“We need to understand our customers better. We need to do some segmentation.”
Have you ever been on the receiving end of such a comment, usually from a senior manager or company executive?
I have.
As market researchers, our first instinct probably is (and should be) to go Socratic and answer this question with a question of our own:
“What are you thinking of when you say we need some market segmentation?”
Market researchers are often highly trained in segmentation as a market research process. The term evokes a specific form of research and analysis. But in marketing circles in general, and certainly in corporate management outside of marketing, market segmentation has a plethora of meanings, from very simple (to market researchers) analysis all the way up to sophisticated blending of qualitative and quantitative market research, analysis and statistical modeling. Whew!
Quite often what I heard back in response to the question of what a manager meant by needing some market segmentation was really what is called stratification in market research circles.
This is the ordinary and customary ways of analyzing markets by simple demographic breaks, such as categories of age, education, income, etc.
While this is part and parcel of a market researcher’s stock in trade, I’ve heard it commonly referred to by managers as market segmentation. To them, each age group is a segment, while to a market researcher it is often much more interesting and productive to look across demographic variables in conjunction.
So when a manager answers my question by saying he or she wants to look at the markets by demographic strata, I again follow up by asking what prompts the question. Usually, the manager will have a specific issue or concern and by discussing this I can often give the manager better and more salient information and analysis. After all, I’ve been pouring over the market research in detail, while the manager may have only had time to give a report or executive summary a cursory look. By asking more questions I can be much more on target in providing the potential answers to the issues clients face.
More to follow.
Comments welcome!
Dr. Bob
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