Not all building products have universal appeal across your customer base. As a manufacturer or supplier, it’s important to understand the commonalities and differences between the different customer segments that make up your existing and potential market.

Through market segmentation research, you can divide this broad group, or your target market, into individual subsets who share common characteristics, behaviors, needs, and priorities. This may include demographics, psychographics, geographics, product usage, behaviors, and values.

From there, your team can identify the segments that represent the best opportunities for capturing greater market share, and you can develop strategic marketing and messaging that is tailored to the distinctive qualities, interests, and needs of that specific segment.

Why Do Companies Conduct Market Segmentation Research?

Companies conduct market research to build targeted customer portfolios and enhance their business strategies, both for new product development and marketing purposes. Unlike customer segmentation, market segmentation embraces an outward view, taking into consideration the total market, including prospects, rather than existing customers only. It utilizes a variety of tools for collecting information, such as market research, surveys, and third-party data.

Building products and home improvement brands often use market segmentation research to:

• Understand varying customer needs, preferences, and experiences to curate marketing and products
• More effectively refine and/or expand the company’s target customer
• Identify new opportunities for growth to increase sales
• Guiding the design of new products of features that address unmet needs within specific customer groups
• Determining the most effective sales channels and distribution methods for each segment
• Developing more appropriate pricing strategies that maximize profitability while remaining competitive

What are the Main Types of Market Segmentation?

There are primarily three types of segmentation that are used in market research: Attitudinal, Behavioral, and Demographic. Let’s unpack each type of customer segmentation:

Demographic Segmentation

Demographic segmentation has long been used to define and profile groups based on various demographic traits, be it gender, age, income, region, or any other unique identifying factor. Nearly all research, with enough sample, can include demographic or firmographic segmentation. Such examples might include clustering plumbers by residential or commercial work, looking at the insulation home builders prefer by region, or defining income profiles of do-it-yourself (DIY) versus do-it-for-me (DIFM) homeowners.

Behavioral Segmentation

The behavioral segmentation method groups prospective and existing customers based on how they interact with your brand, digital platforms (website, social media, email marketing, app, etc.), or product. Behavioral segmentation may answer questions such as:

• How many other stores do they consider before shopping yours?
• What types of content or offers increase click-through rates and conversions?
• What tools (coupons, websites, store visits) are used most often to determine which product to purchase? 
• How often do customers place repeat orders, and what factors influence their recency of purchase?
• Are there specific features or channels that drive heavy usage?

Behavioral segmentation can help you find the most engaged customers and allow for better targeting and better use of marketing resources. You can focus on the customers most likely to purchase your product or shop your store.

How Behavioral Segmentation Benefits the Home Improvement Industry

In the construction and home improvement industry, this type of research often focuses on purchase and usage behavior, such as what resources are being used to research a product, what types of information are they looking for when researching, and what are the primary questions being asked about the product.

When you group your data based on the information customers seek, you can refine those factors influencing their purchases, uncovering the product features or service aspects they most often use and are influenced by.

When doing behavioral segmentation, we can generally figure out what customers want and why, but oftentimes, this method doesn’t dig into why other products/features/methods don’t work for them and/or how those can be improved. In many cases, qualitative research in conjunction with quantitative can help to better answer those questions.

Attitudinal Segmentation

Where behavioral segmentation can sometimes be limited to understanding what a respondent says or does, attitudinal segmentation can add more understanding on the why of their decision making. Attitudinal segmentation is based more on beliefs and opinions and less about behaviors. This methodology, and the results it provides, can help better market a product for an increased likelihood of purchase.

Attitudinal segmentation is often based on asking very targeted questions, often ‘agree/disagree’ statements. Using cluster analysis, you can find respondents with similar attitudes and opinions about a certain product, shopping method, or just general feelings. Once the clusters, or groups, are determined then further analysis can be done to understand the demographics or other traits of the group. For example, you may find that a group of homeowners who prefer a certain color of a product are more likely to be of a certain age, gender or region.

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How Do Manufacturers Use Market Segmentation Research?

Market segmentation research helps manufacturers identify distinct groups of customers based on their needs, behaviors, attitudes, and buying patterns. Rather than treating the market as one audience, organizations can prioritize the segments that offer the greatest opportunity for growth, improve marketing efficiency, guide product development, and strengthen competitive positioning.

What Questions Can a Market Segmentation Study Answer?

For building products brands, market segmentation research can provide a wealth of information. For example, the study can help answer questions like:

• Which customer segments represent the greatest growth opportunity?
• Which customer groups are most profitable?
• How should products, messaging, and positioning differ by segment?  
• Which segments should receive more marketing investment?  
• Where are competitors strongest and weakest?  
• What unmet needs exist within each segment?  
• Which personas should sales prioritize?  
• How should product development differ by segment?

How Long Does a Market Segmentation Project Take?

The time it takes to complete a market segmentation project varies based on several factors, including:

• The methodology you use
• The complexity of your research objective
• Sample size and diversity
• Stakeholder availability

In general, from planning to reporting, a market segmentation project will take between four to eight weeks.

How to Choose the Right Type of Market Segmentation

Deciding which types of market segmentation is best for you is an important step of the process. As with most analytical techniques, it depends on what problem you are trying to solve or the main objectives of your research.

Demographic segmentation is a powerful tool to better understand who your target audience is and optimize marketing efforts and strategies. It is the recommended type of segmentation when your goal is to understand who is buying your products, or most likely to.

Behavioral segmentation can help to find the most engaged customers and allow for better targeting and better use of marketing resources. You can focus on the customers most likely to purchase your product or shop your store. Using behavior segmentation also can help you improve your channel strategy.

Attitudinal segmentation provides beyond surface-level demographics to understand the psychological drivers of consumer behavior and can help craft more focused, compelling marketing campaigns. This is the preferred type of segmentation if your goal is to understand why customers buy certain products. Additionally, you can use it to develop and refine customer personas. And a mixture of attitudinal and behavioral to create a useful roadmap for product prioritization.

How does The Farnsworth Group Approach Market Segmentation Research?

The Farnsworth Group specializes in segmentation studies for building products manufacturers, providing actionable insights that support strategic decision-making across marketing, sales, and innovation. With decades of experience conducting research in your industry, we bring you proven solutions to your challenges. Our experts hit the ground running to design customized research that provides you with actionable insights to grow your business.

We can work with you to define and customize your research objectives and select the best methodologies to apply; collect data and vet each individual respondent; and apply deep analysis to the data to deliver insights and recommended actions based on your objectives.

Whatever your needs, our experienced market research team at The Farnsworth Group can provide you with the right tools to conduct effective segmentation research and collect valuable insights to help you successfully forecast the market and strategize your go to market tactics accordingly.