Marketing Value Metrics: Top ten classic novel recommendations by Collins Floyd

Author:Collins, Floyd [Collins, Floyd]
Language: eng
Format: epub
Published: 2020-10-26T16:00:00+00:00

segmentation – the Basic Building Block for Markets 155

Table 6.4 Segment profiles

Example: investment products market

Important drivers

Segment 1

Segment 2

Segment need

Generate income

Generate wealth

Who buys?

Empty­nesters, married,

Age: 25–45, families,

aged over 55, AB social class

AB social class

What do they buy?

Income generation

Education fees plans;

products

pension plans

Why do they buy and

Retirement

Presence of young

when (time/occasion)

children

How do they buy?

Buy through

Buy direct (internet/press

intermediaries

advertisements)

How do they use?

Passive

Active portfolio management

Total value/volume

£

£

No. in the segment

No. in the segment

Segment as proportion 20%

30%

of total market

Segment title

Affluent greys

Aspiring families

Table 6.5 Segment metrics: needs/wants/attributes template Segment title: Affluent greys

Need/want

Metric

Measurement method

Generate income

Income generated by

Market research

products in sector

(perceptions);

analysis of product field

Queries answered

% of queries

Benchmark customer

at first enquiry

satisfaction research;

mystery shopping

Attributes

What do they buy

Types of products

Market research/

industry stats

Frequency of purchase

No. of purchases per year

Market research

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Marketing Value Metrics

Table 6.6 Segment performance metrics: ‘us’ versus key competitor(s) template

Segment title ..............................

Performance Metric

Measurement

Us

Competitor Competitor

method

1

2

Market share

%

Market research

Share of wallet £ & %

Market research

Sales revenue

Value of

£

Modelled from

customer

(margin?) market research;

market intelligence

Gross margin

Awareness

Share of voice

Retention

Score

Market research;

internal stats

Take­up of

new products

6.6.4 Segmentation ground rules

Members of the Measurement and Marketing Accountability Forum at Cranfield University identified a set of ground rules that they considered assisted the development of a segmentation strategy. These were divided into two parts: firstly, those that will help gain commitment to the concept of segmentation; secondly, points that will help the development and implementation process.

6.6.4.1 Gaining and maintaining commitment

● Gaining the commitment of top management is crucial, for example to provide reasons why a seemingly profitable business opportunity is not being pursued.

● Ensure that those expected to work with the segmentation fully understand what it is and what implementation entails.

segmentation – the Basic Building Block for Markets 157

● Does it match existing business rules, or will new ones be needed?

● Ensure that the implications for resources are fully considered.

● Start with a simple model, perhaps based on estimated data, to gain experience and commitment.

● Cost and revenue profiles can provide a starting point in gaining commitment to the principles.

● Don’t underestimate the feasibility, or how long the process might take.

● Manage expectations, especially the payback period.

● Developing personality profiles for the segments helps bring them alive and helps the communication of the key differences.

6.6.4.2 Development and implementation

● Ensure there is a clear rationale and objectives (that are SMART1).

● Different segmentation models may be needed to achieve different goals.

● Use can dictate methodology/criteria. For example, segmenting the market with an emphasis on billing requirements may be different from a segmentation aimed at identifying the best new prospective customers.

● Behaviour and attitudes can produce different outcomes in terms of segmenting customers.

● Take into account the maturity of the overall market.

● Strategies based on a segmentation may lead to future behaviour that moves customers from one segment to another.

● The ability to deal with complexity may lead to competitive advantage.

● Ensure that the segmentation strategy doesn’t create conflict with other, high-performing strategies.

● Data availability is a vital consideration.

● Ensure that the organization has the flexibility to face the market in a different way from that of pre-segmentation.

note

1 SMART: Specific, Measurable, Achievable, Results-orientated, Time-bound

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Marketing Value Metrics

References

Ansoff, H I (1957) Strategies for Diversification, Harvard

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