Know-How Exchange : Student Questions

Hi ischoemaker,

I understand where you are coming from; and you can indeed make an initial start segmenting customers by industry, size, location (for companies) and income,age, gender, ... (for consumers). It is relatively easy to get hard data on these factors, and they enable you to target your marketing actions. However, as stated by my colleagues before, many marketers have experienced that these 'demographics' or 'firmographics' are not enough: two firms in the same industry, of the same size and same location, may differ substantially in product needs, usage, buying behavior, and reaction to your marketing actions (just like you will differ from someone your same age and gender). Therefore, marketers have taken the time and money to learn about purchasing approaches and behavior factors (eg technology savyness, user status, risk attitudes, usage rate and occasions, and buyer readiness stages). In my marketing course, I actually teach the opposite of what you suggest: I maintain it is worthwhile to first get a deep understanding of these behavorial factors, understand how/why customers differ (this ensures your segments are meaningfully different and require targeted marketing actions), and then look for demographic factors that highly correlate with these behavioral factors, so that you can efficiently target the right segments.
Feel free to disagree: i would love to get comments on whether the above procedure is feasible in this time of urgency and limited marketing research budgets !