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Archive for the ‘Segmentation’ Category
Friday, July 23rd, 2010
A light-hearted discussion about cats and dogs this week led Simi Dhawan to question what drives behaviour and to what extent we should believe the statistics we are told.
Would you say that you are a dog person or a cat person? Common belief has it (or what I’m possibly more inclined to refer to as “semi-pseudo social philosophy”) that an individual either prefers one or the other – rarely both, as reflected in their personality.
It was a recent conversation with work colleagues over the weekend that led to this issue being raised wherein it was concluded that I was the latter following my inarguable mini-obsession with a colleague’s pet cats…….or rather, giant cats of the Maine Coon kind. For those of you unfamiliar with this breed, a short synopsis is that they originated in Maine, North America and are renowned for growing larger in size than your average domestic cat, characterised also by longer coats and a bushier tail. I include an exemplary picture below:
I have to say that whilst I do rather like oversized furry felines, I was reluctant to dismiss my love of dogs based on this very factorial – I happen to like a range of dogs – varying from those which are furry and oversized (think Samoid as pictured on the left below), to the downright so-awkward-they’re-cute “Sausage Dog” types (as pictured on the right)!
But questions which ransacked my brain did leave me wondering where these facts, beliefs or indeed myths really stem from. Are they actually rooted in any truth?
In a frenzied quest to curb my curiosity, I ran a quick internet search to see if I could find out whether my colleagues were right about my social disposition, carrying out a short “Pet Personality” quiz online at the following location: http://quiz.ivillage.com/home/tests/catdog.htm. After some rather banal questioning which commenced by asking me about my preference for a “Perfect Friday Night” (of which the possible tick box choices differentiated the socialites who enjoy “a wild night out” from the less extreme independent impartial persons who “prefer a quiet night in with a book” (original, eh?), the quiz concluded that I was indeed, a “Cat Person”, with the following personality traits:
“As a cat person, you approach life with thoughtfulness. You are self-aware and have close friends who will be there for life. The subtleties and mysteries of the world intrigue you. Your ideal Friday night is good conversation or a movie you can’t figure out the ending to. Your take-charge attitude sometimes meets with conflict, but you always surpass expectations when it comes to your work. You value intelligence, grace and independence, which is why a feline friend is best for you”.
Crumbs. My colleagues were right. However, having the typical Cat Personality trait of being intrigued by world mysteries (I would argue true in specific cases!), I decided that I wanted to dig deeper into how public opinions are formulated.
As a starting point (and whilst continuing on with this captivating “Cat” theme), I recall a colleague at the aforementioned gathering discussing the popular TV series “8 Out Of 10 Cats”. A majority will have probably heard of this, but for those who haven’t, the programme is centred on quizzing teams of celebrity respondents about various opinion poll findings and statistics. The title of the show was famously derived from a Whiskas Cat Food campaign which claimed that 8 Out Of 10 Cats prefer Whiskas. Whilst this campaign was one of the first to adopt this style – triggering others to do the same, the inevitable question “overlooked” is ‘What on Earth are these cats / cat owners comparing Whiskas to and saying they prefer it over?’ Is it another cat food product? Is it a multitude of cat food products? Is it something other than cat food such as Heinz Baked Beans (in which case, no contest really!)? What exactly is it?
It is a common underpin of opinion polls used in advertising to state a loose statistic completely out of context, which excludes the comparative element that would allow it to make logical sense! We shouldn’t have to wait too long in an evening before any such campaign graces (or plagues!) our television screens. Yesterday evening, for example, I was informed that 9 out of 10 people with sensitive teeth do nothing about it (thanks Sensodyne Toothpaste) and that 9 out of 10 women would recommend the new “falsies” mascara range to a friend (thanks Maybelline). But in what context has this data been derived? Is this plausible data which has virtuously reached a conclusion from a fair and objective series of questions whereby respondents were introduced to a number of competitor products, or are we, the consumer, being led into a false sense of security by a set of makeshift claims? In other words, are these findings drawn from designing a study that is biased from the start, intending to flog us a “credible” product backed up by statistics?
In the case of our dog or cat person phenomenon, we could use our logic and life experience to assume that this has been clearly born as a by-product of social situations, based on the following premises:
- Dogs and cats are the most commonly owned domestic pets in most Western countries;
- Most animal lovers will lean towards a preference of one or the other;
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This has led to conversations where people have discussed and justified their decisions to keep either dogs or cats;
- The reasons stated are seldom aesthetically focused i.e. about size, fluffiness etc, but rather, behaviours and personalities i.e. dogs are more loyal, gentle, friendly, less temperamental, obedient and tolerant, whilst cats are not as reliant on their owners for walks, do not slobber, take up too much space, are quieter and do not require as much fuss and attention.
Statistics and previous studies tell us that the majority of people are dog persons and not cat persons. I have to say that following a quick chat amongst my colleagues, this point was supported when only 2 out of 6 of us preferred our feline friends over our canine comrades. For more “concrete” evidence, I decided to review an epidemiological study conducted by the Department Of Veterinary Clinical Science in the University Of Liverpool (2007), which looked at 1,278 households in Cheshire (my local area!) to examine the different profiles of households who own dogs compared to those who don’t. The study indeed supported that dogs are the most popular household pet where 24% of those approached were confirmed as dog-owning out of a total of 52% who owned any type of pet (whilst cats came in at a close second with 22%). But did this yet tell me anything about their choices to own either one or the other? Could I yet attribute any of this to a particular personality trait?
Helping to answer this question, the study continued by asking these households what their main reason was for owning a dog, whereby 68% reported that it was for companionship (makes sense – dogs love to remain in the company of their owners versus the ever-wandering cat), whilst 42% reported that they’d always had a dog. The latter statistic brought into question then whether it is actually environmental factors which shape our decisions i.e. nurture, versus an inherent personality disposition i.e. nature. At this stage, my mind boggled more than before and so I eagerly read on……
The report then revealed a staggering statistic; 62% of households who did not own a dog when interviewed had actually owned one at some point previously in their lives! So does being raised with a dog make you less likely to own one? Actually, no. It would appear that social situations change over the lifespan, which is why certain households are more likely to own a dog. To back this up, some of the reasons people stated for not owning a dog included “working or being out all day” (26%) or “not having enough time for a dog” (15%), where evidently a large factor is lifestyle and the practicalities of looking after a pet which demands time rather than a dislike for dogs per se (which incidentally, was the reason reported by only a small 10% of households!)
By my reckoning, public opinions do appear to be rooted in everyday observations and conversations – very much like the one which instigated my Thursday Night Insight this week. However, I would argue that we should always be cautious about over-inflating the value we might attach to a standalone statistic without also taking into account some surrounding facts about the topic or area of interest itself. In today’s example, whilst labelling a person as a “Cat Personality” or a “Dog Personality” helps us to more easily (and mentally) pigeon-hole otherwise complex individuals into a certain segment of character traits, we should be able to accept that it is situations and environmental influences which play a significant part in driving behaviours…and that these can potentially change over time. This philosophy, of course, is one which stands true in all B2B markets where, similarly, you are certainly always better placed to make decisions after asking a sample of your target market the right questions, rather than simply second-guessing their thoughts, feelings and opinions based on secondary, or even dated research statistics.
In short, a poll conducted today, will not always stand true tomorrow……..and as for The Truth About Cats and Dogs……..I’d argue that your best bet is to ask the owners (the most complex breed of all!) themselves.
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Thursday, June 10th, 2010
Taking us on a tour of his opulent Beijing hotel, Matthew Harrison this week explains why segmentation of a target market remains crucial.
I am writing this latest installment to Thursday Night Insight from my hotel in Beijing. Beijing is a city I know well and I have become accustomed to its hospitality – the faultless service in restaurants, the branch of Subway that delivers my foot-long sandwich for free, and the animated army of traffic lieutenants who bark at passers-by if they so much as lean over the road when the pedestrian light is on red. Sadly they don’t afford the same courtesy to the smoke-belching construction trucks that make it their business to run over pedestrians when the lights eventually change.
Variety being the spice of life and ‘adventurous’ being my middle name, I decided to sample a new hotel for this latest visit to our Chinese office. The Japanese-run Jinglun has served me well over the years, but having been charged the equivalent of $10 for half a pint of warm Tsingtao during my last visit, I decided to venture further afield to the Jianguo Hotel – a lengthy 1-minute hike away and self-proclaimed Garden Hotel of Beijing – which for some reason was offering luxurious rooms at knock-down rates.
Upon my arrival I was immediately impressed, as I always am when Chinese hospitality is involved. The politest man in the world took my case from the cab without asking. I never saw him again, but by the time I arrived at room 739, my luggage would be waiting for me. The garden theme was plain to see, the labyrinthine corridors snaking round a series of open-air ponds and trellised courtyards. The sight of a French restaurant adjacent to an English pub at the corner of the foyer meant that I immediately assumed I was in heaven, even if the 3 photocopies of my visa, passport and credit card seemed an excessive way of granting me entry.
One of the five-strong gaggle of receptionists eventually gave me my room card, contained in a small cardboard booklet advertising the English pub, French restaurant and 3 other onsite establishments, including Shang Court Chinese Imperial Cuisine – or, as its catchy tagline reminded me, ‘The only luxurious restaurant with the imperial palace and feudal official mansion cuisine of the Shang Dynasty in Beijing’. I made a mental note to return later and find out whether the food was as stodgy as the advertising.
I headed down 3 corridors, around 4 gardens, under 2 pagodas, through a pond, over a crocodile infested ravine, up 6 floors, down another corridor and into my room. It was a sight to behold. A huge plasma screen looked down on me imposingly. A green velvet sedan-chair lazed seductively in front of the window. Beneath 2 glass shelves stocked with Dragonseal 2008 vintage, the mini-bar hummed its sensuous hum, pouting its lips and beckoning me towards it with come-hither eyes and lovestrewn promises of Heineken straight from the can.
The room was as confusing as the hotel itself. As if the boastful attention seeking of the plasma screen wasn’t bad enough, its brash identical twin was suspended just feet away. I counted at least 4 waste paper baskets – why? The bath had 3 taps, one less than the number of telephones dotted around the room. 5 mirrors vied for space with 6 cabinets, a desk, and a mysterious contraption that looked like a zimmer frame for a man with 3 legs.
20 hours after leaving home, I threw the 17 decorative cushions onto the floor and collapsed onto the king-sized bed, determined to let fatigue take its toll. The minibar hummed with dejection whilst the Dragonseal glared its hateful blood-red disapproval.
But this room would not let me sleep. It was just too much. Too much attention, too much fuss for a half-asleep Englishman. This beautiful hotel, this monument to sino-european chic, was not for me. I began to long for the wide wildlife-free corridors and blanched, single-screen rooms of the Jinglun hotel. The Jianguo was wasted on me.
This hotel was forgetting the basics of segmentation, which divides a target market into groups with distinct needs, the supplier charging each segment a price aligned with the benefits received. In selling me this room, the Jianguo made a crucial mistake – it provided me with a luxury offering at a bargain basement price. The effective segmenter would have dealt with me in one of 3 ways:
- Provided me with a more basic room, in line with my requirements and the price I was willing to pay.
- Sought to upsell the luxurious room, highlighting its benefits and charging me extra for them.
- Not done business with me at all. Crucial to effective segmentation is to know who your customers are, and who your customers are not. The only customers in a properly segmented market are those whose needs and budgets are aligned with the benefits they receive. Resources and time are only spent on the segments that the supplier chooses to serve.
Segmentation should be regarded as a strategy, not a tactic. Whilst it is tempting in the short term to ‘leave value on the table’ in order to ensure a sale and increase cashflow, in the long term this is just as self-defeating as raising costs too high. High costs will eventually erode margins and alienate the target audience that is prepared to pay for the benefits you offer.
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Thursday, May 13th, 2010
By giving us an insight into the creative and sometimes surreal world of advertising, Simi Dhawan rightly reminds us that it’s better to risk knowing about a failed plan than to risk implementing a plan which will fail…
As is routine within our so-called “modern world”, no week would follow the norm if a plurality of “forwarded emails” did not make their merry way into my personal inbox. Whilst I can appreciate the heartfelt sentiments that might go into a friendship chain mail, I’ve seldom the patience to pass these on and, frankly, I find them more than mildly irritating. (Having to manually delete each one wastes at least a few seconds of my life – possibly several hours spread over a lifetime!) However, one which didn’t follow this same ill-fate by instantly grabbing my attention included the artwork of a Mr. Julian Beever – a British artist now famous for his ability to create 3-D illusions using just chalk (and an eye for detail) on pavements all over the globe. By some, he has been bestowed the respectable title “Pavement Picasso”. I include one such example of his ingenious work below:
At first glance, it’s difficult to comprehend how a sketch could be made to look so real and far removed from a standard 2-D drawing. The answer can be found in the angle at which the photo is taken and only one perspective allows for the 3-D effect we are seeing, as the photographs below demonstrate:
Whilst this startlingly clever trick-of-the-eye might be considered no more than “art for art’s sake” by some – merely a momentary distraction from whatever we were doing before we caught sight of these images – I beg to differ. The talented efforts of our aforementioned “Pavement Picasso” are, in fact, modern-day examples of some very creative advertising, and it is certainly no accident that these have landed in my inbox – or that I now share them with you! To prove that this 3-D image technique has been used in practice more explicitly as an advertising medium, see the following example, courtesy of the German-owned company Bionade:
At the core of any project we are assigned, in one form or another, every client ultimately seeks to strengthen their brand. From market segmentation and product testing, through to customer satisfaction and value propositions, all of these research agendas allow an opportunity to communicate with customers/potential customers and raise awareness. Even if we do not explicitly ask questions about the brand itself, it’s part of our professional DNA as researchers to ensure that we meet our responsibility to positively represent our client when communicating with these respondents – so as to (at the very least) protect the reputation of our client’s brand.
An array of marketing mediums ensure that we meet the goals we set ourselves in getting our message across and reaching our target audience – ranging from branded products, literature and POS materials, through to posters, banners, newspapers, trade magazines, television adverts and internet websites (to further examine some creative design ideas, you can view images of multitudinous campaigns at www.toxel.com).
This week alone has seen my involvement in several projects centred on this ever-present theme of advertising and, whilst I’d like to conclude that research outcomes have offered me a foolproof insight into surefire campaign approaches, I’m afraid I can’t quite claim that to be the case. In practice, every company needs to assess their (often inter-related) unique target markets and end-goals thoroughly, to create a powerful and effective bespoke solution to the continual challenge of raising both brand awareness and perception. Unfortunately, ad-hoc choices based around a “gut feeling” of what might work, in short, might work – and that’s the point. It’s a time-consuming and expensive process to invest in any such campaign and, to avoid unnecessary risk-taking, we shouldn’t launch into these blindly – careful planning is imperative.
Led from research experiences thus far, as a starting point, my advice is to seek thorough answers to the following 3 questions (although possibly not at the same time):
- Who is my target market?
- How do I reach them?
- What do they want?
Most interestingly, it is the first question which is most understated in practice and actually, it is the pre-cursor to the others. Only too often, we see that it is sometimes a pre-agreed business plan or budget allocation which sets our creative minds spinning – and very like the 3-D drawings we saw earlier, our own preconceptions offer a sometimes misleading perspective. As a result, possibly in our understandable eagerness to reach our customers, our focus naturally tends to shift to the latter two questions which effectively cover off questions we want to know to set the ball in motion. Questions such as “What do they want?” “Which are their preferred advertising mediums?” “How can we improve these or better our competition?”
Whilst these are crucial questions, a fundamental backdrop to bettering our understanding is “Who is our audience?” “Do their needs differ based on different parts of this market or are they similar?” “Do we need to consider multiple avenues of communication to suitably engage with different parts of our market?”…and so forth.
Collectively, all questions we ask should strike the correct balance between what we would like to ask in relation to our preconceptions and what we need to know to make suitably informed decisions – even if the outcome directs us to completely review our current strategies and plans (better to risk knowing about a failed plan than to risk implementing a plan which will fail!).
In short, as our “Pavement Picasso” might commend – our chalk is any problem drawn-out or created by a business; the pavement is our canvas or research design to lay out the problem; the passers-by are our audience feeding us their thoughts and opinions……whilst we, the researchers, seek to ensure that our perspectives are not skewed by any illusions…so that we can help reveal the real picture.
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Tuesday, October 6th, 2009
Most of you reading B2B International’s blog will be marketers of b2b products and services. But how often do you think about those end consumers? They may not be able to buy your products in stores, but there is a school of thought which says that if you do market your business-to-business product or service to consumers, you could create new demand from potential business partners.
So says ‘B-to-B-to-C’, an interesting article in September 30 issue of Marketing News.
The article reminds us that behind the face of many consumer products and services, there’s a business-to-business brand that distinguishes the product from the competition. These b2b ‘ingredient’ brands all help to create the product that the end consumer is ultimately looking for. Some b2b brand managers therefore market to consumers, hoping that if end-users care about their brands, business partners will embrace them and promote them.
If this is a route you wish to go down – and there can be little doubt that this is a bold strategy to adopt – there are no hard and fast rules as to how much of your marketing budget should be allocated to the different business and consumer marketing efforts. Indeed, if not done correctly, marketing your b2b brand directly to consumers can be a very easy way to spend a lot of money with very little return.
A good starting point is – as always – thorough research. Research can demonstrate to you whether your brand possesses a distinct value and whether it could impact positively on a consumer brand’s profile and price point. If this is the case, consumer marketing may be an option for your b2b brand.
Try to convince your b2b client to promote your brand on their product: this will make your b2b ‘ingredient’ matter to consumers. Just make sure that your ingredient brand’s stand-out attribute is clearly explained to the end consumers so you can ultimately encourage them to demand products that possess your brand. To do this, its distinctiveness needs to resonate with end users, so make sure your research shows that consumers see the value of your brand. A segmentation study may, for example, determine which types of consumers would be attracted to your brand offering.
The article finishes with some words of advice for anyone doing B-to-B-to-C marketing: You need to help the consumer products brandishing your ingredient to succeed. Put simply, if they win, you win.
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Friday, October 2nd, 2009
Eve Lenkowsky’s first Thursday Night Insight shows us why careful segmentation of our target markets is vital to survival.
At the risk of coming off as the dorkiest member of B2B International, I’m going to tell you about my latest hobby: fish. That’s right, I’m a ichthyophile. Say that one 3 times fast.
When I bought my fish tank a couple of months ago and began planning out the aquatic wonderland that would house my flippery little friends, the possibilities seemed endless. The tank can hold 30 gallons of water, and that means a whollllllle lotta fish. My childhood days of little fish bowls and dime goldfish were a thing of the past.
With the tune of "Under The Sea" playing in my ears and images of delicate angelfish, friendly flounder, and funky-looking bottom feeders dancing through my head, I waltzed into PETCO and told the pet store people about my "vision." The fish lady smiled as I pointed out which fish I liked, and she told me a few facts about each kind—it was all very educational. Everything was going great…until I told her I wanted all of them. Apparently, that idea was dead in the water.
You see, every species of fish has its own narrow range of water pH levels that it prefers to live in. If you put a fish in water that goes outside of this range, it will suffer or die. But when a fish is in the right kind of water, it can flourish and prosper. I wouldn’t be able to take home that whole assortment of fish because they wouldn’t all be able to live in the same tank together, no matter how large it was. So realistically, to make my tank the best it could be, I had to acknowledge the fact that I would have to make choices. I couldn’t have all of the varied types of fish I wanted since they all had different needs and behaviors, but that didn’t mean I couldn’t still have a really cool tank.
I asked the fish lady to help me categorize the species that I liked by their approximate pH level needs. To make things easy, we created three basic segments: the acidic-dwelling fish, the neutral pH fish, and the fish that need a more alkaline environment. With that settled, I would just need to choose one of the three segments I’d identified, then design my tank around the types of fish I’d chosen within that segment. This would let me make it an optimal environment for them to live in and also for me to enjoy visually—win/win.
The same thing can go with segmentation studies in market research. Segmentation is crucial to marketing because once you identify the segments of customers or prospective customers that you want to do business with, you must set different marketing objectives for each segment. Identifying segments through market research allows you to compare and contrast how portions of your customer base might react to various marketing concepts, pricing, advertising copy or visuals. Essentially, you can test various tactics in terms of product, price, promotion and place (route to market) and see how they stack up among your segments. You can also figure out if their needs or desires differ or have any overlap.
Every business, no matter how much money it throws into its products or marketing, has a finite amount of resources and must make choices about how to use them. Just as I created a beautiful environment and found a rich assortment of pH neutral fish to fill it, so too must businesses identify the best segments to target and fine-tune their offerings according to the segments of choice. Market research helps you to figure out how your offerings and positioning concepts will be viewed by various groups based on their firmographic characteristics, behaviors, or needs. Make your choice, choose your best bait, and go get those customers!
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