Any colour you like as long as it’s
black - segmentation: the basis of
marketing
Marketing Hoorcollege blok 2 week 2
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Or:
Why I am not in the same target
group as Brad Pitt & Johnny Depp (at
least) when it comes to cars
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Learning goals
 By the end of the colleges and reading you should:
 Know the three elements of marketing core strategy:
segmentation, targeting & positioning (STP)
 Understand how STP helps organizations deal with one of
the main trends in western and some developing markets
today
 Be in a position to develop a marketing segmentation,
choose a target group and create a positioning for an offer
* You should have also read chapters 9 & 10 in the last blok
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Agenda
 A quick recap
 The aims of blok 2
 If you’re not segmenting, then you’re not marketing
 Segmentation
 Summary
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Previously on…
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We argued that marketing is about
creating mutually beneficial exchange
QuickTi me™ and a
T IFF (Uncom pressed) decom pressor
are needed to see t his pict ure.
QuickTime™ and a
TIFF (Uncompressed) decompressor
are needed to see this picture.
Exchange is the process
where you willingly give
something of value to
another, in return for
getting something of value
to you
QuickT ime ™an d a
TIFF ( Uncomp res sed) deco mpre ssor
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QuickT ime ™an d a
TIFF ( Uncomp res sed) deco mpre ssor
ar e need ed to see this pictur e.
And that marketing is a process that
creates offers to customers
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Our aim in blok 2 is to
 Take you through the process of creating a
marketing offer
 With the exception of promotion - which will be covered in
blok 3 or 4
 Give you some tools (in addition to the UCD tools)
you can use to do this
 Help you understand why this process is even more
important in today’s marketing environment
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If you’re not segmenting, then
you’re not marketing
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Any colour you like, as long as it’s
black
 The Model T Ford is
regarded as the first car to
be built on using a
production line
 Henry Ford wanted to
produce quickly
 Black paint dried more
quickly so the only colour
you could have was black
 Soon Ford lost share to
companies that offered
other colours
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No cup holders please we’re German
 In the 1990’s cup holders
became popular in the USA
 German companies such as
BMW and Mercedes didn’t
see them as necessary
(cars were about
engineering not cup
holders!)
 Their market share fell in
the USA
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The mobile phone is just a device
 Early mobile phones were
seen as just devices to
make calls
 The idea of a mobile phone
as a fashion accessory was
at first not accepted by
many companies
 Nokia did understand this
and were the first company
to offer different designs and
colours
 Nokia gained huge market
shares
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The lessons of these stories
1. The customer really is king
2. One offer never appeals to everyone
3. Offers to everyone will be beaten by offers to
targeted groups
4. Marketing is becoming more complex (and more
exciting - no honestly it is…)
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Markets are becoming more
fragmented
 In the developed economies at least the idea of
mass marketing is essentially dead
 One product for a large market does not work anymore
 Consumers are becoming more sophisticated
(verfijnd) and choosy




They have better access to information
They have more choice
They are overloaded with marketing messages
They are more cynical
 This is especially true in our “always on” world
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Result: the old model is broken
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What’s wrong?
 The problem is that there are too many “me too”
offers on the market today
 These are products (and price, place, promotion) that try to
reach the same broad market segment with basically the
same offer
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What’s the solution?
 One solution suggested by
Seth Godin in his book
Purple Cow is to:
Make remarkable
products
that appeal to a
smaller better
defined segment
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So how do we do this?
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The start of the answer is…
 Better market segmentation
 Since this allows you to





Target the right segment to approach
Which means you can position your offer more effectively
Which leads to better marketing mixes
Which leads to your customers choosing your offer
And telling their friends
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Segmentation
Not everyone will love you, but some might if
you know who they are
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Segmentation
 A market segment is just a
group of potential customers
with the same needs and
wants
 Marketers use different
factors that might reveal
needs and wants to make
segments
 For example age and
gender are very popular
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But this isn’t good enough…
Remember this?
Based on age & gender we are in the same target group!
Yeah right!
But how can we tell us apart?
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Well marketers tend use
segmentation variables…
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Task:
What would allow you to separate
Brad, Johnny & Charlie?
 As I go through each of the segmentation variables
use the sheet I have given you to work out which
might separate Brad, Johnny and me if you were
company wanting to develop a car
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Geographic variables
 Region
 Continent, groups of
countries such as Benelux,
country, areas with a
country such as the
Randstad, area within a city
such as Amsterdam Noord
 Country size
 City size
 Population density
 Climate
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Demographic variables
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
Age

Gender

Family size

Family life-cycle

Life stage

Income

Occupation

Educational level

Religion

Race

Nationality
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Psychographic variables
 Social class
 Lower, working, middle,
upper
 Lifestyle
 Interests, hobbies, beliefs,
attitudes
 Personality
 Ambitious, introvert,
extrovert, social
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Behavioural variables
 Purchase occasion
 Benefits desired
 User status
 Usage rate
 Loyalty
 Readiness stage
 Attitude to the product,
brand or company
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Multivariable segmentation
 For most products one variable is not enough, it will tell you
little about the target group
 So organizations tend use multivariable segmentation
 This is simply combining segmentation bases:
 Simple multivariable segmentation uses two or more bases from
one category
 E.g. Age and gender from demographic variables
 Advanced multivariable segmentation uses two or more bases
from two or more categories
 E.g. Lifestyle, age, family life cycle and attitude to the product
 Multistage segmentation uses different variables at different times
 E.g. Region, then lifestyle and age
 In general multivariable segmentation leads to better customer
insights
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What makes a good market
segmentation?
 A good market segmentation is one that is:
 Measurable - you know how many members it has and you
can track their purchases
 Accessible - you can contact them and make your offer
 Sustainable - you can make a profit by serving them
 Actionable - you are able develop offers that are attractive
to the segment
 In addition a good segmentation allows you to
understand the customer from their point of
view so that you can make offers that will meet their
needs better than your competitors
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Summary
 The aim of marketing is to create mutually beneficial exchange
by creating offers that are more attractive to customers that
alternatives
 But the consumer is becoming more choosy about what they
consider beneficial
 In the Internet age this is even easier
 As a result offers aimed at “everyone” will be beaten by more
targeted offers
 To survive in this environment we must become better at
segmenting the potential market into meaningful groups that
can be approached profitably
 If you’re not segmenting, then you’re not marketing
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Brad, Johnny & Charlie:
My answer
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