Benefit Segmentation

Benefit Segmentation (or benefit-based segmentation) is a powerful market analysis strategy that consists of grouping consumers into distinct segments, not based on who they are (demographics) or what they do (behaviour), but based on the specific benefits they seek in using a product or service.

The central idea is that different people want to obtain different advantages from the same type of product.

What is it used for / Why is it important

This technique is fundamental because it shifts the focus from the product's features to the customer's needs. It is important because it allows companies to:

• Understand the real motivations: It reveals why people choose one brand over another.

• Improve Targeting: Instead of launching a generic message to "all women between 20 and 40", you can create a specific message for the segment of women seeking "practicality" and a different one for those seeking "luxury".

• Guide product development: Product variations (or new products) can be created specifically designed to satisfy the benefits sought by a specific segment.

• Effective Positioning: It helps define a clear brand positioning, focusing on the most relevant benefit for the chosen target.

When is it used / In what context is it useful

Benefit Segmentation is used during the strategic and analytical phase of marketing. It is crucial for:

• Market analysis: To map the competitive landscape and identify uncovered niches.

• Development of new campaigns: To define the main promise (the benefit) to be communicated.

• Product launches: To decide which variants to launch and to whom to address them.

• Mature markets: It is extremely useful in saturated markets (such as toothpaste, shampoo, cars) where differentiation is vital.

Practical example

The toothpaste market is the classic example:

1. "Health" Segment (Benefit: Prevention): Consumers worried about cavities and gum health. They choose products like "Cavity Protection" or "Sensitive Gums".

2. "Aesthetic" Segment (Benefit: Whitening): Consumers who want whiter teeth and a dazzling smile. They choose "Advanced Whitening".

3. "Social" Segment (Benefit: Fresh Breath): Consumers (often young people or smokers) whose priority is to have confident breath. They choose "Total Freshness".

4. "Price" Segment (Benefit: Saving): Consumers who perceive little difference and look for the cheapest product. They choose the distributor's own brand.

A brand like "AZ" (P&G) does not try to sell just one toothpaste to everyone, but creates different products and communications for each of these segments.