Segmentation Myths and Ethnography

The simple purpose of market segmentation is to discover meaningful differences among a target audience.  It categorizes and simplifies, giving designers, business strategists, retailers, manufacturers, etc. something they can wrap their heads around when doing their jobs.  Segmentation is a character study in statistical form.

Unfortunately, many efforts at segmenting markets result in vague categories arbitrarily cut up into artificial statistical markers. You could spend a lifetime creating market segmentation studies, and there are those who do.  But you will never hear a female consumer describe herself as “sassy, professional empty-nester.” No thirty-something male will refer to himself by the elements that make him a “tech-savvy professional.” And that self-definition is important because it points to the inherrant complexity of who we are – that unquantifiable rabble that is humanity. And yet that’s how many seemingly sophisticated segmentations pan out. The net result is marketers and business development teams coming to think of their consumers and users as  numerically defined caricatures. They lack a cultural or an emotion understanding of who this person is.

Segmentation has devolved into one of marketing’s greatest distractions. Like the focus group, it is often a parody. In fact, the obsession with segmentation causes many companies to spend excessive time and money trying to find new customers when they can’t even adequately profile their best customers.

Instead of focusing on product attributes and on market size data, companies must learn what jobs customers want to perform and use this as their marketing guidepost.  And when I say ”jobs” I mean more than simple tasks.  I mean the roles they assume, the games they play and how different parts of their lives fit together as a whole.

Endless attitudinal statements, with scales for “agree” and “disagree” are constructed and by the very nature of the question structure have severe limits. Most conventional research consists of predetermined questions and parameters that force research subjects into narrow channels of response. And these are often as much a bias of the researcher (or the boss) as a reflection of the customer’s worldview. The very nature of posing a direct question immediately primes the respondent to seek the “right” answer. Because of this structure, marketers feel compelled to portion the market in some way or another. Otherwise, they wouldn’t be called segments. So, at the outset, market researchers are determined to find differences, and they do, even if they have to invent them.

In contrast, ethnographic research routinely reveals customers are more alike than different at the source of their behavior.  And where the differences lie, they are far more profound and surprising than the answers segmentation will reveal.  It uncovers how the entire human experience translates into the act of being a customer for a particular brand, product, or service.  It moves beyond attributes. It provides a clear view of cultural and behavioral categories based on the social, cultural and psychological needs and barriers driving customer feelings and thoughts.  And because it looks through the lens of a holistic system structure,  it yields a more realistic understanding of the customer than traditional methods. It produces insights and understandings that can be more predictive of the possibilities of the future than demographic, attitudinal or psychographic data.

 

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6 thoughts on “Segmentation Myths and Ethnography

  1. I generally agree, particularly with some of your more recent posts, yet this one I’m no so sure. The “job” of segmenation research may be “to discover meaningful differences among a target audience.” I would suggest digging deeper: to identify and fully describe the most profitable target(s) for a company’s products or service offerings. Segmentation should clearly delineate that portion of the market from all others be they apathetic, ignorant, unswitchable, never satisfied, chasers of the new/bright/shiny object, unreachable, who your competitors are seeking, the wealthiest, who you really wish you were selling to because you hate your job and the crap you’re peddling, etc.

    This where true, rich ethnography can help. Surveys, database analysis, and modelling can and do get companies closer to defining that elusive target. What I’ve seen though is the models are diluted and degradet all to simply. Say you have a typical cluster segmentation with a very strong overall “accuracy” of 80% based on culling hundreds or even thousands of data points, permutations, regressions, factor analyses, etc. You whittle that list down for a “typing tool” of 6-8 questions. The “accuracy” of the typing tool is again, an outstanding 80%. So wait, now you’ve spent hundreds of thousands, if not millions of dollars to find that “ultimate” segment with a tool that can correctly place the right people in (and the wrong people out) only 64% accuracy?

    This is why ethograhpy is so insightful–you can find out and understand “holisitically” what really makes that target tick. Is there something shared beyond the data that these people need, want, believe in, organize, interpret, look like, live, work, play, socialize with, engage, that with your product or service will fulfill a missing piece in the existence? And why. The description itself is not enough–it’s the underlying drivers what that person is right now, how they got there, and where they may be headed that helps win the segmentation game. Using ethnography for a cute 5 min video won’t help and it may hurt in the long run. The need to fully understand that target will separate you from your competition. I think back Malinowski’s exchanges and also the guy selling oranges on the offramp in LA. That man knows his market, knows who will buy, how to get them to buy, and come back to buy again. He may see an opportunity to sell umbrellas on rainy days, logo hats during a sports playoff run. The nuances of the market are right there to be understood and used. Marketers, designers, brand managers live and breathe the corporate center, but cannot fully understand their targets from a brief, a video, a spreadsheet. That’s why the need ethnographers.

  2. It is anyway very interesting to observe how social sciences like sociology, psychology & anthropology have gained increasing importance in recent years to help finding new growth fields in times of saturated markets but also to help solve societal problems. The whole last century was characterized by a technocratic view of the world and management, I’d say “an engeeneering view” and social sciences had a rather difficult position within that. We are moving from a process centric time into a more human centered era, at least in terms of product & service experiences.

  3. I disagree with your premise that segmentation is simply to identify differences in your target audience. While someone may not refer to themselves and a sassy techno professional— it certainly does paint a picture for the person studying the sassy pro— I would not describe myself as the “fat woman” but a marketer might to get the picture— pictures are worth a thousand words. I’m always surprised how much companies don’t know about their customers or potential customers— and what they do know sits on someone’s desk. So in a perfect word using segmentation may not seem beneficial— but in my clients’ worlds educating a marketer can be a huge benefit to his/her career and the bottom line.

  4. Bad segmentations, just like bad focus groups encompass many of the sins you detail – rather than impeach methodologies, perhaps you should be exposed to quality work, and (most of) your objections will disappear. Market research is suffering from failure to evolve, and its practitioners need more real world exposure to develop their skills and capabilities to address the problems and issues of this century rather than the last.

  5. Interesting article and great comments!
    To summarize, I would say:
    – segmentation is not accurate in reflecting the reality of a market
    – especially, segmentation done by poor marketers could lead to caricatures
    – however segmentation is important and useful for companies because itis necessary to identify the target(s)
    – segmentation shall be well define and refined: ethnography is necessary in order to be connected to the reality and to know reasons of a behavior. Ethnography can allow to have a different segmentation and this good understanding of the Consumers can give a real competitive advantage to the company
    – But in general, segmentation shall be known and each employee shall KNOW who the Customer is, how he behaves, and what his motivatons are.

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