Smart segmentation

Market segmentation

Marketers got a bad rap in recent years after the Gruen Transfer and Super Size Me. What started as finding what people want has became known for the old fashioned advertising we more publicly see. But there is a lot more to marketing than that.

Marketing went through phases in the past couple of centuries. Mass advertising 'pushed' products at the general public around the 50s. It assumed, for example, that every household wanted the same appliances. Then marketers in the past few decades realised consumers were becoming more discerning. Consumers, or people like you and me, wanted more variety. As competition between companies grew, each brand had to differentiate by appealing to different people's needs. This became known as targeting a segment (or group) of the market.

Segmentation of the market is not an evil scheme to con us into buying things we don't want. It tries to tailor offerings to what we do want. There are four ways this is done. Geographic, demographic, psychographic, and behavioural market segments are very logical groups of people with preferences. There are benefits to targeting each one.

Geographic segments are almost self explanatory. Many messages or products are more relevant to one location than another. Local council elections are targeted marketing messages. There is no point for a local candidate to do a full strength advertising campaign in all areas of Australia when votes will only count in one area. The same logic is used at the movie cinemas as some ads such as restaurants will be locally tailored. We don't need to know what restaurants there are on the other side of Sydney when we just want somewhere to eat dinner after the show. It's as simple as targeting geographic segments which actually find your product or service relevant.

Then demographic targeted market segments further narrow the relevance. It is quite obvious people are different everywhere , even within geographic areas. Aussies may have stereotypes. QLD and NSW may have certain views about each other. Council areas may be known for something (beaches, spacious land, etc). But demographic segmentation is important because of obvious differences in what people want because of age, gender, etc. All you have to do is look at the news stand to remember 23 year old girls will read very different magazines (Cleo) to 12 year old boys (K Zone). Marketers tailor different messages to these different crowds not to be mean or deceptive, but to stay relevant to different demographic groups such as age and gender segments.

Then various groups of people may have behavioural activities in common - this forms a new target market segment. We only want to hear about an activity we actually want to do. You can send me all the papers you like about fishing - it's not going to get me to the bait store. Weight Watchers magazines are strategically placed in some discount department stores, just inches from the chocolate bars (oh the irony). There are many other products which are not deceptively designed for us, just informing us about things we actually do.

Finally psychographic targeted market segments sound fancy but are easy. These groups might, for example, share the same values. This is commonly identified by Roy Morgan. Our values may be aspirational, and manifested in visual expressions of success. Aspirationals may grow up to watch every episode of The Apprentice. Others value family life more than a career - so Better Homes and Gardens or Packed to the Rafters might be mor their cup of tea. Whatever the value segment, it is not a trick. Programs and products just need to be something of importance to us. Everyone is different, not wrong.

This is why the logic behind messages in marketing communications are not a lie. They are only targeted as a best guess as to what we really want.

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