Segmentation – Classifying parts that contribute to the whole.
It’s no secret that I love eggs. I’ve written about eggs in DISPATCHES (Egg-actly Brand Worthy Idea) and Marketing Matters (Serving Up The Whole Egg). Each time I’ve contemplated the egg (better it than my navel) it has been relative to marketing related matters. You might say I’m obsessed with two of the many things I love – eggs and marketing. (Don’t worry. I love and am obsessed with many more things in my life.)
Now, we’re tackling the egg again. In this instance, it has to do with segmentation. Candidly, it baffles us that marketers have difficulty with segmenting their markets and target-customer populations. Many view markets as homogenous. However, they’re not. All markets consist of segments. It is our responsibility to: 1) identify (i.e., classify) the segments and determine which we can better serve with our brand; 2) which target-customer segment can better appreciate our offering; and 3) which should we choose to pursue with single-minded purpose.
We can segment in the most fundamental ways. For example, if we are segmenting purchasers, we might do so based on our customers versus competitive customers. As per our customers, we might further segment based on whether they are heavy purchasers versus moderate versus occasional purchasers.
And, segment we must! We don’t have the resources to go after everyone. While there is no one sure way to success, one sure way to failure is to try to be all things to all people. Moreover, strategically appropriate segmentation will enable us to get more bang for the buck (or yuan, yen, euro, peso – whatever your currency).
Everything is and can be segmented. It is all around us. All it takes is for us to open our eyes and be awake to segmentation. For example, politics, which intrudes on our daily lives (and livelihood) is segmented. While the two dominant parties are the Democratic and Republican parties there are a host of minor parties such as the Libertarian, Green, Socialist and even Communist Party in the U.S. Believe it or not, there’s also a U.S. Marijuana Party (we kid you not).
Even a specific political party is not homogenous but is comprised of segments. A 2012 Washington Post and Kaiser Family Foundation Study reveals five distinct segments of Republicans based upon their differing values, view on politics and policies (The Fix – The many faces of the Republican Party, Peyton M. Craighill, The Washington Post, August 20, 2012). These are Old School Republicans, Tea Party Movement Republicans, Religious Value Republicans, Pro-Government Conservative Republicans, and Window Shopper Republicans. The same study identified four segments within the Democratic Party. Note that today there may even be more, or different ones, as people’s views shift.
Now for the egg, it, too, may be segmented. Michael Ruhlman in his book Egg – A Culinary Exploration of the World’s Most Versatile Ingredient, identifies that an egg is more than an egg. Mr. Ruhlman writes, “In the kitchen, the egg is neither ingredient nor finished dish, but rather a singularity with 1,000 ends.” 1000 ends! These ends are representative of different “use” segments. They are classifications developed by Mr. Ruhlman based upon how one might use the egg in cooking.
One of the ways he classifies eggs is from the designations on cartons. These are:
- No Hormones/No Antibiotics
- American Humane Certified
- Animal Welfare Approved
Additionally, he defines each. And, while they may sound similar, there are distinct differences among them. (Distinction and the ability to reach a distinct segment is the hallmark of segmentation.)
However, Mr. Ruhlman goes one step further. He addresses the question “What can you do with an egg?” with a flowchart, showing the myriad ways of using it. In doing so, he is segmenting its use in cooking. He states, “The answer – after the obvious ‘all kinds of things’ – is that it depends. Are you going to cook it in its shell or out (second segmentation – first segmentation relates to whether you are going to cook it or use it as a tool)? If you leave it in its shell are you going to cook it hard or soft (third segmentation)?” This basic segmentation is just the start!
The book’s table of contents reveals Mr. Ruhlman’s fundamental segmentation:
- Part One: Egg/Whole/Cooked in Shell
- Part Two: Egg/Whole/Cooked out of Shell
- Part Three: Egg/Whole/Cooked out of Shell/Blended
- Part Four: Egg/As Ingredient/The Dough-Batter Continuum
- Part Five: Egg/Separated/The Yolk
- Part Six: Egg/Separated/The White
- Part Seven: Egg/Separated but Used Together
Remember, we’re talking about the rather ubiquitous egg! Imagine, what you can do to segment your category, category users, etc.
There are many ways to segment. Here are a few:
- Geographic– Where do I invest?
- Market – Where do I compete in the market?
- Constituency– Who do I address?
- Sales– Whom do I target to sell (or market)?
- Behavioral– Which behaviors do I need to address?
- Target–Customer Demographics – What do they look like?
- Target-Customer Psychographics – How do I appeal to them?
However, in most cases, we are segmenting the market and target-customers. As per segmenting the market, we must keep in mind that the current segmentation represents a snapshot in time of the current landscape as perceived by marketers and/or target-customers. If we want to occupy a unique space, we need to find a way to change the view. We need to get customers to perceive the market in a new way that favors our brand. We call this “Marketect” thinking. Steve Jobs, Jeff Bezos, and Richard Branson are examples of Marketects as they created businesses and segments that did not exist.
In segmenting target-customers there are many ways to go. They are limited by our imagination and ability to make it happen. And, while marketers use demographics most frequently, this practice ignores distinct value segments that provide, well, real value. A better approach is to use psychographics as it addresses values, attitudes, aspirations and other psychological and lifestyle factors that are more likely than demographics to provide a meaningful connection to your brand.
Beware of and don’t settle on broad-stroke segments such as Republicans, Millennials and hen eggs. Doodle with a flowchart to uncover more distinctive and productive segmentation to create and market your brand. And, enjoy your eggs your way.
Richard Czerniawski and Mike Maloney