You go on Facebook, you buy social advertising. And you can very cost-effectively target people who are in the market for your product from all over the world.
… or owning your own home – or a bigger home – or maybe it’s raising your kids to be productive members of society? Whatever comes to mind, I’m willing to bet that more of you could explain what the fruit of success looks like than could explain what it takes to get there. And even if you know what it might take, you may not have put a great deal of thought into how to make it happen.
Success doesn’t just happen. Success, whatever your definition, is typically the culmination of a lot of hard work. (The “fruit of your labor”, as they say). Hard work that is made somewhat easier when there is a plan. If you define success as having one million dollars in your bank account, that goal will be easier (note, not “easy”) if you live your life within a budget and have a plan to save money as you make it. Similarly, other measures of success are more easily accomplished if there is a relevant plan and strategy to accomplish your objective.
Within Marketing Workshop, the Marketing Sciences practice defines success (as stated in our team’s vision) by, “…inform(ing) our clients’ decision-making process by providing both deep and broad insights. These insights synergize with our clients’ current knowledge and beliefs about their business, leading to more profitable, successful tactics and strategies.” In other (and fewer) words, if our client’s are getting smarter and making better, more profitable decisions, then we are successful. The question then is how do we make that happen?
We have adopted what is called the IMPACT framework1 as a process that we feel will help us stay on task in the areas that make our team successful. While it is still somewhat of a work in progress, as we shape and mold the framework into our custom application of it, we thought that our inaugural newsletter would be a great time to “take it public”, if you will.
Analytically there are many ways to develop a Segmentation framework. The most basic of which would be based on something that could just be observed or determined a priori, without any real analysis at all, such as age and gender combinations (or other demographics). A more common approach, however, is somewhat more rigorous. Cluster Analysis techniques (i.e. k-means or hierarchical clustering) place people into groups based on their patterns of answers to specific questions or a similarity of behaviors. Those whose responses are very similar to one another are placed into the same group. Segmentation Analysis is as much art as science, often requiring multiple iterations to reach the solution the best meets the criteria above (differentiable, accessible and actionable.)
Once a Segmentation framework is adopted by an organization, it often becomes ingrained as part of the marketing “culture” and thus included in any future research studies. Any subsequent study can include a subset of questions (based on an algorithm developed using Discriminant Analysis, as part of the initial Segmentation study) that will classify each respondent into the segments of interest, or targets. This is particularly helpful when a client wants to test the attractiveness of a product (advertisement, service offering, etc.) to their targeted consumers.
Given the strategic nature of Market Segmentation studies, they can be extremely valuable to an organization, often resulting in longer term relationships between the client and the research provider. It is for these and other reasons that Market Segmentation development and application fits so well within our ResearchWISE® framework.
~ Marketing Workshop