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Archive for the ‘Segmentation’ Category« Previous Entries Next Entries »(Fish) Food For Thought: Segmentation Fun at Your Local Pet StoreFriday, 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! Recognising the Price TypologyFriday, August 21st, 2009
At a time when consumers and businesses alike are watching the purse strings, Carol-Ann Morgan reiterates the importance of understanding what buyers of your products and services really value. The newspapers tell us today that the recession is subsiding, and that we are fighting back to economic recovery. Times have been hard for businesses and for individuals, and everyone has felt the need to tighten their belts. We find ourselves watching the bank balance, cutting costs, and curbing spending; frugality is in and excess is out (for now at least!). This, in turn, can impact on the pricing strategy adopted by many companies, as some consumers change behaviours of past times; buying less, buying differently, reappraising the value of their purchases. This pattern then impacts down the supply chain, affecting both B2B and B2C companies. Price has always been a subject of much debate; how to do it, how to value products, competitive pressure, product lifecycle, buyer behaviours, customer loyalty, etc, etc. However, the key element of price is in the value of the product and/or service to the customer, and strategies have to reflect this. Market segmentation enables companies to better serve the market, developing and marketing products which resound more closely with the intended customer base. Most needs based segmentations will reveal a price driven segment; one where, above all, the price is the major decision making driver. Interestingly, it is usually a much smaller segment than people suppose. Of course, price always has a role in decision making, and it is important to establish how and where it is positioned for our customers and potential customers. I see several typologies for price positioning, based on the relationship between price and perceived value. These four, in particular, are common and easily recognisable…
The question now is whether or not the global frugality has made us all more price conscious than we were previously. Thus, the way in which the price and the product are valued needs to be understood in depth in order to accurately evaluate the position of price in the mind of our target customers. This is especially the case for B2B companies where the value of an order or longer-term supply relationship can be critical to business survival. What makes B2B marketing different?Tuesday, August 4th, 2009
Is business-to-business marketing really that different from business-to-consumer marketing? As business-to-business market research specialists, managing hundreds of b2b projects every year, we certainly think so. Our latest white paper, ‘Why is business-to-business marketing special?’, recognises the many differences between the business and consumer disciplines, highlighting the implications of these differences when it comes to implementing a business-to-business marketing strategy. B2b marketing is about meeting the needs of other businesses, though ultimately the demand for the products made by these businesses is likely to be driven by consumers. When acting as consumers, we are often less well-informed, less accountable to others and far more susceptible to whims, indulgences, recklessness and showing off than is the case when we are in the workplace. We therefore have a tendency to make purchasing decisions that a rational observer (a business-to-business buyer that has to make a profit each month) would regard as ludicrous. As consumers we are far less likely to ask whether the product we are buying has an ROI. We buy what we want, not what we need. Not so in b2b. B2b marketing is actually more unique than most people realise; our white paper highlights ten key factors that make b2b markets special and different from consumer markets. To summarise:
The full white paper, which expands on each of the above points and highlights their implications for the business-to-business marketer, can be accessed here. Beyond BeliefFriday, April 17th, 2009
In today’s Thursday Night Insight, Emma Flood considers the importance of understanding our customers and markets today. I read with interest a story this Easter weekend on the BBC news website regarding British people’s belief in Heaven and life after death. The study, conducted by Theos, the Theology thinktank, included the views of 2,060 respondents based in the UK, and revealed some enlightening insight. The study found that 55% of adults in the UK believe in Heaven, while 53% believe in life after death. Furthermore, 39% said they believed in ghosts. These are interesting findings alone, although when they are examined within a timeframe, the findings are more striking. In 1998 MORI carried out a poll which revealed a similar result, with 40% agreeing they believed in ghosts. But compare this to fifty years prior, and the results are starkly different. In a 1951 poll by Gallup, only 10% of the population claimed to believe in ghosts. So the author of the article concludes that over the course of sixty years, the belief amongst the UK population in ghosts has risen markedly from 10% in 1951 to 39% today. There are two ways we could look at this – either in accordance with the view from Theos Director Paul Woolley, that "The enlightenment optimism in the ability of science and reason to explain everything ended decades ago” – that the British public has opened their mind to considering what was previously thought unbelievable by the majority, and that society’s perception of the supernatural has dramatically changed over time. Or we could look at these results with scepticism and argue that the panel of respondents would likely be remarkably different in 1951 compared to the likely demographics of that panel today. One could argue that the composition of the panel in 1951 might well have been made up more so of the white middle aged and middle classes, whilst today’s sample is likely to be representative of today’s UK population, which would factor in the demographic shifts in ethnicity and could perhaps including a broader age range of respondents. Could these demographic shifts be the reason for the marked increase in belief? Whichever way we choose to look at the results, whether we feel there is a sample inconsistency between the panels of respondents, or if we choose to believe the results at face value, which indicate a dramatic shift in perceptions, it brings forward two valid points. The first point is recognising the importance of the sampling method for any piece of research, and how if you might repeat the research in the future, you may choose to keep this consistent over time, to compare results directly. The second point is that along with demographics of a population, opinions, needs and behaviour will change over time, illustrating the importance of revisiting your panel for an up-to-date set of data. In considering these points, it is worth looking intrinsically at our own organisations, perhaps asking the questions: How well do I know my customers today? Who are my customers today, and am I meeting their needs? Who are my competitors today, and what advantage do they have? What is my position in the market today, and how can I capitalise on that, or re-position in a more profitable segment of the market? It is also worth considering here the importance of understanding our customers, and striving in an increasingly competitive marketplace to meet their needs and retain their business. It is much easier (and more cost effective) to retain existing customers than it is to attract new customers, which illustrates the importance of understanding their needs and ensuring your offering is more attractive than your competitors. To read more about B2B International’s experience in the areas of customer satisfaction, positioning and segmentation, and how we could help your organisation today, follow the links below: Using Market Research For Product DevelopmentWednesday, March 18th, 2009
A new B2B International white paper – Using Market Research For Product Development – is now available online. In it, Julia Cupman assesses the importance of product development to a company’s growth prospects, focusing in particular on the vital role(s) that market research plays throughout all the different stages of the product life cycle, from initial concept through to product maturity. Product development research serves a host of purposes, such as establishing (unmet) needs, estimating likely demand, setting prices, shaping the specification of the product or determining optimal price points, to give but a few examples. Of course, product development research does not just examine the product alone; packaging, advertising, pricing, service, brand and company reputation are some of the other factors which together make up the complete customer value proposition. Indeed, improvements to packaging, delivery, or any aspect of service support could have just as big an impact as improvements to the physical product itself. Whether establishing potential opportunities for brand new products or trying to breathe life into a former favorite seemingly on its last legs, market research provides insight into the needs of the market, and reduces the risk associated with any form of product development. To read the white paper in full, please click here For further details on B2B International’s product development research services, please click here « Previous Entries Next Entries » |
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