Home Innovation Insights

Stand out from competitors. Know more about your customers’ attitudes toward product purchases.

Ed Hudson, MBA
February 28, 2018

Market Segmentation: Precision Helps You Communicate More Effectively

One market, one message, one ad strategy, one set of product options — sounds simple and efficient, doesn’t it? But we all know that’s not how modern marketing works. As marketers get more savvy, and buyers more discerning, lumping everyone into a single bucket is only a simple and efficient way to continue losing ground against competitors. Even “segmenting” your market by Builder, Retailer, or Contractor channels falls short of a strategy that will propel you ahead of competitors and help you make the most of your advertising, marketing, and communications budgets.
The chart below, based on a survey Home Innovation completed recently, illustrates that within the group of companies identified as “Home Builders,” there is a vast range of purchasing motivation among builders by region, size, type of builder, and type of home offered. Builders in the West, for example, are twice as likely than builders in the South to consider Green Certification of building products as important in their purchase decisions; and Large builders are more than a third more likely than Small builders.

Is Green Certification Important in Your Building Materials Selection?

Source: February 2018 Omnibus Survey of Home Builders, Home Innovation Research Labs

As building product manufacturers continue to improve their understanding of potential buyers, there is a growing interest in segmenting markets by attitudes and values of purchasers and company cultures. Knowing the attitudes and values of your prospective customers, particularly how they relate to the purchase of your products, allows you to stand out from your competitors by crafting messages, pricing strategies, and product features specific to each group.

Any well-intended, even popular message can be a disaster with people of differing values. I’ve seen a seemingly innocuous marketing message, like “Green homes will save you money,” evoke negative reactions among those with a “True Green” perspective; those who build green homes simply because they believe it’s the right thing to do. These folks may take offense to the notion that someone would need an economic incentive to do what’s right.

Likewise, builders have diverging beliefs across the spectrum about what makes a great home, or even a great home builder. A clever message that that moves one builder can repel another, even if they build similar homes in the same local market. A “get the most for the money” message, for example, would repel a home builder (or buyer) seeking to convey exclusivity in selling their homes.

While the chart above consists of traditional demographics-based segmentation criteria, attitudinal criteria may address company views towards innovation, quality, social responsibility, customer experience, responsibility to owners, relationships to the community, and others. Other bases for segmenting the market can include behavioral (such as what they buy or build) and psychographic profiles of purchasers. Effective segmentation may contain elements of attitude, behaviors, and demographic profiles. The most effective segmentation strategy for one product or service category may differ from others — such as architectural products and structural products. While most companies rely on their own experience in determining how to talk to their markets, working with an experienced marketing researcher is a more certain way to do it effectively.
Contact us to discuss how we can structure a study to help you determine how to best view and segment your markets.

Back to Top

Filed Under:

Add your Comment

All fields marked with * are required