Audience segmentation

Introduction

Marketing is in a  transition stage. Today, marketers are mass customizing their products and also personalizing their communications. One of the characteristics of segmentation i.e. size has become less relevant in the modern day marketing. Hence, marketers are now looking for micro-segmentation and hyper targeting. Thus, it has become imperative for marketers to know the process of audience segmentation and later offering their solutions to meet the customer needs.

What do you mean by audience segmentation?

Audience segmentation is the process of divining customer groups into subgroups based on homogeneous characteristics such as

• Demographics
• Psycho-graphics
• Media usage
• communication behaviors

Homogeneity

Let me take an example and illustrate the homogeneity. Assume a bike dealer gets 1000 footfalls in a month. The  sample details of customers are as follows:

Name of the customer	Age	Income of the family per month	occupation	city
A	24	Rs 60000	Call center executive	Bengaluru
B	26	Rs 40000	Marketing executive	Bengaluru
C	29	Rs 60000	Govt salaried	Bengaluru
D	35	Rs 65000	IT executive	Mysore
E	26	Rs 15000	Security	Bengaluru
F	28	Rs 55000	Production Manager	Bengaluru.

Now obvious question is how do we find the homogeneity if a bike dealer wants to sell his Rs 2,80,000 bike. First, we will filter the data from the thumb rule of 50% of the salary assuming that other part will go to house hold expenses. The person E  earning Rs 15000 per month may not be a right suit for high end bike The Person D might have come to Bengaluru and might have done window shopping at the bike dealer retail outlet.Hence his name may be omitted. Most of the finance company gives the car /bike loan for threee years. Hence EMI for three years will be around Rs 10,000. Thus , B may not be the right person to buy the product at this stage of his life. Hence only A, C, and F are having the potential to buy the product. However, The person F is having only two years of service. Looking at all this the dealer will target only A and C.

 If we go back and analyze the data now both A and C are in the age bracket of 23-30 years. That's the homogeneity.

Looks tedious! thus, data science come into the picture to find the homogeneity of crores of customers profiles through cluster analysis.

Modes of customer data collections

A customer group's  data may be collected from

a. Qualitative approach

In this method, a customer data collected via secondary data, qualitative data analysis techniques such as focus groups, Delphi techniques, projective techniques and depth interviews. However, a customer data have serious issues as relevance, currency, representatives of the data, suitability of qualitative interview panel members

b. Quantitative approach

Quantitative data collected from survey and observation for the first time by the researcher using either personal interview, mail interview, telephonic interview, or online interview.

Segmentation decisions:

Strategy 1: Allocating resources equal to all segments.

Strategy 2: Differentiating the amount to each segment.

Strategy 3: Identify one or a few segments and allocate the resources.

References

         

1. Audience segmentation. (2010). Retrieved 15 June 2020, from https://en.wikipedia.org/wiki/Audience_segmentation#:~:text=Audience%20segmentation%20is%20a%20process, communication%20behaviors%20and%20media%20use.
2. Maibach, E. W., & Parrott, R. (1995). Designing health messages: Approaches from communication theory and public health practice. Sage.
3. Weinreich, N. K. (2010). Hands-on social marketing: a step-by-step guide to designing change for good. Sage Publications.