Simple Segmentation Method for Marketers

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Simple Segmenta,on Method for Marketers

Segmenta6on

Defini,on

A group of similar customers who share the same or similar needs

Criteria for need-‐based segments: Ø  Adequate size Ø  Cluster principle: members similar and dis6nct from members of other

segments Ø  Criteria for describing must be relevant Ø  Segments much be addressable

The dangerous of socio-‐demographic segmenta6on

Two men… Ø  Both born in 1948 Ø  Both grew up in the UK Ø  Both have divorced and re-‐married Ø  Both have two grown up sons Ø  Both are wealthy Ø  Both like to spend their holidays in the Alps Ø  Both are world famous

The dangerous of socio-‐demographic segmenta6on

Bases of segmenta6on

Who buys

Market Segments: > Big enough > Reachable > Different

What is bought and

why

Analysis of customer/consumer iden6ty

Socio-‐economic & demographic

Psychographics

Geography

Benefits Percep6ons Lifestyle Analysis of

customer/consumer iden6ty

Subjec6ve measures of response

Usage & Loyalty Price sensi6vity Promo response Channel loyalty

Objec6ve measures of response

Personality AVtudes Lifestyle

Simple Segmenta6on Method

Buying Criteria + Perceptual Map

Mo9vators factors

Good taste Accessible Affordable

Promo response* Awareness of Healthy* Word of Mouth

Hygiene factors

Awareness of Healthy

High

High Promo Response

Low

In good shape

Occasional Consumer

Mainstream

Price Sensi,ve Consumer


Buying Criteria Defini,on

Mo9vators and Hygiene factors that are needed for a customer to make a buying decision.

Buying Criteria

Mo9vators factors: superior characteris6cs to buy from our brand or a compe6tor

Hygiene factors: won’t win business because are vital, but could cause business loss


Perceptual Map Defini,on

Visual technique that aBempts to display the percep9ons of a poten9al customers towards a product/service

Perceptual Map

STEP 1: Buying Criteria

STEP 1: Ø  Write down all of your customer’s buying criteria

Ø  Divide into two groups: Ø  Hygiene factors: essen6als to be in the market Ø Mo6vators: desirables that contribute to buying decision

Ø  Put a “*” by those mo6vators factors on which customer vary (differen6a6ng mo6vators)

Example of Buying Criteria

Product: SoK Drink

Hygiene factors

Mo9vators factors

Good taste Accessible Affordable

Promo response* Awareness of Healthy* Word of Mouth

STEP 2: Perceptual Map

STEP 2: Ø  Choose two mo6vators factors on which customers vary making sure they

are independent from each other

Ø  Make them the two axes of a perceptual map

Ø  Plot some of your customers and where they appear on this map. Are there customers in all four corners? Can you think of four clusters of customers? Ø  If ofen helps to think of specific, named customers Ø  Give the segments descrip6ve labels

Example of Perceptual Map

Product: SoK Drink

Low

Coke Fana,c

Awareness of Healthy High

High

Promo Response

Low

In good shape

Occasional Consumer

Mainstream

Price Sensi,ve Consumer

Personas (example)

SoI-‐Drink Fana9c Kate is a marke6ng student who loves

sof-‐drinks and drinks at least two pints of Coke on a daily basis.

She doesn’t like exercise or sports -‐ She

enjoys fashion, indie cinema and photography.

In good shape: Pete is a 33 year-‐old personal trainer. He is not a big fan of carbonated drinks, he prefers natural juices or sports drinks.

He trains 5 6mes a week and prac6ces several sports including body building

and surf.

Considera6ons

•  This method is a simple academic tool to help the segmenta6on process.

•  All segmenta6on methods should be complemented with company’s and or market data. Example of market sources include: DataMonitor, Mintel and Keynote.

•  The rise of customer insight/analy6cs and CRM has helped to refine the segmenta6on process. CRM systems can provide valuable informa6on to complement the segmenta6on project.

Marketing

Simple Segmentation Method for Marketers