Tag Archives: segmentation

Segmentation Myths and Ethnography

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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.

 

Sampling: Why Individuals Don’t Matter

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We spend a lot of time talking about samples when talking with our clients.  Samples are constructed differently in ethnography than for focus groups or surveys. Ethnographers sample settings and interactions as much as individual people. The individual is rarely the unit of analysis.  Sample is defined in the social interaction and the contexts in which activities occur. Asking a person if, say, they have specific impressions of a brand of beer will doubt yield information.  Unfortunately, it’s simply nothing more than a first-hand account of what you get from a survey.  Interacting with a group of people as they move from bar, to dinner, to party will yield significantly more information about brands and the contexts of selection and use.

All too frequently, sample devolves into a discussion of validity, with a portion of the clients pointing fingers and declaring the shortcomings of the methods in question because, quite frankly, they in fact know precious little about statistics and the epistemological constructs around them.  But reliability and validity are by no means symmetrical.  It is possible to obtain perfect reliability with no validity, but perfect validity would assure perfect reliability because every observation would yield the complete and exact truth.  This notion is what leads to an obsession with “typing” individuals and limiting our ability to uncover new, meaningful insights.

Loosely speaking, “reliability” is the extent to which a measurement procedure yields the same answer however and whenever it is carried out; “validity” is the extent to which it gives the correct answer.  As an example, imagine 100 people participate in a survey on grocery shopping to determine the optimal placement of goods on the shelves, thereby increasing how quickly people get in and out of a store.  Regardless of the specific questions, the point is that the survey will produce statistically reliable data about individual units of analysis (or what I like to call “people”).  The questions it does not address are what people really do when they shop and why do they do it.  Understanding THAT requires thinking about the sample in terms of context, not individuals.

The number of individual participants involved depends on the relevant diversity of the target population. A skilled ethnographer may use multiple methods in the recruiting process and not rely only on professional recruiters. This different approach to sampling also means that sampling is often built as part of fieldwork, and refined once a team is on the ground and collecting data. This can, and often does, scare a client absolutely shitless.  After all, they are working from psychographic models and segmentation schemes, all the while worrying about which of the other stakeholders will call the work out as a way of currying favor or establishing greater power in the boardroom.  But, the fact is that while statistical work is valid in many respects, it is only one way of envisioning the world.  When faced with the complexities of human interaction, these schemas break down.  In practice, the power of an ethnographic process lies in uncovering unexpected patterns, not in reifying the segmentation work that has already been done. While an ethnographer will no doubt have specific sampling parameters from a client, they should also be able to articulate why sampling may change once the research begins. If they can’t, then you’ve wasted your money.

While Buying Beer Today…

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I was shopping for beer today after several hours of planting and couldn’t help watching and listening to the people around me. An woman of around 60 was buying a bottle of wine and I noticed she had a tattoo on her all-too-grandmotherly wrist.  A small, pink star.  And then there was the stereotypical suburban dad buying a six pack of Warsteiner, a six pack of Alpirsbacher and a six pack of Hofbrau.  Overhearing his phone call it turned out he was a finance guy from 8:00 to 5:00 five days a week, but on the weekend he became the beer aficionado. Based on the kinds of information derived from traditional segmentation, these folks didn’t fit. And yet, they are the postmodern shopper.

The days of mass marketing may be coming to an end in many respects.  The advent of social media, incredibly rapid modes of communication and a postmodern view of socio-cultural ties that allow us to largely construct  our identity from moment to moment have changed the way we group, think and act. These days we’re the tribal people, not the demographic probabilities of a region or zip code. Over the past few years especially, what we do and why we do it is becoming of increasing interest to business. And while that may have always been true in a macro sense, the interest has now shifted to the multitude of grouping and sub-grouping to which we flock. It’s humans rather than numbers that they observing as we go about our daily lives and adapting their messages, products and services to fit the moment as well as the person.

For instance, how iron workers with advanced degrees in English Literature  react to a mountain of texts on their phones; why retired women are using their iPads to search for shamans to help heal their ills; how we do the grocery shopping, how we pamper the cat. And it is this sort of thing that is perhaps the most relevant to both the buyer and the seller.

Why does it matter? It’s in the math. 70% of purchase decisions happen in store. 68% of in-store purchases are impulse buys. 59% of purchases are unplanned. Looking at those numbers it speaks not only to the need to develop experiences that draws people in, but ones that keep them coming back again and again. This doesn’t happen when the only choices are shades of vanilla. It happens when you start to think of marketing as an ever-shift process that speaks to the mercurial nature of the human condition.

By Gavin