What's Next for Segmentation
Are market research classifications keeping pace with changes in consumers?
18th January, 2012
This month in ‘Segmentation and Modelling’ we have two articles which show very different approaches taken by analysts to identifying discrete groups in the population for the purpose of marketing. The article which describes how ACORN classification provider CACI keeps its local knowledge up to date is a fine example of a priori segmenting, whilst Laura Morris’s outline of the potential pitfalls of segmentation uses a more attitudinal and inclusive approach. Both methods are important tools available to the researcher who wants to produce segments into which his client’s customers fall. It is also something of a hot topic: at www.warc.com a search for catalogued articles, research papers and case studies using the keyword 'segmentation' produces more 2011 results than any other keyword except 'social media'. However, no matter how useful researchers find pigeonholing respondents, in today's 'no such thing as representative' social media environment do we still want to segment; and if so do the old rules still apply?
Firstly, let’s take a look at what constitutes a ‘segment’. Wikipedia (let's welcome it back after its day off) says of a segment: it is distinct from other segments (different segments have different needs); it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus; and it can be reached by a market intervention.
My issue with the first two conditions is can we make consumers fit into only one segment now? Huge generalizations surely don’t work especially in groups with only one differentiator such as Generation Jones (born between ’55 and ‘67) but neither do they work where there are several, like Yuppie (young,urban,professional). Calling someone a Millennial means exactly what for your marketing strategy? Surely, no matter how niche the segment, there is still a possibility that an individual (or 10,000) will fit into more than one – or none. I know quite a few ‘in-charge intellectuals’ who are also ‘mums and chips’. As for items three and four, I think Mark Earls has dealt conclusively with the ways in which most of us respond to market stimulation (en masse) and how we can all be reached (en masse) by a market intervention.
Secondly, if a segment does exist, for how long is it good? Trending topics on Twitter, instant news, pop up stores and posts on Facebook can change buying decisions in an instant. If we decide on behalf of our client to target a particular segment, can we rely on it existing this time tomorrow?
Perhaps the key to keeping this useful methodology cutting edge is constant updating and refining as advocated in our two new articles. To make up your own mind do read the articles by Laura and John.
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