By: Jenny Dunn
July 16, 2025
In today’s saturated and fast-changing marketplace, the most successful brands don’t try to reach everyone—they focus on the right audience with the right message. That’s where target market identification becomes critical. Whether you’re launching a new product or refining an existing offer, understanding who your customers are and how they behave is the foundation of a smart marketing strategy. Two essential tools can help you achieve this: market segmentation analysis and customer data analytics.
These tools work hand-in-hand to provide both a psychological and behavioral profile of your audience. One tells you who your customers are and what motivates them; the other shows you what they do and how they engage with your brand. Together, they offer a comprehensive and time-tested approach to defining your target market.
1. Market Segmentation Analysis: Who Your Customers Are and Why It Matters
Market segmentation is the process of dividing a large audience into smaller, more manageable groups based on shared traits. These groups are typically defined by demographics—such as age, gender, or income—and psychographics, including lifestyle, interests, and values.
This type of segmentation enables marketers to create messaging and products that directly address the motivations and behaviors of specific segments. For instance, the same health beverage might be marketed as an energy booster to busy professionals and as a wellness enhancer to health-conscious retirees. By knowing the values and routines of each group, you can speak their language—and earn their trust.
Two widely used tools support this process:
- Esri’s Tapestry Segmentation divides U.S. neighborhoods into 67 lifestyle-based segments, combining demographic and psychographic data with geographic precision. Marketers can identify where their best-fit customers reside, what matters to them, and how they allocate their spending (Esri, 2025).
- VALS (Values and Lifestyles), developed by Strategic Business Insights, categorizes consumers into segments such as Innovators, Thinkers, and Achievers based on their motivation and resource levels. It’s beneficial for psychographic targeting in brand messaging and campaign planning.
As Anna Talerico (n.d.) explains, “Segmentation allows companies to satisfy the needs of customers better, thereby increasing customer satisfaction and loyalty.” This deeper understanding drives more focused marketing plans, resulting in higher ROI and improved customer retention.
2. Customer Data Analytics: What Your Customers Are Actually Doing
While segmentation shows you who your customers are, data analytics reveals how they behave, especially online. One of the most accessible and powerful tools for behavioral tracking is Google Analytics.
Google Analytics provides real-time insight into how visitors interact with your website or app. You can see where users come from, which content they view, how long they stay, and what actions they take, such as making a purchase or abandoning a cart.
This information is invaluable when building a target market profile. For example, if analytics show that 80% of your site traffic comes from mobile devices, you know mobile optimization is a priority. If most visitors drop off before completing a subscription, you may need to rework your call-to-action or landing page copy.
As noted by Sawtooth Software (2024), “Behavioral analytics tools such as Google Analytics enable marketers to identify who is interacting with their brand and how, which is essential for refining target audiences.”
The beauty of Google Analytics lies in its ability to track real behavior, not just stated preferences. This closes the gap between what customers say and what they do—a difference that can make or break a campaign.
Building a Smarter Marketing Plan
Combining segmentation and analytics provides marketers with a more comprehensive understanding of their audience. Segmentation explains why people behave a certain way, and analytics shows how they actually behave. This combination is critical when developing your marketing plan for a new product or service.
Let’s say you’re introducing a new adaptogen-based soda. Using Esri Tapestry or VALS, you could identify lifestyle segments that prioritize health, convenience, and sustainability, such as urban millennials or suburban yoga moms. Then, using Google Analytics, you could refine your messaging and digital tactics by monitoring which pages or ad headlines these consumers click on most.
The result? A data-informed, customer-centric marketing strategy with less waste and more impact.
411 Takeaways
Clearly defining one’s target market necessitates a systematic approach rather than reliance on conjecture—it calls for the application of appropriate analytical tools. Market segmentation analysis elucidates the attributes of the target demographic (the “who”) and their underlying motivations (the “why”). In parallel, customer data analytics provides insights into consumer behaviors and interactions (the “what” and the “how”). When utilized in tandem, these methodologies constitute the foundational elements of an effective marketing strategy.
References
Esri. (2025). Tapestry segmentation. https://doc.arcgis.com/en/esri-demographics/latest/esri-demographics/tapestry-segmentation.htm
Sawtooth Software. (2024, February 13). Market segmentation best practices: Tips for accurate audience identification. https://sawtoothsoftware.com/resources/blog/posts/market-segmentation-best-practices
Talerico, A. (n.d.). Market segmentation and targeting: Identify potential customers, choose target customers, and create value. Corporate Finance Institute. https://corporatefinanceinstitute.com/resources/management/market-segmentation-and-targeting
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