulled out on a slice

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Why read this? : We go through the key steps in the segmentation research process. Learn how to use it to make your marketing plans sharper and more focused. Read this to learn how to make more customer-led decisions using segmentation research. 

A wise manager once told us, “You can do anything you want, but you can’t do everything you want.” In life, you have to make choices.

That’s especially true with your marketing strategy. You start the brand development process with many options. But as you move towards brand activation, you make decisions. You prioritise. That narrows your options as you choose NOT to do some things, due to limits of budget, time and people. A key decision is which customers to go (and not go) after. This is where segmentation research comes in. 

Which customers to go after

Segmentation research is part of the segmentation, targeting and positioning process.

It helps you break down the total market into smaller segments, who share similar attributes and needs, and who make buying decisions in similar ways.

You use these similarities to define who is and isn’t in a segment. You tailor your marketing approach to appeal to customers in that segment.

These similarities are a mix of :- 

3 steps of the process - Segmentation - divide the total marketing, targeting - pick the most attractive, positioning - build your brand
  • who customers are.
  • when and where they use products and services.
  • psychological influences on their buying choices.

What makes a segment a segment?

Customer similarities within a segment should :-

  •  influence the buying decision.
  •  be able to be used to identify and engage with those customers. 

You can use a segment meeting these criteria to drive key decisions in your brand identity and marketing plan.

It means you create more relevant products at the right price, sold in the right places and promoted via advertising and media in the right channels.

An apple pie cut into six segments with one segment pulled out on a slice

For example, some segments always choose the cheapest option. Others, the most expensive. Some segments go for the safest, the most convenient, the most entertaining or the best customer service.

These are all valid segments. There are clear factors which influence buying decisions. Price, quality, features, benefits and so on. You use this information to drive your choices when you do targeting and positioning.

Segmentation research

Segmentation research normally follows the market research process.

Your goal is to understand how the overall market of potential customers can be broken down into smaller actionable segments. 

That usually means hiring an expert market research company to help you answer your research questions and solve your business problem.

You start by defining the business problem you need the research to answer. 

Market research process - Flow diagram showing define the business problem - the research brief - the research plan - do the research - analysis an action plan

Define the business problem

The key business problem for segmentation research is usually how to prioritise customers. You have to prioritise because you have limited resources – budget, time and people.

You want to focus on the customers who’ll give you the best return on your investment. The most attractive segments where your brand can find a clear competitive advantage.

Segmentation research helps identify these segments and tells you what they need. It helps you find your best customers.

Person holding glasses in front of them against a blurry street background

Segmentation research brief

After the business problem, you next write a brief. This tells the market research company what you need them to do. 

This summary page outlines the context and what’s needed from the research. It tells everyone why you’re doing the research, what you’ll use it for, and what you expect them to deliver. 

Our market research process guide has more on research briefs. But segmentation research briefs have some specific areas you’ll need to include :-

Market research brief template

Background and Research Purpose

Use this section to explain why you need the segmentation research and what you’ll do with it.

In the background section, make it clear if this is a new segmentation or an update to an existing one. Share how you define your category. Include relevant facts such as competitors and market share, key sales channels and customer insights.

Tell the research company what’s behind the need for the segmentation research. e.g. competitor activities, changes in customer attitudes and behaviours, changes in the leadership or marketing team.

This gives the research team some context. 

The research purpose tells the research company what you’ll do with the outcomes. This helps them focus on the actions and results.  Make the purpose simple and high-level, but also meaningful. So, for example, your research purpose might look something like this :-

The research needs to segment the market for (category X), so we can identify and prioritise marketing activity against the most attractive customer opportunities in (the next year). 

You don’t need to go into huge detail. The rest of the brief can cover what else is needed.


In the objectives section, get more specific about what you need. Break down the objectives which sit below the purpose. These should all be SMART. Specific, Measurable, Achievable, Relevant and Time-bound. The objectives should connect and can be broken down into sub-objectives to make them clearer.

Set objectives at a :-

  • total business level – what the research needs to deliver to grow the business. 
  • market research level – what the research itself needs to deliver in terms of insights and recommendations. 

Business objectives for the segmentation

You should restate your overall business goal (e.g. hit x$ market share, grow sales by x%, enter new category of x). Make it clear how you expect the segmentation research to help you achieve that goal.

It’s also helpful to define a specific business measure for the research itself.

For example, if it’s an update on previous segmentation research, you could use the business results from that research as a benchmark. (e.g. same / better percentage sales uplift as the previous project). 

Or, if it’s new, but you’ve done segmentation research in other companies, you could use those results as your benchmark. 

No segmentation benchmarks? Make the research pay for itself

If you’ve no benchmarks, look at how much you’re going to spend on the segmentation research. Work out the minimum extra profit you need to pay for it.

Your research should pay for itself in increased sales and profits.

For example, let’s say your business generates 10% profit on every sale. You have a budget of $50k for the segmentation research. So, you need an extra $500k in sales to make the $50k (at 10% profit) to pay for the research. 

Five piles of different types of coins - appears to be 1,2,5,10 and 20 cent euros

The objectives also need to specify the timeframe for measuring the results. Segmentation normally drives longer-term results. But this varies by category.

For example, in mature categories, segmentation research usually stays valid for 3-5 years. These are categories where customer behaviour changes happen relatively slowly. Food, alcohol, or banking, for example. Base your objective on the return on segmentation research costs on long-term sales impact.

However, in faster-moving categories, segmentation research might only have a 12-month shelf life. In categories, like fashion or entertainment, the research needs to show a faster return on investment. 

Market research objectives

The brief also includes objectives for the research project itself. For example, you can outline the research aims, information needs and key questions. You get more specific. Outline the types of customer behaviours you want the research to cover, for example.

Segmentation research normally looks at a mix of demographic, occasion-based and psychographic traits which drive customer attitudes and behaviours. (See our segmentation, targeting and positioning guide for more on this).

The research should also quantify each segment’s size. To understand a segment’s potential you need to know how many people are in it, and how much they spend. (This helps you work out each segment’s relative attractiveness).

In this section, you share existing ideas about segments you want the research to validate. 

We want to research whether men/women, young people/old people, people in the North / South etc have different buying behaviours, for example.  

You should also state when and how you need the research results to be delivered. Research results need to fit in with other parts of your marketing calendar like your marketing plan and brand activation.

Research methods

Most segmentation projects include both qualitative and quantitative research. Qualitative helps you find out what drives buying decisions. Quantitative tells you how important each driver is. Together, you get the best overall picture of your audience.

Your market research company should help you choose the best research methods. But in the brief, you can share your thoughts on the best approach.

For example, share lessons from past research projects. Maybe a particular research approach works well in your category. Or there are obvious sources of bias to look out for. This is where you share that knowledge.


Your brand or category may have constraints on how the market research company can carry out the research. Detail those here. 

In some categories, industry codes of practice stop you from talking to certain groups of customers or carrying out specific types of research. 

For example, there are regulations on researching with children. There are regulations on research in sensitive categories like health or alcohol. There may be some topics you don’t want discussed. Flag all these to the research team here. 

Man on apartment balcony holding hand in front of face to say stop

Deliverables and action standards

In deliverables and action standards, you get down to the nitty-gritty of what you’re trying to do. Clearly define the specifics of what you want the research project to deliver. Outline how you’ll use the information to make marketing decisions

For segmentation research, the minimum deliverable is usually a list of what most influences the buying decision and definitions of the key segments. 

Make sure you share what actions you’ll take as a result of the research. Show how the results will plug into your marketing plan. Which activities they will drive.

For example, if the research is to find marketing innovation opportunities with a different segment, a deliverable should be a recommendation on which segment. Same thing if it’s changing your pricing and price discount approach for a new segment. You need a recommendation as a project deliverable.

The research should also quantify each segment. You need the segment size to do your market attractiveness calculations. 

For action standards, define the level of statistical confidence you need in the results. 95% confidence levels are standard. But some companies push for 99%.

The research company proposal and plan should include recommendations on sample size which meet your action standards.

Budget and timelines 

In this section, you share how much you’ll spend and how long you expect it to take. Budget and timelines shape the scope and scale of the research. They directly influence the quality of the research results. 

Like any other project, you make trade-offs between the scope, the cost and the time. The bigger the scope of the segmentation research, the longer it takes and the more it costs. 

We once worked on a large-scope project which covered 10 countries and took 18 months, for example. The results were used to shape marketing in those markets for the next 5 years.  

The project triangle showing quality in the centre and scope, cost and time at the three points of the triangle

If your category moves faster than that, you may need to trade off quality for speed. Decide how much accuracy you’re willing to give up to get quicker results. If your research takes too long, the market may have already changed by when you get the results anyway. 

With small budgets, you should discuss what’s achievable for that amount of spend. Smaller budgets means smaller scope. 

Because you need both qualitative and quantitative research to do a full segmentation, segmentation research project costs can soon add up. 

You need to weigh up your sample size, how many questions you’ll ask, and where, when and how you’ll carry out the research, for example. All these affect the research costs. 

Glass jar knocked over on floor with coins spilled out onto the floor

Be clear how long you expect to use the segmentation on your business. Define when you’ll next review or refresh the data.

The timeline should also include timings on post-project reviews. This is when you’ll measure the results from the research against the business and market research objectives.


Lastly, the brief needs to outline key people involved in the segmentation research. Who in your business needs to be involved in the research itself (attending focus groups, for example)? Who needs to see the results? And who makes the decisions based on the results? 

This might be a specific person (e.g. the marketing director), a specific team (e,g. the brand team) or a wider set of stakeholders. For example, you may need to involve your legal and regulatory team, your sales team and / or anyone else who interacts with customers. (e.g. customer service teams).

(this is often similar to the team who get involved in creative approvals). 

The brief is the first step to successful segmentation research

A clear well-written research brief is the key to successful segmentation research. Spend time crafting it and you’ll see the benefits in the long run. 

Get feedback from other people in the business. Work with your market research company to refine it until it’s 100% clear and agreed on. 

It’ll keep you on track through the project. Make it as unambiguous as you can, and refer back to it regularly. If there are issues, use the brief to help resolve them. 

Working with research companies

Once the brief is done, you shift responsibility to the market research company. They should review the brief and respond with a research proposal and plan. 

We have a separate guide on how to work with market research companies. But for segmentation research, there are 3 specific areas to prioritise.

They manage complexity well

Segmentation research can quickly become complex. You need a market research company that can manage this complexity for you.  

There are many unknowns. You may start with ideas about the total market drivers and the likely segments. But you don’t know for sure until you’ve done the research. 

Segmentation research gathers lots of data and insights, not all of which will be helpful or relevant. It’s easy to get lost in the detail. Recommendations need to be clear and actionable. They influence key decisions in your marketing plan. You want to be confident in the results. 

It often helps if the research company appoint a dedicated project manager. This person manages the project complexity (so you don’t have to). They organise all the research tasks. The project manager keeps everyone up to date on progress and checks key tasks are done at the right time and in the right way. 

They recommend actions

The research results need to be actionable. You need to be able to do something with them. To make decisions that lead to actions. Actions drive your growth.

It’s not enough to just define the segments. You must understand how to engage with them. And then you need to go act on that knowledge.

The research results should weave together the data and insights to make it clear what you need to do to appeal to those segments. The people who need to do something with the results need to be involved in the process. For example, invite your creative teams and media agency to watch interviews, or at least attend the results presentation.

They work with you to turn the results into action

Once the segmentation research is done, think about what else you’ll need from the research company in the future. 

You’ll need performance tracking to evaluate whether you meet your business and research goals, for example. They should set this up for you. 

You’ll also need a communication and engagement plan for the segmentation results. How will you make sure they go into your marketing plan and brand activation, for example?

Close up of two hands in a handshake

Think about how you’ll communicate it to employees, leadership teams, agencies, retail customers and other business partners. The more you use the research, the bigger and better the impact it’ll have. 

Remember, you can’t do everything. However, segmentation research helps you make smarter decisions about where and how to best use your limited marketing resources.

Conclusion - segmentation research

Segmentation makes your marketing more effective and efficient. Rather than going after the whole market, you identify specific opportunities among customers who share similar buying drivers. 

Segmentation research helps you identify these drivers and find the most attractive segments. It helps you decide where to focus your marketing efforts and time. 

To start, you define the business problem you need the research to solve. You then write a research brief. 

This brief outlines key steps like the background and research purpose, the objectives and the deliverables.

Your market research company then runs the research. Good ones make sure the results and clear and actionable. You see these results to focus your marketing plan and brand activation.

Check out our segmentation, targeting and positioning guide for more on the overall process. Or get in touch if you need advice on using segmentation research.

Photo credits

Pie segmentation : Photo by Dilyara Garifullina on Unsplash

Glasses : Photo by Josh Calabrese on Unsplash

Coins in small piles : Photo by Ibrahim Rifath on Unsplash

Hand / Stop : Photo by Nadine Shaabana on Unsplash

Coins spilled from jar : Photo by Josh Appel on Unsplash

Handshake : Photo by Cytonn Photography on Pexels

Coffee cups : Photo by Nathan Dumlao on Unsplash

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