Market: Segmentation

01 Jan 2009|Added Value

We create frameworks for segmenting markets which inspire future growth opportunities.

The idea that you can’t please all of the people all of the time is as old as marketing. Nothing like a bit of dividing and conquering to help sharpen a product, target a brand and organise a portfolio. In the beginning, we used to divide markets into demographic segments – later, needs-based segments. After a while psychographic segments became popular. Most recently, channel and shopper segments. All of which have their uses.

We don’t claim to have invented market segmentation, but we like to think we made the subject a whole lot simpler. We stole an idea from the journalists to help make sense of one of marketing’s most important and often most complicated subjects.

It’s a simple idea. Somebody (who) always buys something (what), in a specific place (where), for a specific reason (why), on a specific occasion (when). We learnt that if we could understand each of these five Ws in depth and the inter-action between them all, we could explain more than 80% of all consumer decisions. Over time we discovered that some markets were more “who” driven (automotive, for example), and some were more “why” driven (take salted snacks) and some were a mix. And that a sixth W (why not) was pretty useful too.

We created a framework that provided some of the largest consumer goods organisations in the world with a shared language for discussing segmentation and portfolio issues. It has become the industry standard process for enabling focused marketing investment via a more intelligently designed and future-oriented portfolio. We call it market mapping.

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