Combine market segmentation with CMA to target key audiences, identify gaps, and refine strategies. Use Profitmind to stay ahead—schedule a demo today!
It should come as no surprise that market segmentation is essential for any enterprise business, or that competitive market analysis is a key part of developing your market segmentation strategy. Diving your consumer base into manageable and targetable subsets relies on your analysis of the competitive landscape where those consumers make buying decisions.
That said, we often find that enterprise businesses can do more to make CMA a tool in service of their market segmentation process. The problem is that many of them either don’t have the understanding or resources to make this happen. That’s why we’ve put together this look into exactly the role competitive market analysis can play in effective market segmentation — and what it means for your business.
Let’s start with the essentials. What exactly is market segmentation, and why does it matter?
Market segmentation is the process of dividing the market into several groups of consumers based on relevant features they share. These can include demographic features like age, gender, or income, as well as geographic features like location or climate. They even extend to psychographic features such as lifestyles and values or behavioral features like buying habits and brand loyalty.
Segmentation can also take into account other factors, including how often shoppers make a purchase, what channels they prefer to use for communication and what culture they identify as their own. This all allows for a more complex understanding of your audience.
Why is this so important? Because by identifying these segments, businesses can create specific marketing and targeting strategies that address particular customers’ wants and needs. It also enables you to target customized products and services that match the needs of each segment of the population.
Finally, effective segmentation helps you optimize your spend by targeting the most valuable segments of the market — not wasting time and energy on less responsive ones.
We’ve established just how essential segmentation can be. Now we’ll address where competitive market analysis (CMA) comes into the picture.
CMAs can identify the key audiences that your competitors aren’t currently targeting. If there’s a group that your competitors are overlooking in their marketing and product design efforts, that represents a powerful opportunity for you. Without competitive market analysis, an opportunity like this can be easily missed.
Identifying these key gaps also empowers your company to explore niche industries or respond to new trends that matter to key customers, like sustainability or the latest technology. For example, markets with higher spending power might value features over value, while other segments might prioritize the opp[osite.
With CMAs, your company is able to identify its distinct position in the market and expand from that point of strength and knowledge.
One often-undervalued aspect of market segmentation is that it helps you develop a strong vision for your brand. It enables businesses to create a niche and distinct positioning that isn’t just different, but actually speaks to underserved audiences.
For instance, in a market segment frustrated by particular customer service problems among competitors, positioning yourself as a customer-first business can be a huge strategic victory. Without effective CMA work, that insight wouldn’t be possible.
If you want to understand how to start applying competitive marketing analysis for market segmentation, there are some key steps along the way that will help guide your journey.
A segmentation strategy needs to be just that — a strategy. Before you make any moves, start by determining what your specific goals are for the process. For some businesses, it will be expansion into new markets or solidifying existing customer bases. For others, it will be about improving product offerings or marketing more effectively to an often-missed subset of your audience.
When you set your goals clearly at the outset, you can ensure that your segmentation efforts are aligned with the overall goals of your business. Different goals require different segmentation strategies, so knowing what those goals are is an essential place to start.
Your next step is likely going to be to conduct a CMA. In combination with your clearly defined goals from step one, this will help you identify missed demographics, highlight where your business is missing key opportunities, and identify gaps that fit your company’s vision.
Fortunately, Profitmind makes competitive market analysis simple and effective. Our platform empowers you to gather and analyze data on competitors, pricing fluctuations, and customer behavior in one unified dashboard.
Now that you’ve conducted your CMA, it’s time to get out the proverbial scissors. The key word when determining your relevant segments is actionable — simply dividing up audiences into identifiable chunks doesn’t mean much unless you’re able to do something about it.
Look at the full range of traits, from the psychographic and behavioral traits we mentioned above to the shopping habits and brand affiliations that will help you get more granular about your segmentation. The deeper you go, the more personalized your strategies can become.
Speaking of personalized strategies, now’s the time to start targeting your newly minted segments. Develop marketing, pricing, and product strategies that are tailored to the segmented audiences you’ve created. Everything you do in communicating to those segments should be focused on the things that matter most to them — not only is this the most effective approach, but it’s also the least wasteful of your budgets.
You’re not done yet. Actually, you’re not done ever. Effective market segmentation means constantly monitoring and adjusting your strategy based on the behaviors of your competitors, customers, and the market as a whole.
This is where CMA tools continue to be essential. They let you continuously evaluate your segments and overall strategy, helping you identify shifts and work proactively to stay one step ahead of the competition.
Market segmentation without effective competitive market analysis is always going to be a half-measure. Considering that the competitive landscape worldwide is in its most complex state in history — until tomorrow, when it transforms yet again — companies can’t afford to be left behind. AI-driven price tracking solutions like we offer at Profitmind can help you leverage the most powerful new tech with a single goal in mind: to help you master the market with less waste and frustration.
Want to find out more? Contact us today to schedule a demo.
“We are in a very different era in respect to the speed in which retail moves, and we must have the ability to have the data and intelligence to make quicker decisions for the merchandising team. We partnered to bring in their expertise, and because they move at the speed our business needs.”
Profitmind is a
company
Your retail analytics assistant