Market Segmentation In the Context of Social Media: The Self-Segmenting Groups of Users

Market segmentation is probably one of the more common concepts marketers deal with in their profession. Market segmentation is essentially a process of subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. The outcome of this initiative is to tailor a marketing mix that precisely matches the expectations of customers in the targeted segment identified as a result of the market segmentation process.

Markets are segmented because few companies have the required resources to supply the needs of the total market. Unless the total market is small in size and highly concentrated geographically, serving the entire market may prove a daunting task. Most markets find it more manageable if the total demand for the market is broken down into segments and organisations choose those market segments, which it is best resourced to handle. The four bases upon which a typical consumer market is segmented includes behavioural, demographic, psychographic and geographical variables.

However, has social media platforms and their ability to engage with individuals interactively and in real-time made the practice of market segmentation redundant? The answer is certainly, no! The bases of segmenting a market fundamentally remains the same. However, social media has certainly brought a new dimension for marketers to seriously consider when developing market segmentation profiles on their customers.

Market Segmentation in the Age of Social Media

Market segmentation in the social media space is essentially about the social media platforms your customers use. The days where the markets were predominantly segmented based on demographic and geographic variables is fast approaching an end in the social media world. That is not to say that marketers will not be using demographic and geographic variables when segmenting markets in social media platforms. Demographic and geographic variables will still stay relevant to marketers in the social media age. However, the importance given to these two bases will start to erode with time.

Social media platforms are essentially made up of groups of users brought together through common interests such as sports, travel, hobbies, health, career, etc. In other words, social media platforms effectively consist of self-segmenting groups of users defined by segmentation bases such as psychographics. In brief, psychographics is about classifying people by their personality, values, attitudes, interests, and lifestyles.

A closer look at the major social media platforms such as Facebook, Twitter, LinkedIn, Pinterest, Myspace and others will reveal that the users of these platforms are essentially attracted to these platforms on the basis of the psychographic offerings associated with these platforms (Evan, et.al. 2012). For example, users join interest groups based on politics, art, food, travel, culture and music, and they often link their Facebook account to other websites. These same variables can easily be mapped to other platforms such as YouTube and LinkedIn. Amazon.com has long been at the forefront in understanding the best way to segment the online consumer. They have introduced innovations like “recommended products” and “users like me also bought” as a way of applying psychographics and behavioral bases for segmenting the market when designing offers for their customers.  It’s algorithms have learned to understand its users, and identify the products that interest them. And now, there are a number of tools in social media platforms that any business can use to leverage psychographics.

Hence, segmenting the market by demographics and geographic variables such as age, gender, profession and income and assuming that this would translate into success is not a great way to relate to your social media audiences.

Some industry practitioners have said that one should execute a marketing campaign on all social media platforms. But the truth is that not all of your customers will be on the same platform. Neither will they necessarily be on every platform. So marketers could spend an extraordinary amount of time  and resource building a Youtube campaign that delivers absolutely nothing because your customers are not found on Youtube.

Testing the various social media platforms is a good way to determine where exactly your prospects are located. However, until marketers have a thorough understanding of the user psychographics profile of the various social media platforms, they’ll never really know the best mix of social media platforms to run a campaign that delivers the intended marketing results. So do not hesitate to spend some time to more precisely segment the market for the products and services you’ll like to offer in the social media space. The time you’ve spent doing this will certainly not be in vain. On the contrary, it will likely provide you with a higher chance of executing a campaign on relevant platforms that will more likely produce the intended marketing results.

Welcome to the age of segmentation the social media way. Modern segmentation is heavily steeped in the ever-changing world of social media. Today’s customers are social-media savvy. The increasing importance of social media will compel marketers to rethink their reliance on demographic and geographic market segmentation approaches, dig deeper and consider myriad other factors including psychographics variables. The old way of segmenting markets simply won’t cut it. For companies who want to catch the global social media wave, getting a clear and highly detailed picture of their markets and more realistically segmenting them will be an on-going challenge. The trick is to  comprehensively understand the self-segmenting groups of users defined by their psychographic identity on the various social media platforms they participate.

References

Evans, D.C., Robertson, N., Lively, T., & Jacobson, L., Llamas-Cendon, M., Isaza, H., Rosenbalm, S., & Voigt, J. (2012). Facebook’s 8 fundamental hooks and 6 basic user types: A psychographic segmentation. The Four Peaks Review, 2, 36-54.

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About Stephen Singaraju (Ph.D)

Dr. Stephen Singaraju was conferred the degree of Doctor of Philosophy (Ph.D) from Monash University. Stephen had accumulated a total of 15 years of industry experience. His industry experience began with Mitsubishi Material Corporation in industrial sales and marketing responsible for both domestic and international markets. Subsequent to attaining his MBA qualification in the UK, Stephen pursued a career in corporate planning in the oil and gas industry and later an advertising career in an international Japanese media and advertising agency headquartered in Tokyo, Japan. During his career in advertising, Stephen had the opportunity to embark on a wider brand building career in industries ranging from Fast Moving Consumer Goods (FMCGs) to Automobile and Consumer Electronics. Stephen is a social media marketing expert. He currently lectures in Social Media Marketing and Customer Relationship Management at La Trobe University. He lectures in undergraduate and postgraduate courses including the Master of International Business (MIB), Master of Marketing Management (MMM) the Master of Business Administration (MBA) courses. He has an excellent understanding of new media, marketing and advertising in the social media space. He is competent in analysis, strategy and planning; content creation and curation; usability, taxonomy; search engine optimization (SEO) and social media optimisation (SMO); social media strategy and implementation; conversion optimisation and analytics. In recognising the radical alteration of how we consume media, it has become clear that new media requires new methods of understanding. This means knowing the basic elements of how to tell a coherent brand story as well as understanding the technical issues defining the social media ecosystem in which a brand’s story is conveyed. His approach is to understand where technology and narrative meet to ensure the best way to apply that knowledge to enhance a brand.
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