Segmentation for hyper-mature markets

Youngme Moon in her excellent book "Different" explains an alternative segmentation scheme. The one we all learned at the school was

* innovators
* early adopters
* early majority
* late majority
* laggards.

For years each business category (airlines, telecom, music, ICT, you name it) has organized their product development and marketing activities based on the model. And it has kind of worked.

Moon offers a different approach to today´s hyper-maturated market where augmentation-by-adaptation and augmentation-by-multiply seem not to created any competitive value.

I think this one is rather interesting. Her segments are the following:

1. Brand Loyalists. They have a stubborn passion for a particular brand. No matter what the competitors do, they will stuck into the brand number one. Apple fans, anyone? They are advertisers dream - only problem is that you dont have to advertise for them.

2. Reluctants (in the category like "Mobile Phones"). They rather would stay outside of the category, but sometimes they dont have a choice: "You need a mobile phone." Dot. These people would buy a category product that simple and easy, because they lack of familarity and they feel frustrated (because of all marketing communication they dont understand). Dont send them any dialog marketing!

3. Pragmatics, non-differentiators. Their buying decisons are based on combination of habbits, routine, price and convinience: "for mobile phone I always to the nearest Gigantti, and I always buy reasonably priced new Nokia". They really dont care which product they actually buy. They have a grown skepticism towards brand alternatives.

4. Opportunists. Yes, they know a lot, they are category experts ("i know everything about the telecom technology") - but they are brand-agnostics. They participate to the category WITHOUT joy. They are transaction-oriented: coupon clippers, airmile users, discount seekers, bargain hunters, rewards points accumators. They buy all xmas presents with Diners or Amex points. They are often cynical what has happend within a category but they keep themselves updated for utilitarian reasons. They are advertisers nightmare, but dialog marketing does a trick here.

5. Finally, category connoisseurs. They have a huge affection for the category (=food lovers, motorcycle fans..), but they are not typically loyal to any brand. They are selective, picky and informed, but their loyalty is directed toward the category. Marketers like them, but they are tough to convert to Loyalists.

Think any business category and how these five segments nicely cover the bases, showing most of the ways that people, consumers, cope with hyper-mature markets. Apply the segment to airlines (full of opportunists and reluctants), or telecom (dominated by opportunists and pragmatics - wake up Sonera/Elisa...), or drugstores (growing proportion of pragmatics each passing year). If you compare any category today and ten years ago, in terms of an anatomy of a customers base, you will find out that the numebr of brand loyalists is shrinking rapidly, and brand-agnostics are stepping in.


That is a challenge to any of our customers today.


What do you think?

Website updated

Personal note: my small planning/design/consulting agency updated service we offer. Check it out (in finnish) http://www.lowreality.com/. Services include internet strategy definition, web site concept design, web site redesign requirement capture, interactive producer and of course - just a lecturer or trainer :-)

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End result: Equfit. Check out the site (in Finnish) www.equfit.fi.

I helped them for the marketing concept, program names, copy texts and web site in my spare time. First trainining session are held on their own riding premises (they even have their own gym). I would love to see these training package to become a nation-wide.

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http://www.youtube.com/watch?v=Naf0jxDd-R0

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This one even ended up to recent book :)





Check out yourself. Which one is YOUR favourite?

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http://www.marca.com/deporte/futbol/mundial/sudafrica-2010/calendario-english.html

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