Segmenting the marketing properly is an important step in marketing. But then we need to describe the customers in the various segments.
Describing customers is important for various reasons. First, we may want to target the segment but more precisely target one or more descriptors in that segment. Thus, we may be able to still play in a segment but do so by targeting a smaller niche. Second, descriptors are extraordinarily useful for all of the marketing tactics that must be used to reach a target segment. For example, knowing where a segment shops is useful for setting distribution channels. Understanding a customer's knowledge set will be useful to setting communication objectives. Thus, the more richly we are able to profile the customers in the various segments, the easier it will be to set marketing tactics later on.
So what kinds of descriptors do we need? These might fall into four main categories and differ to some extent depending on whether we are segmenting consumers or businesses.
Beginning with consumers, we might first think in terms of basic characteristics such as demographics (age, income, occupation, education, etc.) and family stage (kids, ages, etc.). We could also describe them by their psychographics that includes values, personality and lifestyle variables.
One well-known way to think about these psychographics is with a tool known as VALS (Values and Lifestyle Survey), conducted by a company called SRI. You can read up on this subject if you wish (a good article, "Markets with Attitude," appears in American Demographics magazine, July 1994, pp. 22-33 by Judith Waldrop). Here is where you will find such groups as the "strivers" (image conscious, spend money on clothing and personal-care products, etc.), "believers" (buy American, slow to change habits, look for bargains, etc.), and the "fulfilled" (little interest in image or prestige, likes educational and public affairs programs, etc.). I should note that sometimes these descriptors might actually segment a market (Suzuki is an example), but more often they serve as descriptors of the people in a segment.
With businesses, such characteristics are typically associated with size, industry sector, or end-equipment. Thus, a company selling a component to another company may describe a segment by the equipment the customer is using the component for. Stage of a company can also be a basic descriptor, such as whether it is a startup or mature company.
Another class of descriptors for the segment falls under the heading of decision making, specifically what kind of decision is the customer making. While seemingly simple, in fact, describing how customers make decisions is terribly complicated. Consider that you might want to know how, why, when, where, how much, how often they buy a product and also how long they take to make decisions.
Furthermore, the level of involvement the customer has in the decision can also describe customer decision-making. Involvement means the extent to which the customer perceives risk (economic, performance, social, psychological, time, physical) in the decision making context. Thus, a customer may be highly involved in buying a car, but far less involved in buying a can of soda. If you think about it, knowing how involved a customer is has profound implications. Why? Because the viability of so many tactics used to market to customers (e.g., how much they recognize a need for the product, their search process, how conscientiously they evaluate alternatives) depends on their level of involvement.
The final broad area of segment descriptors concerns how customers in the segment are influenced. This includes an understanding of their reference group (think family, friends, or a social class). But it also includes an understanding of what sources of information influences them. This could include mass media (such as advertising, newspapers, and TV) or personal influences such as family and friends or even personal selling.
Understanding and profiling customers in the segments is difficult to be sure. But this is what provides us with guidance throughout the remainder of the marketing process.
Enter your email address to keep reading ...
You may like these other MarketingProfs articles related to Segmentation:
- Market Segmentation: Where Companies Go Wrong and Why You Need Differential Advantage Analysis
- Switching From Product-Centricity to Customer-Centricity With Personas
- How to Conduct Effective Audience Analysis in Six Steps
- Six Key Criteria for Market Segmentation [Infographic]
- Smoking Brisket and the Customer Experience: Art and Science With Christian Selchau-Hansen on Marketing Smarts [Podcast]
- Target-Audience Segmentation: Why You Need It and How to Do It in Five Easy Steps