Has Marketing Segmentation Stayed the Same Since 1964?

During my No BS Marketing workshops for C-suite leaders, we spend a lot of time on segmentation. I appreciate the desire of senior leaders wanting to learn how they can segment better. It seems regardless of level in an organization or job responsibilities, many people barely scratch the surface as to leverage the power of segmentation.

It made me wonder: why?

The MASSolutions team continually digs for research, white papers, blogs, speaker talks and anything else we can find to help our client and loyal No BSers. In doing so, we’ve come across what might be the introduction to segmentation.

The date might surprise you.

In a March of 1964 article in Harvard Business Review, Daniel Yankelovich, owner of Viewpoint, a market research firm, talks about the need to master the vast amount of information resulting from the information revolution.

Imagine that: he describes the information revolution of 1964 which I’m sure was big to that point but probably not as big as the information revolution of the past 20 years. 

Yankelovich writes this:

“In today’s economy, each brand appears to sell effectively to only certain segments of any market and not to the whole market.

Sound marketing objectives depend on knowledge of how segments which produce the most customers for a company’s brands differ in requirements and susceptibilities from the segments which produce the largest number of customers for competitive brands.

Traditional demographic methods of market segmentation do not usually provide this knowledge. Analyses of market segments by age, sex, geography, and income level are not likely to provide as much direction for marketing strategy as management requires.”

Yankelovich goes on to explain that segmentation analysis helps marketers:

1. Direct the appropriate amounts of promotional attention and money to the most potentially profitable segments of his market (Hint hint, cough cough: Customer Acquisition Cost and Lifetime Value)
2. Design a product line that truly parallels the demands of the market instead of one that bulks in some areas and ignores or scants other potentially quite profitable segments
3. Determine the appeals that will be most effective in his company’s advertising; and, where several different appeals are significantly effective, quantify the segments of the market responsive to each
4. Choose advertising media more wisely and determine the proportion of the budget that should be allocated to each medium in the light of anticipated impact;
5. Correct the timing of advertising and promotional efforts so that they are massed in the weeks, months, and seasons when selling resistance is least and responsiveness is likely to be at its maximum
6. Understand otherwise seemingly meaningless demographic market information and apply it in scores of new and effective ways

These advantages hold in the case of both packaged goods and hard goods, and for commercial and industrial products as well as consumer products.

Segmentation has been around for some time, but more of than not, we’re barely getting deep enough into it. If you’re not segmenting your target audiences by at least 5 unique variables, you’re missing opportunities. You need to do the real drill down and then develop creative marketing solutions tailored to each segment.

In other words, you need to make sure your No BS Marketing Hits the Bullseye.