Market Segmentation: How to do it, how to profit from it

Contents......Page 6
Foreword......Page 12
Preface and acknowledgements......Page 14
An important note to the reader from the authors......Page 16
List of figures......Page 20
List of tables......Page 24
1 The state of marketing......Page 28
Practitioners......Page 30
Consultants......Page 34
Academics......Page 35
Review......Page 36
References......Page 37
2 The central role of market segmentation in profitable growth......Page 38
From tactics to strategy......Page 40
Define markets and segments, and understand value......Page 42
Determine the value proposition......Page 43
Integrated marketing communications......Page 45
Delivering the value proposition......Page 46
Monitor value......Page 52
Marketing's role in value creation......Page 54
Review......Page 56
References......Page 57
3 Preparing for segmentation – avoiding the big mistakes......Page 58
Definition of market segmentation......Page 60
International market segmentation......Page 64
Objective of this book......Page 66
Company archetypes......Page 68
Case study conclusion......Page 71
Classifying market segmentation in organizations......Page 73
Effective market segmentation......Page 75
The 'postmodern' customer......Page 78
Segmentation team......Page 79
Data for segmentation......Page 80
Rules for segmentation......Page 81
The advantages of segmentation......Page 82
Developing segments......Page 83
Marketing objectives and strategy......Page 85
Segmentation case histories......Page 86
Review......Page 89
References......Page 91
4 Determining the scope of a segmentation project......Page 92
Fast track......Page 94
Geographic scope......Page 95
Defining markets......Page 97
Developing the market definition......Page 98
Whose needs are being defined?......Page 105
Ensuring the definition is meaningful to your company......Page 108
Markets and SBUs......Page 111
Sizing the defined market......Page 112
Process check......Page 114
Case study – Agrofertilizer Supplies......Page 115
Further examples......Page 117
Exercises......Page 118
5 Portraying how a market works and identifying decision-makers......Page 122
Summary......Page 124
Fast track......Page 125
Constructing your market map......Page 127
Getting started......Page 128
Initial quantification of the market map......Page 136
Adding junction types......Page 138
Market maps in the tabular form......Page 140
Market leverage points......Page 141
'Shared' decision-making......Page 143
'Cumulative' decision-making......Page 144
Selecting the junction to be segmented......Page 145
To include or exclude non-leverage groups......Page 147
Testing current views about segments: preliminary segments......Page 149
Process check......Page 151
Case study......Page 152
Further examples......Page 155
Exercises......Page 158
6 Developing a representative sample of different decision-makers......Page 162
Summary......Page 164
Fast track......Page 166
The components of a 'micro-segment'......Page 170
Key Discriminating Features (KDFs)......Page 171
KDF guidelines......Page 173
What, where, when and how......Page 179
Price......Page 182
Profiling and ensuring it is practical......Page 183
Profiling – standard categories......Page 185
Profiling – additional categories......Page 187
Profiling – keeping it practical......Page 188
Developing micro-segments......Page 189
Getting micro-segments up and running......Page 190
Managing micro-segments – keeping control......Page 201
Process check......Page 203
Case study......Page 205
Further examples......Page 210
A selection of standard approaches to profiling businesses......Page 212
A selection of standard approaches to profiling individuals......Page 216
Exercises......Page 221
7 Accounting for the behaviour of decision-makers......Page 224
Summary......Page 226
Fast track......Page 227
Explaining customer behaviour......Page 229
From 'features' to 'benefits'......Page 231
Standard, company and differential benefits......Page 233
Looking beyond the status quo......Page 234
Price......Page 236
Micro-segments and their Decisive Buying Criteria (DBCs)......Page 239
Defining micro-segments by their needs......Page 240
Expressing the relative importance of DBCs numerically......Page 244
Techniques for uncovering unsatisfied needs......Page 247
Process check......Page 253
Case study......Page 254
Further examples......Page 256
Exercises......Page 259
8 Forming market segments out of like-minded decision-makers......Page 264
Summary......Page 266
Fast track......Page 267
The components of a market segment......Page 269
Size of market segments......Page 270
Number of market segments......Page 272
Building micro-segments into market segments – clustering......Page 273
Visual clustering (pattern analysis)......Page 275
Mathematical clustering......Page 278
Isolating the most important DBCs......Page 283
Acceptable differences......Page 284
What if…......Page 285
Computer-assisted clustering......Page 287
Segment checklist......Page 289
Profiling revisited......Page 290
Checklist questions......Page 293
Process check......Page 295
Case study......Page 296
Case study conclusion......Page 299
Further examples......Page 300
References......Page 302
Exercises......Page 303
9 Determining the attractiveness of market segments......Page 310
Summary......Page 312
Fast track......Page 313
The Boston Matrix......Page 315
General Electric/McKinsey Matrix......Page 316
Segment attractiveness......Page 319
Segmentation team......Page 320
Defining segment attractiveness factors......Page 321
Weighting segment attractiveness factors......Page 323
Scoring the segments......Page 324
Plotting the position of segments on the portfolio matrix......Page 326
Process check......Page 329
Examples......Page 330
Exercises......Page 331
10 Assessing company competitiveness and the portfolio matrix......Page 336
Summary......Page 338
Fast track......Page 339
Company competitiveness......Page 341
Time horizon......Page 342
Competitiveness factors......Page 343
Weighting the factors......Page 344
Scoring your company and your competitors......Page 345
Producing the portfolio matrix......Page 347
The DPM......Page 349
Process check......Page 350
Examples......Page 351
Exercises......Page 353
11 Realizing the full potential of market mapping......Page 358
Enhancing the information on your market map......Page 360
Further quantification of the market map......Page 361
Extending the detail to junction types......Page 364
Adding market leverage to junction types......Page 367
Detailed market maps in the tabular form......Page 370
Review......Page 372
Examples......Page 374
12 Predicting market transformation......Page 380
Multi-channel strategy formulation......Page 382
Future market mapping: analysing industry structure......Page 384
New channels......Page 385
Reconfiguring the market map......Page 387
Towards a future market map in financial services......Page 389
Multi-channel integration: channel chains......Page 392
Channel choice: the channel value curve......Page 394
The prioritization matrix: defining channel strategy......Page 397
Determining channel tactics......Page 399
Exercises......Page 401
13 Setting marketing objectives and strategies for identified segments......Page 410
Marketing objectives: what they are and how they relate to corporate objectives......Page 412
So what is a corporate objective and what is a marketing objective?......Page 414
How to set marketing objectives......Page 416
Competitive strategies......Page 423
Where to start – gap analysis......Page 429
Marketing strategies......Page 435
Marketing objectives, strategies and profitability – valuing key market segments......Page 437
Suggested approach......Page 438
Review......Page 439
References......Page 440
Exercises......Page 441
14 Organizational issues in market segmentation......Page 448
Segmentation as a company exercise......Page 450
Support from the chief executive and top management......Page 451
Size and diversity......Page 452
Line management support......Page 457
Integrating the segmentation process into a marketing planning system and into a total corporate planning system......Page 459
Successful implementation of segmented marketing......Page 460
Strategic integration through the mission statement......Page 461
The human face in segmentation......Page 463
Review......Page 464
Reference......Page 466
15 Using segmentation to improve performance – a case study......Page 468
Background......Page 470
The segmentation project......Page 472
Strategy development and implementation......Page 477
B......Page 480
C......Page 481
D......Page 482
F......Page 483
J......Page 484
M......Page 485
P......Page 489
S......Page 491
X......Page 492