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Segmentation Research: 5 Useful Tips for Naming Segments

Market Segmentation ResearchAs anyone with experience with pets will tell you, no two are alike. If you tune in to Animal Planet’s series “Too Cute,” about the first few months of the lives of litters of puppies and kittens, you’ll find evidence of siblings’ behavior differences. One is reticent, another is always hungry, one sleeps a lot while his sibling is bouncing off the walls.

In my household, our two cats are no exception. They are very different from one another. You can categorize them by saying one is alpha, the other omega (or dominant/submissive, leader/follower). Alpha cat is a bully. He struts around like he owns the place and pushes Omega cat off her perch in the sun so he can claim her spot. She allows him to do this with little to no resistance.

And yet…

The moment the doorbell rings, Alpha hides under the bed while Omega rushes to the door. Alpha is afraid of the vacuum cleaner, strangers and loud noises, and he rolls over in a submissive pose when the neighbor’s dogs are around. Omega, on the other hand, is food-obsessed and gives Alpha the evil eye when he approaches “her” food dishes. And she’s fearless when encountering new people and strange objects.

So we have a dominant cat and a submissive cat, but those labels don’t really tell the whole story.

Such is often the case in market segmentation. It’s very easy to throw a label on a market segment that represents a salient characteristic of the group, the key “differentiator” if you will. But the problem with that label is that it doesn’t cover all of the reasons that group differs from the other segments, nor does it necessarily define all of the members within the group.

Labeling segments can be a very hard task, and is truly more of an art than a science. Some of our clients have segmentation schemes for which the labels are not differentiators at all: Segment A, Segment B, etc. In these cases the labels are simply placeholders: they help distinguish one group from another in conversation, but do nothing to tell the marketer the types of people each segment comprises. End users of the segments have to learn what each segment consists of and a “key” needs to be provided as a refresher or to indoctrinate new staff.   I actually like this labeling method because it minimizes pre-conceived notions based solely on the name.

But most users of segmentation research don’t like this approach, and want something more descriptive. So if you find yourself faced with the task of naming your six freshly minted marketing segments, what should you do? A few pointers:

  1. Hold off naming the segments until you have a full understanding of not only the differentiators (how the segments were formed) but also the descriptive or profiling characteristics. Remember, once you announce the segment labels, they tend to stick.
  2. Keep the goal of the segmentation in mind. If you’re segmenting the ice cream purchaser market, calling one segment “Baby Boomers” will tell you their relative age, but says nothing about important aspects of buying behaviors that are useful to the segmentation end users.
  3. Balance broad and narrow descriptions. In the example above, “Baby Boomers” is too broad. “Baby Boomers who purchase on average 3 gallons of ice cream per month, like premium brands, and eat novelty ice cream products on weekends” is too narrow. Too broad and you can’t differentiate. Too narrow and you have not only pigeon-holed them, but you have a name that is unwieldy.
  4. It should make sense in the full context of its group membership. Calling a segment “Savvy Women Shoppers” when 25% of the group is Male, probably isn’t optimal, even if it is by far your largest percentage female segment.
  5. Stay away from labels that describe a fleeting condition or circumstance, unless that’s the defining value. If your business hosted an event and one segment was more likely than the others to have attended it, that’s terrific profiling information. But “Attendees” may not resonate if a proportion of them don’t plan to attend future events, or if attendance doesn’t relate to your primary marketing objectives.

VP / Research Management

Michele likes to hijack TRC's online consumer panel to get relevant answers to her burning research questions. She loves asking questions relating to her favorite hobbies - TV and movies, golf, casino gambling and travel - and more often than not the answers can be generalized across industries.

Contact Michele


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Guest Wednesday, 21 October 2020

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