Market Segmentation E-Book

Malcolm McDonald

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 785

Veröffentlichungsjahr: 2012

Beschreibung

Market Segmentation: How to do it and how to profit from it, revised and updated 4th Edition is the only book that spells out a totally dispassionate, systematic process for arriving at genuine, needs-based segments that can enable organizations to escape from the dreay, miserable, downward pricing spiral which results from getting market segmentation wrong.

Nothing in business works unless markets are correctly defined, mapped, quantified and segmented. Why else have hundreds of billions of dollars been wasted on excellent initiatives such as TQM, BPR, Balanced Scorecards, Six Sigma, Knolwedge Management, Innovation, Relationship Marketing and, latterly, CRM? The answer, of course, is because of a structured approach to market segmentation.

Market Segmentation: How to do it and how to profit from it, revised and updated 4th Edition provides a structured, no-nonsense approach to getting market segmentation right. It is an essential text for professionals and students based on a wealth of practical experience and packed with examples and easily used checklists.

Leseprobe

Contents

Foreword

Preface and acknowledgements

An important note to the reader from the authors

List of figures

List of tables

Chapter 1: Market segmentation – the bedrock of successful marketing

Perception is everything

The state of marketing

The central role of market segmentation

Segmentation process summary

Marketing objectives and strategies

Chapter 1 review

References

Chapter 2: Preparing for segmentation – additional guidelines for success

Objective of this book

Segmentation archetypes in companies

Classifying market segmentation in organizations

Organizational structure

The ‘postmodern’ customer

International market segmentation

Segmentation team

Data for segmentation

Rules for segmentation

The advantages of segmentation

Segmentation case histories

Chapter 2 review

References

Chapter 3: Fast tracking through the segmentation process

Process structure

Phase 1 – Developing segments

Phase 2 – Prioritizing and selecting segments

Chapter 3 review

Chapter 4: Determining the scope of a segmentation project

Geographic scope

Defining markets

Sizing the specified market

Process check

Further examples

Exercises

Reference

Chapter 5: Portraying how a market works and identifying decision-makers

Constructing your market map

Market leverage points

Selecting the junction to be segmented

Testing current views about segments: preliminary segments

Process check

Further examples

Exercises

Chapter 6: Developing a representative sample of different decision-makers

The components of a ‘micro-segment’

Developing micro-segments

Key discriminating features (KDFs)

Profiling and ensuring it is practical

Process check

Further examples

A selection of standard approaches to profiling businesses

A selection of standard approaches to profiling individuals

Multidimensional

Exercises

Chapter 7: Accounting for the behaviour of decision-makers

Explaining customer behaviour

Micro-segments and their decisive buying criteria (DBCs)

Benefit analysis – essential input to successful marketing

Techniques for uncovering unsatisfied needs

Addendum for those intending to test the validity of a current structure of strategic business units (SBUs)

Process check

Further examples

Exercises

References

Chapter 8: Forming market segments out of like-minded decision-makers

The components of a market segment

Building micro-segments into market segments – clustering

Segment checklist

Process check

Further examples

Exercises

References

Chapter 9: Determining the attractiveness of market segments

Portfolio analysis

Segment attractiveness

Plotting the position of segments on the portfolio matrix

Process check

Examples

Exercises

References

Chapter 10: Assessing company competitiveness and the portfolio matrix

Company competitiveness

Producing the portfolio matrix

The directional policy matrix

Process check

Examples

Exercises

Chapter 11: Realizing the full potential of market mapping

Enhancing the information on your market map

Chapter 11 review

Examples

Chapter 12: Predicting channel transformation

Multichannel strategy formulation

Future market mapping: analysing industry structure

Multichannel integration: channel chains

Channel choice: the channel value curve

The prioritization matrix: defining channel strategy

Determining channel tactics

Chapter 12 review

Exercises

References

Chapter 13: Setting marketing objectives and strategies for identified segments

Marketing objectives: what they are and how they relate to corporate objectives

How to set marketing objectives

Competitive strategies

Where to start – gap analysis

New product development

Marketing strategies

Marketing in a downturn

Marketing objectives, strategies and profitability – valuing key market segments

Chapter 13 review

Exercises

References

Chapter 14: Organizational issues in market segmentation

Segmentation as a company exercise

Successful implementation of segmented marketing

Bringing segments to life

Chapter 14 review

Reference

Chapter 15: Using segmentation to improve performance – a case study

GlobalTech

Index

© 2012 John Wiley & Sons

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Library of Congress Cataloging-in-Publication Data

McDonald, Malcolm.

Market segmentation : how to do it and how to profit from it / Malcolm McDonald and Ian Dunbar. – rev 4th ed.

p. cm.

Includes index.

ISBN 978-1-118-43267-9 (pbk.)

1. Market segmentation. I. Dunbar, Ian, 1951- II. Title.

HF5415.127.M398 2013

658.8′02–dc23

2012023996

A catalogue record for this book is available from the British Library.

ISBN 978-1-118-43267-9 (paperback), ISBN 978-1-118-43274-7 (ebk)

ISBN 978-1-118-43275-4 (ebk), ISBN 978-1-118-43273-0 (ebk)

Foreword

In 2004, Lord Marshall of Knightsbridge provided the foreword below, which we have retained without amendment, as it encapsulates the spirit and substance of this, our latest 2012 edition of Market Segmentation.

One of the abiding principles of sound business practice is: ‘Know your customer; know your market.’

The objective, of course, is to gain competitive advantage by building sustained customer loyalty, with products and services meeting, quite precisely, the demands of closely defined markets.

As markets have become more complex, so has this essentially basic process of market segmentation. It is the view of many that, in both the manufacturing and service sectors, the art of defining target markets rarely progresses beyond the assembly of somewhat dull demographics. The logical conclusion is that, if everybody is doing the same, differential advantage is difficult to attain.

Now, Professor Malcolm McDonald and Ian Dunbar have peeled away the layers of complexity and confusion to produce a step-by-step guide through the difficult terrain of market segmentation. The value of their book to business people everywhere, is that it offers the kind of practical applications needed in today’s intensely competitive marketplace.

Lord Marshall of Knightsbridge1

Chairman, British Airways

1Lord Marshall of Knightsbridge, businessman and airline executive, was born on 6 November 1933 and died on 5 July 2012.

Preface and acknowledgements

This book has its origins in a painstaking process of research into the practical difficulties that organizations experience in segmenting their markets, research which we initiated in 1992. We discovered that most of the academic work in this domain is prescriptive, with virtually no pragmatic guidelines provided to enable managers to make sense of the confusing array of data and information available to them.

So we developed a process, which we worked through with some of the best known companies in the world, amending the process until it was sufficiently robust to share with a wider audience. The result was the first edition of this book which was launched in 1995.

Since its launch, the extensive adoption of our market segmentation process by companies ranging from world leaders in their fields to smaller domestic companies has continued to broaden our knowledge base substantially. These insights have enabled us to refine the process, improve the guidelines for its implementation, identify where more detailed explanation is required and, at the same time, develop a quick route through the process for readers looking for a summary of how to implement each step.

The third edition of this book published in 2004 not only built on the improvements introduced into the second edition (1998) with respect to the segmentation process, supporting examples, worked-through case study and worksheets, but also introduced new practical approaches to its implementation, exercises to help with learning and a ‘Fast track’ for each step in the process.

With further experience of working with companies around the world on their segmentation projects we have been able to identify a number of additional enhancements to our segmentation process. These advances to its practical implementation are all incorporated into this, the revised fourth edition of the book. This latest edition also contains essential updates and has brought together the ‘Fast tracks’ into a single chapter. This new chapter, ‘Fast tracking through the segmentation process’, provides a concise guide for new readers as to what the segmentation process entails, and provides those readers conversant with the approach we take to market segmentation with all the memory prompts required for a segmentation project.

Our presentation of the process in this book enables the segmentation practitioner to follow each step manually, utilizing data already held by, or readily accessible to, the company. An important point we would therefore like to stress about this book is that it is most definitely a practical book which, if used properly, will result in actionable market segments. To achieve this result will require time and resources. It is not a book just for reading. It is for reading and doing, and is best used by a team, rather than an individual.

Finally, to name everyone who should appear in this acknowledgements section is impossible, because so many clients we have had the privilege of working with and the many colleagues who have been interested in our work have influenced our education, thinking and practical development of the process presented here over the years until it became ‘watertight’. One particular colleague we would like to mention, however, is Professor Hugh Wilson, whose work in ‘e-marketing’ has enhanced our understanding of the issues to be addressed by market segmentation in this modern, electronic, fast-changing world.

We both wish you a happy and profitable segmentation.

Malcolm McDonald and Ian Dunbar

www.marketsegmentation.co.uk

e-mail [email protected]

tel. [phone]

An important note to the reader from the authors

1

Successful segmentation is the product of a detailed understanding of your market and will therefore take time.

2

Segmentation is appropriate for those markets where it is essential to combine individual customers or consumers into larger buying ‘units’ to ensure your marketing activity is both cost effective and manageable.

3

The process as presented in this book is aimed primarily at defining segments in terms of the particular marketing mix each requires. Segmentation at higher levels is, of course, possible and many of the principles contained in this book would apply, although in a less detailed form.

For those who need a quick route through the segmentation process, ‘Fast tracks’ have been put together for each of the steps in the process and can be found in Chapter 3. Be careful however:

A little learning is a dangerous thing. Drink deep, or taste not the Pierian Spring.

Alexander Pope

Refer to the appropriate chapter whenever this is required to complete a particular step in the process successfully.

Deciding on which track you need

It is important that you complete the following questionnaire before you decide on which track you need.

Are you getting these essential deliverables from your market segmentation?

Score out of 100 = not at all10 = totally

Market structure and segmentation

Q1

Is there a clear and unambiguous definition of the market you are interested in serving, with the definition based on a specific purpose or intended use, not on a product or service?

[ ]

Q2

Is the market clearly mapped, showing product/service flows, volumes/values in total, where decisions are made and the quantities they account for?

[ ]

Q3

Are the segments clearly described and sized? These must be groups of customers with the same, or comparable, set of needs, not demographics or sectors.

[ ]

Q4

Are the real needs of these segments properly quantified, with the relative importance of these needs clearly identified?

[ ]

Q5

Are the segments clearly linked to a set of characteristics that identify the customers found within them?

[ ]

Target segments

Q6

Are all the segments classified according to their relative attractiveness to the company over the next three years based on clear, unambiguous criteria?

[ ]

Q7

Is there a clear and quantified analysis of how well your company satisfies the needs of these segments compared to competitors, as perceived by the customers found within them?

[ ]

Segment-based marketing

Q8

Are your marketing objectives set by segment and consistent with their position in the portfolio?

[ ]

Q9

Are the strategies for these segments (including products, price, promotion, place and services) consistent with these objectives?

[ ]

Q10

Is there a structure, information and decision-making system which enables you to serve these segments effectively?

[ ]

Total score

[ ]

Interpretation

In our experience, not many readers are able to score above five on many of these questions. This is not the point, however. The purpose of the questionnaire is to focus your attention at the beginning of the book on what essential deliverables market segmentation should produce. You can then determine the extent to which you need to focus on the detailed contents of this book.

If you work carefully through this book and implement it in your organization, you will be able to give yourself high scores in all boxes. Then, you will be a truly market-focused organization!

Malcolm McDonald and Ian Dunbar

List of figures

1.1

The marketing domain

1.2

Summary of the marketing process

1.3

Define markets and segments, and understand value

1.4

The segmentation process: Phase 1 – developing segments

1.5

The segmentation process: Phase 2 – prioritizing and selecting segments

2.1

The building blocks of effective marketing planning

2.2

Segmentation archetypes in companies

2.3

Organizational structure of Northern Sealants

3.1

The segmentation process – Step 1 (Chapter 4)

3.2

The segmentation process – Step 2 (Chapter 5)

3.3

Fast track – market mapping

3.4

The segmentation process – Step 3 (Chapter 6)

3.5

Fast track – customer groups for developing micro-segments

3.6

The segmentation process – Step 4 (Chapter 7)

3.7

The segmentation process – Step 5 (Chapter 8)

3.8

Fast track – alternative approaches to comparing micro-segments with each other visually

3.9

The segmentation process – Step 6 (Chapter 9)

3.10

Fast track – plotting segments on the portfolio matrix according to their attractiveness

3.11

The segmentation process – Step 7 (Chapter 10)

3.12

Fast track – plotting business positions on the portfolio matrix for each segment according to their relative competitive strength

4.1

The segmentation process – Step 1

4.2

The relationship between market share and return on investment (ROI)

4.3

Developing insights into both consumers and intermediaries

4.4

The market for floor covering

4.5

Market definition for Exercise 4.1

5.1

The segmentation process – Step 2

5.2

Starting a market map and adding the routes between the transaction stages

5.3

Starting a market map – alternative layouts

5.4

Market map with contractor

5.5

Market map with final users ‘hidden’ from the suppliers

5.6

Market map with influencers

5.7

Market map with field sales identified separately

5.8

Initial quantification of a market map – percentages

5.9

Initial quantification of a market map – figures

5.10

Market map listing the different junction types

5.11

Quantities split between junction types

5.12

Market leverage points on a market map

5.13

Shared market leverage points on a market map

5.14

Selecting the junction to be segmented

5.15

Quantities decided on split between junction types

5.16

Market map for commercial crop nutrients

5.17

The segmentation process – Steps 1 and 2

5.18

Market map example – internal wall covering

5.19

Market map example – acquiring knowledge (books and support materials)

5.20

Market map example – specialized technical equipment

5.21

Worksheet – market map

6.1

The segmentation process – Step 3

6.2

Customer groups for developing micro-segments

6.3

What is a product?

6.4

Sizing micro-segments in the case study

6.5

The segmentation process – Steps 1 to 3

7.1

The segmentation process – Step 4

7.2

Bipolar map for detergents

7.3

Opportunity gap in the 1960s market for cars

7.4

Opportunity gap for photocopiers in 1972

7.5

Extracts of a ‘needs cascade’ for the ‘relief of pain and inflammation’

7.6

A perceptual map of the market for soap

7.7

Perceptual map of the market for tabloid newspapers (1993)

7.8

The segmentation process – Steps 1 to 4

8.1

The segmentation process – Step 5

8.2

The general relationship between resource inflexibility/technical limitations and viable segment size

8.3

Comparing micro-segments with each other visually

8.4

Comparing micro-segments with each other visually using a spider-gram

8.5

Comparing micro-segments with each other visually using a bar chart

8.6

Comparing clusters using a two-dimensional map

8.7

Before and after clustering for the case study

8.8

The volume attributed to each segment for the case study

8.9

The segmentation process – Steps 1 to 5

9.1

The segmentation process – Step 6

9.2

The Boston Matrix

9.3

The GE/McKinsey Matrix

9.4

The McDonald four-box DPM

9.5

Directional policy matrix for a portfolio of segments

9.6

Measuring segment attractiveness

9.7

Plotting segments on the portfolio matrix according to their attractiveness (Year 3)

9.8

Plotting segments on the portfolio matrix according to their attractiveness at the beginning of the planning period (Year 0)

10.1

The segmentation process – Step 7

10.2

Plotting a relative competitive strength score of 0.86

10.3

Plotting business positions on the portfolio matrix for each segment according to their relative competitive strength

10.4

The initial segment portfolio matrix

10.5

The segment portfolio matrix for the case study

10.6

The directional policy matrix

10.7

Well-balanced portfolio

10.8

Poorly balanced portfolio (1)

10.9

Poorly balanced portfolio (2)

10.10

Portfolio matrix for Exercises 9.1 and 10.1

10.11

Worksheet – portfolio matrix

11.1

Initial quantification of a market map – figures

11.2

Market map in the horizontal format

11.3

Market map with company share and number of units

11.4

Market map with the routes between junction types

11.5

Detailed quantification of a market map

11.6

Market leverage points on a market map

11.7

Detailed quantification of a market map with leverage points

11.8

Detailed market map example – Agrofertilizer Supplies

11.9

Detailed market map example – specialized technical equipment

11.10

Detailed market map example – comparing a company’s routes to market with the routes used by the final users

12.1

A process for multichannel strategy formulation

12.2

Traditional and potential market maps in car retailing and related financing

12.3

Reconfiguring the value map – groceries

12.4

Long-term investment – future market

12.5

Channel chains – the market for PCs in 1995 and 2010

12.6

Channel chains – hotel chain

12.7

Channel chains in tabular form – ‘Sunworshippers’ segment

12.8

Channel chains in tabular form – ‘John and Mary Lively’ segment

12.9

The channel value curve – books example

12.10

The channel value curve – an alternative presentation

12.11

The prioritization matrix

12.12

The prioritization matrix – insurance company

12.13

Worksheet – the prioritization matrix

12.14

The prioritization matrix – locating the points of intersection

13.1

Objectives and strategies in a corporate framework

13.2

The Ansoff Matrix

13.3

Product life cycles within segments

13.4

The Boston Matrix (basic outline)

13.5

Strategies suggested by portfolio matrix analysis

13.6

The importance of market share

13.7

Supply and demand curves

13.8

Cost versus differentiation matrix

13.9

The impact on unit costs of the learning curve

13.10

Cost/benefit matrix

13.11

Gap analysis

13.12

Technological and segment newness

13.13

Profit/division profit improvement options

13.14

Comprehensive list of options for filling the ‘gap’ and suggested measurements

13.15

Gap analysis – plotting the revenue positions for Exercise 13.1

13.16

Worksheet – current and achievable sales revenue of existing products in existing segments

13.17

Worksheet – sales revenue of new products in existing segments

13.18

Worksheet – sales revenue of existing products in new segments

13.19

Gap analysis – plotting the profit positions for Exercise 13.1

13.20

Worksheet – current and achievable profit value of existing products in existing segments

13.21

Worksheet – profit value of new products in existing segments

13.22

Worksheet – profit value of existing products in new segments

14.1

The influence of size and diversity on the need for formalization in marketing

14.2

Bringing segments to life using cartoon characters

15.1

Differences in attitude between segments for three service requirements

15.2

Loyalty to GlobalTech by segment

15.3

Segment attractiveness for GlobalTech

List of tables

2.1

Segments in the market for toothpaste

3.1

Fast track – recording micro-segments and indicating the relative importance of their KDFs

3.2

Fast track – adding profiling characteristics to micro-segments

3.3

Fast track – recording DBCs and indicating their relative importance to micro-segments

3.4

Fast track – segment attractiveness evaluation (Year 3)

3.5

Fast track – competitive strength evaluation (Year 0)

4.1

Defining markets

5.1

Market map with contractor presented in tabular form

5.2

Initial quantification of a market map in tabular form

5.3

Market map example in tabular form – items installed in premises

6.1

Segments in the market for toothpaste

6.2

Recording micro-segments and their KDFs

6.3

Indicating the relative importance of KDFs to micro-segments

6.4

Adding profiling characteristics to micro-segments

6.5

Recording information on what, where, when and how

6.6

Identifying influential features

6.7

Customer profiles for segments in the market for toothpaste

6.8

Feature list for the case study

6.9

Prioritizing feature groups for a preliminary segment in the case study

6.10

A selection of micro-segments and their KDFs for a preliminary segment in the case study

6.11

Eight-class analytic version of the 2001 Socio-economic Classification (UK) and its approximate relationship with other schemes

6.12

Worksheet – making sense of meaningless features

6.13

Worksheet – recording micro-segments, their KDFs, profiling characteristics and size

7.1

Recording DBCs and indicating their relative importance to micro-segments

7.2

A seven-point scale for rating DBCs

7.3

The ‘rating’ approach to signifying a DBC’s importance

7.4

The ‘total sum’ approach to signifying a DBC’s importance

7.5

DBCs and their scores for a selection of micro-segments in the case study

7.6

Worksheet – developing KDFs into benefits

7.7

Worksheet – recording DBCs and their relative importance by micro-segment, along with their link to features (optional)

8.1

Looking for distinct patterns across micro-segments

8.2

Micro-segment details for a clustering routine

8.3

Calculating the difference between micro-segments

8.4

Difference scores for five micro-segments

8.5

Calculating weighted average DBC scores for a cluster

8.6

Clustering update

8.7

Prioritizing DBCs

8.8

Standard formats for comparing clusters

8.9

Segment age profiles in a market

8.10

DBCs and their scores for a selection of micro-segments in the case study

8.11

The concluding segments and their market DBC scores for the case study

8.12

Segment demographics of the historical romance novel market (USA)

8.13

Worksheet – recording clusters/segments, their DBCs, profiling characteristics and size

8.14

Worksheet – calculating the profiling characteristics for a segment

8.15

Worksheet – calculating the KDF details for a segment

8.16

Worksheet – calculating the difference between micro-segments/clusters

8.17

Worksheet – calculating weighted average DBC scores for a cluster

8.18

Worksheet – cluster run record

9.1

Porter’s Five Forces model

9.2

Profit potential sub-factors in the market for pharmaceuticals

9.3

Example weightings of segment size, margin and growth

9.4

Weighting segment attractiveness factors

9.5

Parameters and their scores for the segment attractiveness factors

9.6

Segment attractiveness evaluation (Year 3)

9.7

Segment attractiveness evaluation (Year 0)

9.8

The range of weighted attractiveness scores in a market with nine segments

9.9

Segment details for Exercise 9.1

9.10

Parameters and their scores for the segment attractiveness factors in Exercise 9.1

9.11

Attractiveness factor scores for Segment 1 in Exercise 9.1

9.12

Attractiveness factor score ranges for Segment 1 in Exercise 9.1

9.13

Attractiveness factor scores for Segment 2 in Exercise 9.1

9.14

Attractiveness factor score ranges for Segment 2 in Exercise 9.1

9.15

Worksheet – calculating segment attractiveness

10.1

Weighting DBCs and their constituent CSFs

10.2

Expressing the relative importance of DBCs numerically

10.3

Competitive strength evaluation (Year 0)

10.4

Competitive strength as perceived by Segment 1 in Exercise 10.1

10.5

Relative competitive strength evaluation for Segment 1 in Exercise 10.1

10.6

Relative competitive strength score ranges for Segment 1 in Exercise 10.1

10.7

Competitive strength as perceived by Segment 2 in Exercise 10.1

10.8

Relative competitive strength evaluation for Segment 2 in Exercise 10.1

10.9

Relative competitive strength score ranges for Segment 2 in Exercise 10.1

10.10

Worksheet – calculating relative company competitiveness

11.1

Initial quantification of a market map in tabular form

11.2

Market map with company share and number of units in tabular form

11.3

Detailed quantification of a market map in tabular form

11.4

Fully detailed quantification of a market map in tabular form

11.5

Detailed market map example in tabular form – items installed in premises

12.1

Types of intermediaries

12.2

Evaluating potential changes to the market map/value chain

12.3

The channel value curve – calculations for the alternative presentation

12.4

Worksheet – the communications mix

12.5

The communications mix

12.6

Worksheet – calculating channel-related opportunity attractiveness to the organization

12.7

Worksheet – calculating channel-related opportunity attractiveness to a segment

13.1

Guidelines suggested for different positions on the directional policy matrix

13.2

Using competitive strength evaluation to prioritize areas for improvement

13.3

Using DBCs and CSFs to determine specific marketing strategies

13.4

Worksheet – productivity actions to close the sales gap

13.5

Worksheet – productivity actions to close the profit gap

15.1

GlobalTech’s segments

Chapter 1

Market segmentation – the bedrock of successful marketing

Summary

This chapter contains a brief review of the state of marketing. It provides some key observations on why it has today lost much of its influence in the corporate world, in spite of all our best efforts. A model outlines what marketing should actually entail if it is to regain its rightful place at the heart of organizational strategy-making. At the core of this model of best practice is market segmentation.

It is the failure to get to grips with market segmentation that lies at the heart of much of marketing’s current malaise. This emphasizes the pivotal importance of this book, since little of what is best in marketing theory and practice works without correct market segmentation.

Before starting any project, let alone one as strategically critical as market segmentation, it is important to know where you are heading and what the route map looks like. A clear cut case is presented for the particular methodology to adopt, along with an overview of the process this methodology requires you to follow. Details of the process form the main content of this book.