Multi-Segment Marketing Strategy 101

Brands today have access to a plethora of data about increasingly diverse audiences, along with a multitude of marketing channels through which to reach them. By leveraging market segmentation, a multi-segment marketing strategy enables organizations to expand their reach by targeting more than one audience cohort at a time. It also helps brands personalize their offerings and marketing efforts for each disparate group. And personalization is proven to increase performance: In one study, 80% of businesses reported that personalized experiences boosted customer spending by an average of 38%.  

At the same time, by diversifying their audiences with a multi-segment marketing strategy, organizations reduce their risk by spreading it across multiple cohorts. Should a product or a campaign fail to resonate with one audience subset, success among other segments can compensate.  

Let’s say a brand is promoting low prices to cost-conscious households with an annual income of less than $75,000. All’s well, until a competitor begins undercutting those prices and targeting the same audience. The brand could find itself losing sales, share and ROI. But if that same brand had been simultaneously promoting its higher-priced proprietary line to a more upscale audience and highlighting its reliability and value to its best longtime customers, the threat to the cost-conscious audience is no longer as significant. And in addition to diluting risk and allowing the brand to maintain and grow its presence among other audiences, this multi-segment approach buys the brand time to pivot its strategy with the cost-conscious audience. 

What Is a Multi-Segment Marketing Strategy?

To implement a multi-segment marketing strategy, a brand will organize its target audience of customers and/or prospects into groups that share certain meaningful characteristics. These cohorts could be differentiated by demographics (or its B2B counterpart, firmographics), behavior, psychographics or some combination thereof. The business will then determine which of these segments to market to and strategize the best messages, media and offers by which to do so. 

Because multiple diverse cohorts are targeted simultaneously but in differing ways, multi-segment marketing is more effective than mass marketing, which takes a one-size-fits-all approach, serving the same messages to an entire audience and hoping that they appeal to a significant portion. A multi-segment strategy also has a broader reach than a single-segment approach, which customizes the message and offer to only one cohort at a time.

Real-World Examples of Multi-Segment Marketing

Numerous organizations lean into multi-segment marketing by creating a portfolio of brands and products to appeal to different audiences. Marriott, for instance, has its Ritz-Carlton and Luxury Collections for upscale consumers who value exclusive experiences, its Fairfield chain for budget-conscious travelers and its Residence Inn extended-stay and Courtyard brands for business travelers.  

Nike is another organization that has thrived in part by taking a multi-segment marketing approach. Its iconic “Just Do It” campaigns target those whose identities are entwined with their athletic goals and performance. Its “Find Your Greatness” campaign, on the other hand, let consumers who would likely never reach the heights of the athletes featured in the “Just Do It” ads know that its products were for them as well. Nike also uses different channels and messaging when targeting sneaker collectors vs. parents buying for their children, women vs. men and runners vs. basketball players, among other segments. 

Beverage brand Liquid Death has an appreciably smaller product portfolio than Marriott and Nike, but it too benefited by implementing a multi-segment marketing strategy. Material worked with the company to break down the packaged-water market into five key segments, detailing the wants, needs, priorities and behaviors of each. After assessing which of those cohorts offered the greatest opportunities, Liquid Death successfully homed in on the three most promising groups to target. 

How Market Research Powers Multi-Segment Marketing

Before you can craft a multi-segment marketing strategy, you need to ascertain which audiences to target. And to do that, you need to conduct both qualitative and quantitative market research. 

Quantitative research examines the whats and hows of a market: What is the demographic makeup of buyers and prospects? How many current and potential customers are there for the product or brand? How do buyers engage with the brand? What is the competitive landscape? How does each competitor differentiate itself? Surveys, polls and questionnaires, composed to eliminate bias, are among the multi-segment marketing quantitative research tools. 

Statistics regarding the size and makeup of an audience and a market aren’t enough on their own to develop an effective multi-segment targeting strategy, however. Understanding the motivation and context of each audience’s behavior — their wants, needs and preferences — via qualitative research is equally important. While quantitative research might help a brand decide who to target, qualitative research gives insight into how best to engage with the audience. Focus groups, one-on-one interviews and shop-alongs are the most commonly used qualitative research methods. 

Once the data has been analyzed, an organization can gauge its current market position in relationship to competitors and consumers, as well as the most significant subsets within the overall audience. Then it can determine on which multi-segments to focus its efforts.

Factors to consider when narrowing down which segments to target include: 

• The affinity of each segment to the brand 

• How much competition there is for each cohort 

• Each segment’s growth potential  

• The cost-effectiveness and ROI of targeting each segment 

• The ultimate objectives of marketing to each 

After a brand has decided on the market segments to prioritize, it will use the insights regarding each cohort’s needs and wants to direct the messaging and offers for each. The brand will also assess behavioral data to determine which channels to optimize for each audience. The result: a multi-segment targeting strategy. 

How Material Can Help with Your Multi-Segment Marketing Strategy

A successful multi-segment marketing strategy requires several areas of expertise. First is research acumen, to obtain the insights necessary for determining which audience segments to target and how best to do so. Second is strategic prowess, to ensure that the optimal approach is effectively implemented for each segment. 

At Material, we have used advanced research methodologies to segment audiences for maximum effectiveness. We’ve also applied segmentation data across multiple market strategy solutions to enable our clients to grow their customer base, share of market, ROI and top and bottom lines.  

Contact us today to discover how we can help your business develop a multi-segment marketing strategy to drive sustained growth and reach its full potential.