A consumer segmentation identifies existing consumer segments within the market, their characteristics, and how they differentiate in their purchase behavior, product usage, and brand perceptions.
They contribute to establish a clear definition of key segments in the market for your brand, product or service through the identification of, for example, common socio-demographic characteristics, perceptions of the existing market, and product usage and patterns.
Most commonly, the consumer segmentation is one of the first studies to be carried out in a product innovation process but the also serve as a valuable tool if you are experiencing shifts in the market dynamics, which require a re-identification of key segments.
Using market research to determine, test or adjust your consumer segment definitions give you insights to:
The insights gathered from the consumer segmentation assist in optimizing your marketing ROI and identify which customers are the most important for your business.
We perform consumer segmentation using a range of different methods such as Latent Class Analysis, K-means clustering and hierarchical clustering:
Cluster analysis (HC, K-means, K-means+)
LCA (Latent Class analysis)
If you are in doubt as to what type of analysis is most relevant to apply to answer your business questions, we offer advice all the way through your project from designing your research to custom reporting with business recommendations to maximize the insights you gain from the consumer segmentation.