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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? : Segmentation research helps you split the market up into groups of customers with similar needs. We share the key steps that make up the process. Learn how and where it fits into your marketing planning and why segments matter. Read this to learn how segmentation research helps you make decisions that’ll focus your marketing actions. 

One of our favourite bits of advice is “you can do anything you want, but you can’t do everything you want.” You have to make choices and decisions in life.

That’s especially true when it comes to your marketing strategy. At the start of the brand development process, your choices are wide open. But as you move through the process towards brand activation, you make decisions and narrow your choices. You prioritise and choose NOT to do some things. You can only do so much because you have a limited amount of resources – budget, time and people. 

In marketing, you can do anything, but you can’t do everything. You need to make decisions

Which customers to go after

One of the most important decisions is which customers to go after.

You can’t appeal to everyone. It’s just not possible. Different products appeal in different ways to different types of customers.

But you can appeal to groups of customers who’re similar to each other. Finding these segments is the first part of the segmentation, targeting and positioning process.

You start with segmentation research to find those segments and identify their similarities. 

3 steps of the process - Segmentation - divide the total marketing, targeting - pick the most attractive, positioning - build your brand

Segmentation research helps you break down the total market (sometimes called the customer universe) into smaller segments.

These segments share similarities in how they make buying decisions.

These similarities means you can define who is in and who isn’t in the segment. And that means you can build a specific marketing approach that’ll appeal to only the customers in that segment. 

These similarities are a combination of :-

  • who customers are
  • when and where they use products and services
  • psychological influences on their buying choices.

What makes a segment a segment?

For a segment to be worth looking at, the similarities shared by customers need to :-

(a) have an influence on the buying decision and, 

(b) be able to be used to identify and engage with those customers.

These criteria make your segments actionable.

They shape all the choices you make in your brand identity and your marketing plan

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

You use them to create the products that appeal to that segment at the right price, and in the right places. Segments help you create the advertising messages that drive purchase, though a  media plan that focuses on that segment. 

For example, some segments always go for the cheapest product. But others always buy the most expensive and highest quality. Some customers choose brands that are the safest, the most convenient, the most entertaining or offer the best customer service.

These would all be valid segments to go after. You’ve got clear factors that influence the buying decision – price, quality, features, benefits. And you can use these factors to help you decide which segments to go after and how to go after them.

That’s what happens next when you do :-

  • targeting – deciding which segment to go after based on its attractiveness
  • positioning –  deciding how you’ll go after that segment.

Segmentation research

To identify customer similarities that drive buying decisions, you’ll need to carry out market research on the total market. You can’t segment without understanding the market. 

Good market research that you can make confident marketing decisions on needs to follow a clear market research process. You should use a credible market research company. 

Let’s look at how segmentation research works with this process, starting with how you define 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 in usually how to prioritise. You need 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 your a strong competitive advantage.

Segmentation research helps you identify who these segments are, and what they need.

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

Without this research, you don’t know where to prioritise.

Your marketing plans and your brand activation needs to be for someone (or a group of similar someones), not for everyone. Segmentation research helps you find your best customers. It shows you how how to connect with them in a way that appeals to them. And that’s obviously a good thing for your brand. 

Segmentation research brief

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

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

You can read more about market research briefs in our market research process guide. 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 any relevant category 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 all sets the context for the research team. 

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, relatively 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 here because the rest of the brief will cover those.


In the objectives section, get more specific about what you need. Define specific objectives that sit below the broader purpose. These objectives should follow the SMART objective setting principles. They need to be Specific, Measurable, Achievable, Relevant and Time-bound. The objectives should all connect, and can be broken down into sub-objectives if it makes 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 helpful to define a specific business measure for the research.

For example, if this is an update to previous segmentation research, you could use the business results from that previous 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’ve 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 your segmentation 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 time-frame for measuring the results. Segmentation normally drives longer-term results, but this can vary from category to category.

In mature categories for example, segmentation research will usually stay valid for 3 to 5 years. These are categories where customer behaviour changes happen relatively slowly, like food, alcohol, or banking. Base your objective on the return on segmentation research costs on long-term sales impact.

However, in faster moving categories, segmentation research outcomes might have a shorter shelf life, say 12 months. In these categories, like fashion or entertainment, the segmentation research need to show a faster return on investment. 

Market research objectives

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

Segmentation research normally looks at a combination of demographic, occasion-based and psychographic traits that drive customer behaviour and define segments.

(See our segmentation, targeting and positioning guide for more on this).

The research also needs to quantify the size of each segment. To understand a segment’s potential you need to know how many people are in it, and how much they spend. (this data helps you work out relative market attractiveness when doing targeting work).

In this section, 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 needs 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 your audience.

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

For example, share any lessons from past research projects. Maybe a particular research reports works well (or doesn’t) in your category? Maybe there’s some obvious sources of bias to look out for?  This is the place to share those lessons.


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

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

So 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 either don’t want discussed. Flag these constraints to the research team here. 

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 and what activities they’ll 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. Confidence levels of 95% for the results are the most common level. But some companies will push for 99%.

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

Budget and timelines 

In this section, you share with the research team the project budget and timeline. 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 have to 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 worked on one project that 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 the time you get the results anyway. 

If your budget is low, you’ll need to 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 benefit 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 all the way through the project. Make it as clear and 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’s done, you shift responsibility to the market research company. They need to review the brief and respond with a research proposal and plan. 

We’ve a separate guide on how to work with market research companies. But for segmentation research, there’s three specific areas to look for in their proposal and plan.

They manage complexity well

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

There’s 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 will gather lots of data and insights, not all of which will be helpful or relevant. It’s easy to get distracted or 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 are what drives your growth.

It’s not enough to just define the segments. You need to 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, if your creative teams or media planning agency will use the research, invite them 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. But segmentation research will help 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’ll define the business problem you need the research to solve, and complete a segmentation 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 and good ones will work with you to make sure the results and clear and actionable. Use these results to shape your marketing plan and brand activation.

Check out our guide to segmentation, targeting and positioning for a fuller view of the overall process. Or contact us if there’s a specific area of segmentation research we can help you with.

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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