With need-based segmentation, you divide the market up into smaller groups of people who have more or less the same needs. In the past it was assumed that consumer behaviour was determined by unchanging personality traits (such as social class, age and gender), but nowadays we know that it’s slightly more complex than that, with various needs playing a role and differing greatly depending on the subject matter.
By identifying your consumers’ needs, you can make sure you offer them exactly the right products in the right way. Need-based segmentation enables you to take a differentiated marketing approach to customer segments, leading to:
- A better, clearer understanding of the market and an awareness that customers have different requirements.
- Propositions developed specifically for individual segments, ensuring the products better meet consumers’ needs.
- Better tailored communication (message, tone of voice) and therefore more impact.
- Higher conversion rates by targeting specific segments.
Needs based on emotional advantages
Needs arise at different levels. We explain each level based on an example of a car brand. This gives you:
- Attributes, or concrete product characteristics (such as parking assist in cars)
- Functional benefits: what consequence does the attribute have? (Parking assist makes parking easier)
- Emotional benefits: how does it make the consumer feel? (It makes them feel better about parking)
- And lastly, the overarching values that people find important in life and to which the product ultimately contributes, such as freedom (or, in this case, control).
How does need-based segmentation work?
Need-based segmentation starts with qualitative research. All potential needs and their interrelationships are identified in group discussions. We ask people about their wants, needs and motivations in respect of a particular product. We use emotional benefits as a starting point for need-based segmentation. Emotional benefits are domain-specific and are therefore all about your market.
The next step is to quantify the market using a questionnaire relating to these needs. Consumers state which benefits are important to them when choosing and remaining loyal to a company in your sector. The segments are primarily created around these benefits and we group them into clusters.
After that is done, you receive a concrete description of your target audience complete with personas that provide a description of the segments, the needs they have, the products they use and the best way to approach them.
Based on the results, we give you recommendations on how to optimise your communication and product development activities to meet your market’s needs.