What Is Benefit Segmentation?

Benefit segmentation is type of marketing strategy that focuses on the specific benefits consumers receive as the result of purchasing the goods and services offered by a given company. The idea behind this particular strategy is to allow the company to identify niche markets of consumers who are most likely to respond affirmatively to those product lines and focus marketing efforts on reaching those groups of consumers. Considered a viable approach to the wider task of market segmentation, benefit segmentation can often allow companies to identify markets that would otherwise have been overlooked.

There are a number of different methods for using benefit segmentation to identify different markets or groups of consumers who may be attracted by specific benefits offered by a product. The range of appeal associated with the product may cross over a wide range of consumers, with some attributes of the product appealing mainly to one niche group of consumers while a different benefit captures the attention of a different set of consumers. By identifying what it is about the product that appeals to different consumer groupings, the company can structure the marketing campaign to reach each of those niche markets and ultimately generate additional sales as a result.

One way to understand how benefit segmentation works is to consider a product that seems to have a broad appeal across lines of gender, age, and economic status. By looking more closely at each of these consumer markets, it is possible for the producers to ascertain what it is about the product that appeals to people in certain age or income brackets. For some consumers, price may be the main motivation while others may relate to the brand name based on long-time use and consumer confidence. Knowing why each sector or group of consumers chooses to buy the product makes it possible to identify not only which attributes to play up in advertising, but even which advertising vehicles are most likely to reach specific customer groups. This means that if consumers of a certain age tend to be price-conscious and also rely on television and radio more for entertainment, the company can tailor an ad campaign using those media options and highlight the easy availability and the affordable price.

As with all marketing efforts, benefit segmentation has the goal of reaching and retaining customers by appealing to their needs and wants. When utilized responsibly, this approach has the potential to allow a product to saturate all possible markets and generate excellent returns. One of the key benefits of benefit segmentation is that the information gathered makes it easier to break into markets that currently represent only a small amount of total sales, but have the potential to increase market share significantly. With a more varied client base, the company is much more likely to ride out downturns in the economy and remain profitable over the long-term.