Segmentation – Classifying parts that contribute to the whole.
It’s no secret. 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 addressed the egg it has been about marketing related matters. You might say I’m obsessed with two of the many things I love in life—eggs and marketing.
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. Too many view markets as homogenous. However, they’re not. All markets consist of segments. As Philip Kotler states, “If you’re not thinking segments, you’re not thinking marketing.”
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 will 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 versus moderate versus infrequent purchasers.
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—even in these inflated times).
Everything is and can be segmented. Examples abound around us. All it takes is for us to open our eyes and be awake to the world of 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).
According to Mr. Craighill, there 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 are undoubtedly more and different ones, as people’s views shift.)
Now back to 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 the segment is the hallmark of sound 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 it may be used 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 for marketers 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 different 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 chicken eggs. Doodle with a flowchart to uncover more distinctive and productive segmentation to create and market your brand.
Don’t forget to enjoy your eggs—your way.
Peace and best wishes in making your marketing matter more through thoughtful target customer-segmentation,
Richard Czerniawski and Mike Maloney
If you found this issue of DISPATCHES helpful, please register for this blog and Marketing Matters at www.bdn-intl.com
Strive to achieve Marketing Excellence. Read AVOIDING CRITICAL MARKETING ERRORS: How to Go from Dumb to Smart Marketing. Learn more here: http://bdn-intl.com/avoiding-critical-marketing-errors