Market Segmentation

Mass marketing may be dead, but directly marketing to each unique consumer is not for everyone either. Understanding the consumers in your category in terms of unique segments allows you to use your marketing resources more effectively. But first you need to understand those segments. How many are there? How large are they? How are they alike? How are they different? Which ones are the best fit with your products and competitive position?

Action Marketing Research is an experienced provider of segmentation research and analysis. We can help you, as we have helped many clients. The secret is that there is no secret! There is no one right way to do segmentation. Our role is to work with you in understanding what you are going to do with the segmentation--and only then develop a research strategy.

We also offer a very new service called archetypal analysis which provides another way of understanding consumer heterogeneity.

Five Questions

Any serious segmentation analysis must answer these five questions.

1. How many segments are there?
2. How large is each segment?
3. How do the characteristics of the consumers (organizations, etc.) which belong to each of the segments differ?
4. How does the relevant behavior of the segments differ?
5. How do the attitudes, values, beliefs and needs of the segments differ?

Typically, a decision must be made to define segments on the basis of characteristics (e.g. company size), behavior (e.g. frequency of purchasing), or attitudes (e.g. clusters of desired benefits). This decision can be done using management judgment or through involved statistical procedures. The correct basis for segmentation is the one which will be of most value to the company.

Good segmentation research means better decisions about:

• The types of customer to target
• How to communicate with your target segments
• Which products you need to develop and where to aim them
• Pricing

There is no end to the possibilities (at least 50 ways).