How to correctly define and segment the target audience in 2025

In a world where markets are constantly changing and competition is increasing, the success of a business depends on how well you know your customers how well you understand your customers.

For Ukrainian companies working in the context of digital transformation and economic challenges, understanding their audience, their needs, moods, and opportunities is more important than ever.

In this article, we discuss modern techniques that help better understand customers. You will learn how to select your target audience, how to segment it based on different characteristics to plan marketing activities more accurately and increase profits.

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What is a target audience, and why is segmentation important?

A target audience is a group of people who are most likely to buy your product or use your services. Knowing and segmenting your target audience helps:

1. Effectively communicate with potential customers.

2. Optimize costs for attracting your target audience and other marketing activities.

3. Create products and services that better meet your customers' needs.

4. Improve your product and service quality through knowledge of your target audience's profile.

5. Expand markets and customer base.

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What is customer segmentation?

Audience segmentation is the process of dividing customers into subgroups based on common characteristics such as age, geography, behavior, or interests. This allows businesses to offer more personalized solutions and increase conversion rates.

The goal of segmentation is to understand the characteristics of each audience group and create an effective personalized marketing campaign for each segment.

There are four most common customer characteristics:

• Geographical feature: segmenting the audience by place of residence. This could be the area a business aims to cover or where it represents its products (cities, regions, countries).

• Demographic feature: segmenting customers by social indicators: age, gender, marital status, field of activity, income.

• Psychographic feature: dividing by interests, habits, preferences, values, character, lifestyle.

• Behavioral feature: segmenting customers based on their purchasing activity, attitude toward the company or brand, average check size, etc.

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Key target audience segmentation techniques in 2025

How can you segment your audience? Audience segmentation in 2025 is based on modern analytics tools and user behavior data collection. By segmenting based on different criteria, a company can gather valuable insights about its audience and increase sales.

1. Demographic segmentation

This method is based on parameters such as age, gender, income, education level, marital status, etc. For example, children’s product stores target parents of children within a certain age range, while premium boutiques target customers with higher income levels.

Target audience segmentation example

The company Rozetka offers products in a wide range of categories aimed at different age and financial groups. Their marketing includes personalized promotions for different audiences.

For example, for young people (18-25 years old), clothing stores on Rozetka promote bright, trendy clothes at affordable prices. They actively use TikTok, Instagram for advertising campaigns. For high-income customers (30-45 years old), stores emphasize premium brands associated with status, comfort, and technology.

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2. Geographical segmentation

This approach divides customers based on where they live. For retail businesses, this can be critically important because consumer needs differ significantly between cities and rural areas.

• Consider the climate of the region. In large cities (Kyiv, Lviv, Kharkiv, Dnipro), stores offer a wider range of trendy products. For example, outdoor sports stores sell fitness, running, and gym equipment, as these activities are popular among city dwellers. In the Carpathian region (Ivano-Frankivsk, Zakarpattia), the focus is on tourist gear, skis, and thermal underwear, as outdoor activities in the mountains are popular. Clothing stores in Lviv may promote warm winter clothes, while in southern regions, the demand for lighter clothing, swimwear, and water sports gear is higher.

• Analyze local culture or events. For stores in Western Ukraine, national embroidered shirts or products for holidays may be relevant.

Example of use

For example, the Kyiv-based store Kemping Hub optimizes logistics, avoiding transporting unpopular products to certain regions. It sets targeted ads in social media for specific cities. For instance, in Odessa, they promote beachwear, while in Lviv, they focus on ski equipment.

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3. Behavioral feature: segmenting customers based on activity

The behavioral approach takes into account customer actions: how often they buy, what products they choose, how they react to discounts or promotions. With behavior analytics, you can identify loyal customers and those likely to make impulse purchases.

How to use it:

• Implement a loyalty program for regular customers.

• Use retargeting to bring back those who abandoned their cart on the site.

• Offer relevant promotions based on previous purchases.

• For loyal customers: offer exclusive promotions, invitations to private sales, birthday discounts, or early access to new products.

• For customers who haven't bought in a while: send personalized emails or SMS with reminders and special discounts.

• For customers with high average order values: offer premium services (e.g., personal consultant, home delivery).

Audience segmentation example

Eva, a chain of stores selling care products, implements special offers for regular customers and promotions for those who haven’t made purchases in a while. They also offer personalized discounts via mobile app. Using a CRM system, they track customers' purchase histories. They run retargeting campaigns for those who viewed products on the site but didn’t complete the purchase.

Actively working with the customer database helps retain regular customers and win back those who may have lost interest.

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4. Psychographic feature: focusing on interests

This type of segmentation is based on customers' lifestyles, values, hobbies, and beliefs. It allows creating emotionally resonant campaigns.

How to use:

• Study the interests of your audience through social media or surveys.

• Create content and offers that align with their life principles. For example, the popularity of eco-friendly products among customers concerned about the environment.

Customer segmentation example

Ukrainian clothing brand Kachorovska creates products for modern active women who value quality, style, and sustainability. The company’s marketing is based on the values of its clients, responding to their self-expression needs, offering exceptional clothing, shoes, and accessories for everyday wear, travel, or special events.

A sports clothing and footwear store for active people can segment their audience by interests in a different way:

• For fitness enthusiasts: promote sportswear and footwear for gyms or running. Launch marketing campaigns involving fitness bloggers on social media.

• For active leisure lovers: offer tourist gear, durable backpacks, hiking apparel. Collaborate with travel agencies or local guides.

• For environmental advocates: promote a line of sportswear made from recycled materials. Use social advertising promoting nature preservation.

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5. Segmentation by communication channels

In 2025, it’s crucial to understand through which channels it's most convenient to communicate with your audience: social media, email, SMS, offline stores, etc. Different customer groups prefer different channels.

How to use:

• Use social media for younger audiences.

• Send personalized email newsletters to business clients.

• Implement SMS for quick promotions requiring immediate attention.

Segmentation example

Foxtrot company actively works through various channels: they engage the audience via YouTube, Instagram, email newsletters, and messengers. This way, the company reaches both young buyers and older audiences who use more traditional channels.

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Target audience segmentation using the 5W Sherrington method

The 5W Sherrington method is a simple and effective approach to consumer segmentation that helps quickly understand the key aspects of the interaction between the product and the customer. It was developed by Mark Sherrington, founder of the consulting company Added Value.

The method is based on five questions, the answers to which allow you to clearly define the needs, motivations, and behaviors of potential buyers: Who?, What?, Where?, When? and Why?

Who is your customer? (Who?)

Define who your target audience is. What are their demographic, geographic, and psychographic characteristics?

What do you offer? (What?)

Analyze what product or service your customer needs, as well as which problems or requests this product solves. In other words, what you are selling and its unique value. For example, not just an orthopedic pillow, but healthy sleep.

Why do customers need it? (Why?)

Understand what pain or need your product addresses, i.e., the main motivation driving your customer. Is it saving time, solving a specific problem, satisfying emotional needs, or improving quality of life? The answer to this question forms the basis of your product or brand positioning.

When is your product relevant? (When?)

Determine the moments or situations when customers need your product the most. This could be a seasonal need, time of day, specific life events, or spontaneous situations that prompt a purchase. For example, delivery services are most in demand during bad weather.

Where do customers find out about your product? (Where?)

Analyze which channels customers use to interact with your product. These could be social media, search engines, offline stores, or recommendations from friends. This helps you understand where to focus your marketing efforts.

Additional question – "Which?" (Which?)

This question is often applied when you need to further clarify segmentation and identify narrower audience groups for targeting. For example, "Which style of photoshoots is more popular among the 17-25 age group: portrait or outdoor?"

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Practical tips for effective segmentation

1. Collect customer data. Use CRM systems, online surveys, website analytics, and social media insights.

2. Regularly update information. The market and customer needs constantly change, so audience segmentation must be flexible.

3. Test strategies. Check how different segmentation methods affect your sales and conversion rates.

4. Invest in personalization. The more data you collect about your audience, the better you can serve them.

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Target audience segmentation is an important strategy in consumer-brand communications. By using segmentation techniques based on various characteristics, companies can better meet customers' needs, increase loyalty, and boost sales. Effective audience management is the key to success.