Last year we published an article looking at the role of segmentation and targeting within the brand development process. In this article we argued strongly for a needs based approach to segmentation. In the first of a 2 part article we are going to look at the merits of different approaches to segmentation and talk about how the identification of different segments can be used to target communication more effectively.
Mike Owen 
16 Jun, 2009
Effective Segmentation for Successful Communication
Read ‘Towards Launch Minus One - Segmentation and Targeting’
Introduction
We have determined that in order to optimise the use of our resources and ensure that our communications materials are appropriate to our target audience we need to use a ‘needs based segmentation’. This is because people with similar needs sets tend to behave in similar ways and a brand that meets those needs will tend to appeal broadly within the segment.
The process we therefore need to go through typically has 4 key elements as follows:
- Define: how is our potential audience segmented and what are the common needs that define the key targets within the broader population
- Validate: how large is/are our segment(s) and what specific validated criteria (needs) can we use to identify them
- Identify: creation of a target list of specific individuals who fall into our key segment(s)
- Target: use the target list to ensure that marketing and sales activity is directed at the appropriate segment(s)
The area that typically produces most controversy is the first of these; defining our segments. The reason for this is that there are very varied views in respect of both the objectives of this element and in terms of the approach that should be taken. The 1st part of the article will focus specifically on defining our segments.
Setting our objectives: needs or ‘unmet’ needs?
If we look firstly at the objectives of this stage we find that there is much discussion focused on the question of ‘needs’ versus ‘unmet needs’. Some will argue that our objective should be simply to uncover any ‘unmet needs’ that our brand can potentially deliver; our key segment or segments will then be those individuals with the greatest unmet need. Others will argue that we should identify individual needs (met and unmet), use these to define our segments and then explore which segments needs could be met more effectively by our brand. The difference is subtle but important.
If we focus purely on ‘unmet needs’ we run the risk that we uncover only those
needs that respondents know are unmet. Moreover respondents may not be able
to articulate an unmet need that is only partially formulated or indeed not
really considered because a solution to the need is not recognised as viable.
There are many examples of this in the consumer world. Research did not come
up with the need for ‘upmarket plimsolls that can be worn to work’ or ‘trainers’
as they are now known because respondents did not conceive that a leisure shoe
could become acceptable work attire. In the pharma world researchers exploring
cholesterol lowering drugs prior to launch did not find any real ‘unmet need’
as physicians were cynical about the benefits of lowering cholesterol in the
first place.
In addition respondents faced with the question ‘what are your unmet needs?’ will tend to focus on the rational, obvious, easily articulated and understood. Thus, unmet needs frequently include cheaper options, more efficacy, more safety and less complexity rather than different ways of thinking and an alternative focus.
If we focus on ‘needs’ per se we can adopt a more expansive approach helping respondents to articulate ‘latent’ or ‘hidden’ needs, exploring the emotional as well as the rational and deriving potential needs even where these are not clearly articulated. In the 1980’s no research respondents clearly stated that they valued the branding and packaging of beer brands more than the product and, moreover, that they were willing to pay a significant premium to get this. However, the UK launch of bottled premium priced packaged lager took the on-trade by storm, taking away market share from much cheaper and arguably better products available ‘on tap’. The potential for bottled lagers was however clear in respondents’ articulation of their needs for self expression and in their desire to belong to a more discerning, refined and intelligent group than their pint swilling predecessors.
Similarly in the pharma world, alongside resistance to testing and treating
otherwise ‘well’ individuals for cholesterol there were growing concerns about
cardiovascular risk, the general health of ordinary people and the failure
of the medical world to impact significantly on the number of heart attacks
and strokes.1 These concerns, combined with the belief that more concrete evidence
on the benefits of cholesterol lowering would be forthcoming paved the way
for success despite physicians overtly denying that there was any real need.
The rest, as they say, is history.
What’s the best approach to define our segments?
Our beliefs about objectives in many ways define our approach. If you believe that the focus should be on those unmet needs that respondents can easily articulate then a fairly straightforward approach is acceptable. Standard qualitative research approaches will work well in this scenario with preference for individual or group based approaches being largely a matter of practicalities and personal preference.
If, however, you believe that the objective should be to uncover hidden needs
and explore hard to articulate desires then a different approach is required.
Here the key is to get respondents to articulate or reveal ‘needs’ that they
themselves do not fully understand; these are made up of half formed thoughts,
ideas and feelings as well as the more concrete and well defined. Some may
be so poorly expressed or in such embryonic form that they need to be derived
by the research analyst from a variety of sources; almost like putting together
a jigsaw puzzle where half the pieces are missing or damaged.
A substantial article could be written on precisely what approaches and techniques are the most appropriate to achieve this, and it will not be the same in every circumstance, suffice to say that we need to employ a more creative approach that encourages or enables respondents to talk about emotional and psychological needs as well as rational; that brings partially formed thoughts, ideas and feelings to the surface and, importantly, allows respondents to think beyond existing paradigms and talk about what’s possible not just what’s probable.
Alongside this it is also crucial that we adopt analytic approaches that are
not constrained by the straight jacket of conventional thinking but that generate
real insight and illumination. Understanding needs is not about what people
want. Rather, it’s about what will motivate and drive people in a future world
which they cannot fully conceive in the present. 
In the late 1900s, Orville
Wright (later to become, with his brother, the first man to fly) had become
fascinated with the new motor cars that appeared on the streets of Dayton and
suggested to his brother Wilbur that they should build one. But Wilbur thought
there would never be a market for such a thing. Hindsight is a wonderful thing...
After defining our segments, the next steps in the process include validating the segmentation, identifying individuals that fall into each segments and finally targeting marketing and sales toward each segment for maximum effectiveness. In next months Third Tuesday we will look at each of these three elements in more detail
(1) The death rate from CHD was largely stable during the 1970’s and only declined slightly in the 80’s prior to the launch of Zocor (simvastatin). Source BHF statistics http://www.heartstats.org/datapage.asp?id=7998
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