Simplification is at the core of any segmentation exercise because people, purchase occasions, consumption occasions, businesses, employees (or whatever it might be) aren’t all the same. They all respond differently to elements of the marketing mix. Treating people as if they were the same makes no commercial sense, and treating everyone differently is inefficient, if not impossible.
Where segmentations can often go wrong
Sometimes segmentations fail and there are many reasons why. Some are too all-encompassing. Others clash with senior stakeholders’ deeply held beliefs. Some are statistically fantastic but pull the market apart in all the wrong places.
Others don’t make the grade because research consultancies, client-side researchers and end users are used to seeing the market divided up into a small number of segments that cannot hope to offer any real clarity, targeting potential or sizing accuracy.
It’s almost trivial to say that the fewer segments you create, the muddier they are. But real problems kick in when time and money are spent on conveying the essence of a segment that only represents a stereotype. It’s clear this has happened when, with closer examination, most members of the segment don’t look how you might expect – a segment of ‘Innovation Seekers’, for example, where a third claims to be resistant to change.
Sometimes this happens because you’re trying to squeeze the market into five or six segments to avoid overwhelming the people who need to use them. This is an understandable strategy, but the consequence is that many individuals in any given segment don’t really…