"I Want to do a Segmentation Study..."

It is fairly common for me to get a call from a client, or a potential client, saying “I want to do a segmentation study”. Naturally I get excited at the prospect of a new study, and segmentation studies are one of my favorites. But these days, I have learned I need to ask what they mean by a segmentation study.

To a traditional researcher, segmentation means you start with a clean slate. You ask a lot of behavior and attitudinal questions appropriate for your category, along with extensive psychographic, lifestyle and demographic questions. Then you use a multitude of multivariate techniques such as cluster analysis (hierarchical and partition), tree analysis (such as CHAID, CART), K-means and Latent Class segmentation to segment the data. A typical approach may result in 3-4 segmentation solutions. Selecting the final solution requires a mix of art and science. The result is unique segments; with complex, distinctive profiles and personalities. The marketer quickly gets to “know” these personalities. They learn who represents their best opportunity, and the messages that will best resonate with them.

Now quite often, “I want to do a segmentation study” does not mean what I described above. In these instances, marketers typically have pre-identified groups that they want to understand in more detail. It may be as simple as males vs. females, teens vs. adults, brand loyalists vs. brand dabblers, or techies vs. technically challenged. The predefined segmenting is usually on some behavior or identifiable trait, and not based on attitudes or psychographics. Basically, we are just “slicing and dicing” the data by these groups, and doing profiling analysis. To limit confusion with traditional segmentation studies, we typically refer to this type of a study as a Market Profile Study, or Market Analysis.

Both of the above mentioned approaches have their purpose, and can be extremely valuable to a marketer. For now, when I get that call about a segmentation study, I will still be asking “what type of segmentation do you want to do?”