|
Segmentation is based on the principle that all customers
are not alike. They differ greatly in terms of buying behaviour
& choice of products. This variation depends upon a number of
factors such as income, age, cultural preferences, etc. Effective
marketing calls for segregating consumer groups into various sets
depending upon these factors. This process of segregation of the
market is called segmentation. The basis for segmentation can be
broadly classified as:
1. Geographic
2. Demographic
3. Psychographic
4. Behavioristic
It is to be noted that a group under a particular segment cannot
have the same characteristics as that of a group under another segment.
By identifying the segment to target, the organisation can then
focus its approach and strategy to that particular target segment.
It can offer its product/ service to a particular segment or offer
different products to different segments. However, it is possible
that a consumer from a particular segment may buy the product/ service
offered to or targeted at a different segment. It is but a small
exception to the rule, the rule of segmentation from which marketers
have greatly benefited in terms of understanding markets better
& soaring advertising ROI. It allows the company to satisfy
the needs of a particular group & thus helps in building brand
loyalty. It also supplies the analysts with sample information to
be used for forecasting & predicting sales and gives pointers
regarding change in preferences & attitudes.
Marketing on the Internet is still relatively new. E- commerce is
booming on the net. More & more companies are realising the
importance of having an online presence and leveraging their brands
online. When this first phase of the rush for a successful web presence
is over, marketers will start looking at the peculiarities of this
new marketing tool to understand it better and have effective marketing
strategies for the Internet.
The traditional limitations of the offline advertising tools are
not to be seen on the Internet. Magazine advertisement have a long
lead time & hence are not suitable for products with fluctuating
prices when the market is price sensitive. A TV advertisement on
the other hand may be too brief for a product, which requires a
lot of information to be given to aid the purchase decision process.
A product of international appeal & limited number of customers
will get a poor response from a print advertisement in a national
newspaper. The major drawback of an offline marketing strategy vis-à-vis
an online one is the amount of time needed to elicit a response.
Over the net, advertising & promotion is likely to have a faster
impact than an offline campaign. Online advertising & promotion
allows a greater & fresher brand recall, which may trigger an
impulse buy. This is possible mainly due to the advent of e- commerce
sites, which allows purchasing online. One of the major advantages
of the online mode of advertising, which was identified way back
in 1994-95, was the magic of interactivity. Interactivity in content,
information about the product, it's all available now on the click
of a mouse. Information not easily available otherwise, can now
be provided easily & freely to the customer. On the other hand,
important information about the customer is now easily available
through the net. A lot of time, money & resources are saved
in the process. Thus, the "speed' of the net is an important
factor, be it faster response from the customer or faster collection
of data from the market. Strategists can track customer response
in real time and can thus fine tune their online & offline marketing
campaigns. It is akin to feeling the pulse of the market & selling
the right prescription to it.
The offline marketing world was based mostly on the push strategy.
Forceful advertising, hammering the product message, repeated insertions
in the print media, all helped brand recall. The online marketing
strategies are based on the pull strategy. On the net, a product
has the undivided attention of the potential customer, albeit for
a short time. This is something that was never guaranteed in the
traditional media. Advertisements were too short on the TV or radio.
Print insertions are cluttered with other brands vying for attention.
Information available online on the click of a button, had to be
obtained by means of a telephone call or a personal visit. This
required a high degree of motivation on the part of the potential
customer, thus justifying a push strategy. Today's customer is growing
more & more wary of the push strategy. S/He is in quest of information
about the product & will buy only if s/he is satisfied by the
information. Surprisingly, the easy availability of information
has led to an increase in this class of consumers. This was previously
limited to buyers of a new product category or those who just wanted
to guard against risk.
One to one marketing & customer relationship are buzzwords today.
Two sure ways of achieving success in this arena are direct marketing
& online marketing. However, when it comes to the calculation
of cost per customer or effectiveness, the net is the clear leader.
It also allows for achieving customisation of advertising at the
individual level & caters to consumers' needs at that very important
point of making a purchase decision. For example, a customer may
need to compare prices, while a second may look for certain attributes
of the product. Brand loyalty & repeat purchases are better
achieved through pull strategies on the net.
The segmentation process on the Internet starts off the same way
as it is done offline, i.e. collection of data. However the similarity
ends there. Data collection on the net is done through registration
forms, feedback forms, reply to mailing lists, newsgroups, etc.
Data is collected in real time & processed by various statistical
tools to arrive at trends. The user can be given free information,
discount on other products, free subscription to ezines, etc. for
filling up forms intended to collect data. However, the use of the
data & the privacy policy of the company should be clearly mentioned
in such cases. The amount of data required for a segmentation process
can be huge, as the marketers are not sure of any target market
& want to collect information on as many variables as possible
-- ages, incomes, number of children, education, vehicle owned,
lifestyles, professions & so on. The rule of thumb is to select
four largest groupings or clusters of data, whose members are easy
to identify. However identifying the various attributes common to
that cluster is a complex process, as is the human behaviour.
This complexity of the above process goes to a level of obscurity
on the Internet. We have taken the example of a few popular parameters
here to expose their limitations on the Internet:
- Income - Segmentation on the basis of income suffers from different
income - expenditure ratios in different regions. Currency conversion
rates do not give a true picture of the actual value of money.
- Age - Buying preferences vary within the same age group on a
global scale. Buying power differs, especially for teenagers &
senior citizens in various countries.
- Education - Education or the level of it means different things
to different communities. On a global scale, it is very difficult
to arrive at common attributes for a certain level of education,
unless it is highly specialised & leads to a specific profession.
- Religion - It is obvious that this variable is very difficult
to target on the net.
- Life style - Life styles are mostly culture/ society specific.
They are copied from culture to culture but not very effectively.
There was a time when it was thought that the Internet would be
a threat to the cultures & traditions of countries. The global
culture of generation X looked like a reality. They had common attributes
- 18-35 years old, educated, bold, technical savvy & had a particular
lifestyle. A lucrative segment for any marketer, who does not want
his product to grow old with its consumers. Today, it is clear that
the Internet may not force upon its netizens the 'monopoly' of culture.
Regional cultures will remain as 'Little China' remains in the US
& MTV adopted the culture of Filipinos. As connectivity costs
go down, bandwidth increases, lots of freebies, discounts &
a wealth of information will attract more & more people with
greater diversity to the internet, making the process of segmentation
on the net even more complex.
Once the variables that form a lucrative cluster of customer base
for the product is identified, advertising campaigns are decided
to target those customers. The marketer arrives at the second stumbling
block here - "portals". Portals have the most popular
URLs on the web today. They claim to be a one-stop solution for
anything and everything that the netizen looks for. For the netizen
it means less URLs to remember and a place to meet people &
socialise. It could have, in most probability, also been the place
of a successful electronic transaction before, quelling his/her
security concerns. Although portals deny their comparison with the
supermarkets of the real world, they are doing just that right now.
A portal is not exactly a marketers' paradise. He would rather prefer
sites, which have a niche target audience in sync with his requirements.
After all the difference between a 'Passion' & a 'Chanel No.5'
(perfumes) is more in the customer's mind (brand image) than is
olfactory. But as long as Amazon sells more toys than ToysRUs, there
is a real problem on hand.
The Internet brings the global marketplace within reach of every
business that has chosen to go online. The fact however remains
that every product cannot be global. In fact, very few products
have been globally successful. There are various issues, which prevent
this from happening. Product designs, packaging, logos, slogans,
names & prices of various MNCs have suffered in a global marketplace.
This failure of popular marketing parameters has sent online marketers
in quest of new segmentation variables, which will hold steady with
the advent of globalisation on the net. They are also looking at
methods to keep the overriding corporate message, customer relations
& position of the corporation consistent in spite of specific
target segment marketing online.
your
comments on the article
contact
the author
Share the wealth!
If you know colleagues who would be interested in this newsletter,
please direct them to http://www.webizus.com/newsletter.html
To unsubscribe from the monthly newsletter, click
on the link below to e-mail your request to us. YOU WILL RECEIVE
NO FURTHER NEWSLETTERS from Webizus Technologies if you do.
newsletter@webizus.com?subject=unsubscribe
Webizus takes your privacy seriously. To learn more
about Webizus' use of personal information, please read our Privacy
Policy at http://www.webizus.com/privacy.html
Disclaimer:
Webizus through the content published makes no warranties or guarantees
about the products/ services represented or about the articles presented
in the newsletter. The articles by various authors are entirely
their own opinion. Webizus holds no responsibility to any damage
or loss incurred in any form to any person or organization due to
the publication of any of the issues.
Copyright ©1999-2002, Webizus Technologies, All
Rights Reserved.
For more information mail us on info@webizus.com
Contact us today for a demonstration of how we can
cut down your costs and improve your business:
Email us at: info@webizus.com
or call us at +91-9821634476 / +91-22-55910132
Download
our corporate profile
|
 
|
