Identifying the Segmentation Gap
Segmentation offers several advantages over pure demographics. This includes the shift from demographics to motivations. Modern portfolios are structured around customer values, pain points, and desired outcomes, for example. This ultimately can lead to better resource allocation, with marketing dollars targeting higher valued segments. This tactic can also lead to portfolio simplification and more personalized innovation.
Segmentation may be the new norm, offering differentiation by segment tier and agility in shifting markets, but it is still underutilized, according to some studies. A recent study by Kantar and the American Marketing Association revealed that segmentation is often under-used and therefore doesn’t have the organization impact it should.
Rather than being treated as a standalone insights project, Kantar notes in its article, “Reinventing Segmentation: Moving Beyond Communications to Driving Impactful Strategy,” segmentation ought to be represented across the organization as a way to truly drive consumer-centric change.
“Segmentation works best when designed for clear use cases, applied beyond current markets, and embedded as an organizational change driver rather than a standalone insights project,” observes Kantar.
However, according to the study, there seems to be a gap in the use of segmentation by marketers: “Many marketers and strategists consider segmentation to be the foundation of customer-driven (marketing) strategy, and it is often seen as one of the key tools to build a more customer-centric organization. However, while 72% of marketers agree segmentation is pivotal for truly understanding customers, the use of segmentation is often limited to the execution of strategy (messaging/communications, media planning) rather than being a key driver of the strategy itself.”
Insights Driving Strategy Across the Organization
A potential solution to bridge this gap comes across as three key principles, Kantar notes. “At their best, segmentations provide a single source of truth about the customer, what demand looks like, what customers need, and which needs are not being met. It should drive strategy through coordinated and synchronized execution across the entire organization,” says Kantar.
According to Kantar, investment in segmentation should include:
- Clarify the use cases: Best-in-class segmentations are designed to inform specific use cases and specific commercial objectives so that their impact can be targeted and measured. These use cases can and should go further than solely marketing, powering decisions across product, sales, innovation, and M&A. Beyond the insights/market research team, collaborative multi-functional discussions across teams are key. Ensuring clarity from the start means expectations will be aligned, making it easier to embed the framework in the organization’s ways of working.
- Look beyond the market today: Businesses need to think beyond the current state of the market with their segmentations or risk missing huge opportunities to leverage them as a central strategic tool in future planning. Kantar points to an additional gap in foresight planning. Avoid studies that are too narrow, and focus on future proofing. Only 8% of respondents to the study said their segmentation improved decisions on expansion opportunities. Broadening the aperture with provocative thinking about adjacent categories and shared consumer needs is critical to avoid missing the potential stretch and white-space opportunities the organization could go after.
- Create new behaviors, not just new learnings: Embedding is often an afterthought, Kantar notes. To have an entire organization embrace segmentation, extensive efforts need to be made to properly embed it within each team and integrate it into their ways of working. The study reveals a misalignment in how organizations think of segmentation, treating them as a research project aimed at uncovering new insight, not an organizational change project where the goal is establishing powerful new behaviors. Providing learning programs and inspiration tailored to each use case and reinforced with multiple touchpoints can help teams adopt meaningful changes in their ways of working and unlock significant value for organizations, notes Kantar.
LIONS Insights & Strategy Summit
The LIONS Insights & Strategy Summit will be held Tuesday, June 23, at The Majestic Hotel Cannes. The summit is part of Cannes Lions, which will be held June 22-26, 2026, in Cannes, France.
Join insights and marketing leaders for a day focused on how consumer understanding fuels stronger marketing and business strategy. Co-hosted by TMRE and WARC, this summit brings together insights leaders, strategists, and marketing decision-makers to explore how insights drive brand growth, innovation, and creative effectiveness. Through case studies, debates, and expert discussions, you’ll see how organizations turn insights into strategic action.
In addition, The TMRE Executive Retreat invites a curated group of senior insights and marketing leaders to take part in a day-long think tank on Monday, June 22. Designed as an intimate peer exchange, the invitation-only retreat creates space for candid discussion on the evolving role of insights in shaping strategy, innovation, and business decisions.
Click here for more information on the LIONS Insights & Strategy Summit
Moving Forward with Clarity
As Kantar and AMA’s study shows, there is a gap in the use of segmentation and how it is deployed in the marketing sector. However, that also creates opportunities for insights/market research teams looking to integrate new ways of thinking across teams and strategy functions. This way of thinking about segmentation can be viewed, Kantar notes, as a move beyond insights to one of organizational transformation, “where a consistent and compelling view of the customer is fully ingrained across teams and functions, from business planning to execution.”
Segmentations, Kantar advises, should be forward looking in terms of both the decisions it needs to drive and the market it will cover; more clearly tied to business outcomes rather than research outcomes, integrated as part of key KPIs and commercial objectives; and supported beyond the completion of the initial project with an engaging learning plan guiding teams to integrate it as a crucial part of their planning cycle and day-to-day processes.
Video: “How Understanding Customer Segments Helps Brands Grow Stronger,” courtesy of Knowledge at Wharton.
