Why Segmentation Matters: Understanding Inflections in Cultural Styles To Target A Larger Market
27 Mar 2005|Added Value
A question that many executives ask is whether they should really divide up a market. Does it really make sense to cut a market into parts? Isn’t segmentation really a last resort, a strategy for those small players trying to grab a niche in the market? Some executives will grant that understanding your general demographic or industry grouping is important, but segmenting beyond basic demographic variables is a luxury. I am often asked these questions with respect to one macro-group; namely, the Hispanic market. First, why even consider this demographic group as a segment in and of itself? Can’t the same messaging and products work with this group as with everyone else? Further, why worry about dividing this group up further in terms of levels of acculturation and understanding these differences? This is a large topic that must be considered carefully. Here I offer some brief notes as a way provoke thought and begin to simplify the fuzzy notion of segmentation.
It does indeed make sense to try to target the largest amount of folks as possible. A quality marketing consultant will not advise a client to segment for the sake of segmenting alone. When it comes to understanding segments, we are talking about understanding people in a larger cultural space. No one can deny that we all appropiate the cultural style of the moment in a different way. Still, an innovative, meaningful positioning will strike a chord with something that is happening in the culture at large, a cultural inflection of style that will affect many people at some point. Coke is often upheld as an example of a star brand that never really needed to segment its market. Coke’s famous, “The Pause That Refreshes” campaign articulated the cultural style inflection that was taking place at the start of the 20th century. The industrial revolution had established a dominant culture of economic duties and hard work. The idea that one could take a break, a pause, within the work day was a new inflection in the cultural style of the time. Coca Cola has continued to tune into changes in cultural style inflections that take place decade after decade, as it did in the 1970’s with the shift from progress to nature; “Things Go Better With Coke”.
In today’s society, we all talk about “diversity” and understanding how we are all different as an important task for marketers. But we never really discuss how understanding differences allows you to get the larger market. Today,
there are many sub-cultural styles affecting the dominant style at any given moment. These sub-cultural styles are made up of people in different cultural spaces–ethnic, geographic, age, or professions–common demographic variables that line up with cultural spaces. In order to really understand whether your brand experience, including product, services, communications, and contact points, will resonate with the larger cultural-style inflection, senior managers must first understand how these differ, and then how they are similar. The common mistake is to target the group that one is most familiar with, often because one belongs to that group, with a positioning that may be unique or particular to that group with the consequence of alienating all other groups. We often witness this mistake with companies who seek to target the Hispanic group, with messages and products that assume one picture of the market (often the picture of the less acculturated Spanish dominant group). By not understanding the differences among the acculturation groupings with respect to a product or service, in effect, a small group is targeted in an often traditional matter. The consequence is one of limiting the growth of a brand with this market; as soon as people acculturate, they no longer resonate with the brand. In short, when aiming to capture the the largest part of the bell curve, we must understand the differences to find the similarities.