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Big news today as Ron Johnson, CEO of J.C. Penney “resigned”. He did so following a series of decisions designed to make the staid Penney’s brand more hip. Sadly, thus far these changes have chased away existing customers without attracting enough new ones to turn around the store chain’s long decline.

Johnson’s decisions, like those of his mentor Steve Jobs, were made from the gut…no need for any market research. Jobs of course had an almost magic touch. Carefully choosing the markets to enter, when to do so and producing products that were seen as cutting edge. Often his decisions were seen as counter intuitive (such as the opening of retail stores in the Internet age), but time and time again he was proven to be right. So, why didn’t it work for Mr. Johnson?

First, Mr. Jobs was producing products for Apple, not J.C. Penney. Apple was known as a producer of fine computers that were easy to use (intuitive is a word often used). Some of the luster came off that reputation when Jobs left the company, but when he returned there was little doubt what Apple stood for and the types of products to expect. From the moment he returned he looked for places where that reputation (intuitive electronics) might find a market. Mr. Johnson, by contrast saw the J.C. Penney reputation as a problem and looked to change it…a far tougher task.

Second, Jobs often had success by leaping into relatively new markets and then using the power or Apple design and engineering to dominate it. He didn’t create the first digital music player, but he created one that was intuitive and he backed it up with a legal way to buy digital music. He could do this without giving up the existing Apple business (computers). Johnson needed to focus resources on shoring up the flailing store chain…perhaps if he’d had the luxury of creating small J.C.Penney Boutiques it would have worked.

Third, I am reminded of something that I once heard the legendary Warren Mitofsky say with regards to flawed sampling, “Results will be right until they aren’t”. Mr. Jobs was not always right. He left Apple the first time a failure (one could argue that others were at least as much to blame), started a new company that was largely a failure and then started his run, first at Pixar and then his triumphant return to Apple. He was clearly brilliant and had incredible vision, but he was not always right.   Of course, it goes without saying that not everyone has the same skills (me included).

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A former colleague of mine used to tell us to “torture the data until it confessed”. In other words, don’t just stop your investigation at the first finding. But rather, keep poking, prodding, flipping and coercing until you feel you’ve uncovered all the data has to give. Ah…images of Jack Bauer doing his thing flash through my mind just thinking about our own data “torture” sessions.

All kidding aside, what my colleague was really trying to say was spot on. I’m sure we’ve all known researchers who habitually stop at the first find. They rarely take the time to consider different ways of looking at data, of considering the message within.

thanksgiving turkey dinnerLater this month, those of us in the United States celebrate one of my favorite holidays, Thanksgiving. Officially, Thanksgiving is a post-harvest celebration that was brought to the Americas by European settlers in the 16th or 17th century (depending on which historian you believe). Unofficially, it's the day where families and friends gather to feast, take naps and watch football. Oh my, even as I type this my mouth is watering...turkey, potatoes, stuffing, cranberry sauce, peas and the like, with chasers of pumpkin, apple and other assorted pies. All delicious, but I particularly love eating turkey on Thanksgiving.

two_dollar_billMy seven year old son gets a $2 per week allowance. He doesn't really do anything to earn this money. Rather I give him (and his brother) an allowance to teach them how to save for things that they want. Implied, and in fact part of the bargain, is that they can't hassle me for Pokémon cards, or Wii games, or anything else they "need", because they have their own money. Well, about a month or two ago my seven year old mandated that I start paying him with a $2 bill. Yikes! Where was I going to get even one $2 bill, let alone one every week?

As we consider my situation, let's juxtapose something we've all been hearing for 10 plus years now. The brick and mortar (fill in the blank) is antiquated, and on its way to irrelevance. The Internet is the way that EVERYBODY is going to shop for and do EVERYTHING! Heck, I've heard it so many times and for so long that I agree with it, which is odd since the only items I consistently buy online are books, DVDs and music.

chessIn a recent post, my colleague Bob Hull reported that many of his clients start talking about segmentation by emphasizing all the data on their customers they already have. Bob pointed out that such demographic and behavioral data can often answer "what" questions, what customers do and what they look like, but to understand "why" customers do what they do, and how apparently similar customers differ from one another, survey research to collect attitudinal and needs-based information is necessary. 

In segmenting business markets, we have found another major advantage of including attitudinal and need-based information in segmentation studies. Very likely, a company's competitors have demographic and behavioral data similar to what the company has.

Tagged in: segmentation

Quick. What kinds of data are needed for a successful segmentation?

Well, most clients I talk to about segmentation excitedly lead with the data they already have..."we have a TON of data...yes, yes, we can get it all...what's the rule for what data are good for segmentation and which aren't?...how do we tie it all together?...we really do have a lot, (sheepishly) do we really need it all?".  This focus on their data issue is quite understandable. Companies have spent a lot of time, money and resources getting their data house in order, and darn it they need to leverage it somehow. While, in fact, there really is a lot of valuable information in the data that many companies already have, it isn't always enough. In fact, I would argue that in some instances it only provides half the answer.

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