Merging minds and matter – actionable segmentation powered by data fusion

Manjima Khandelwal, Shuchi Sethi, Daniel Jenkinson and Adam Murphy
ACNielsen Customized Research (IR), United States

THE MARKETING CHALLENGE

In today's marketing world, segmentation is considered “old hat”. However, traditional segmentation approaches are riddled with challenges that limit their ability to truly drive strategy and change the course of a brand. Building segmentation that is actionable requires a new innovative approach to an old concept, which can revolutionize a market and identify growth opportunities that can be successfully implemented.

Some of the criticisms that have been fairly leveled at traditional segmentation include:

“These segments are interesting, but don't seem to buy different brands or products or even have different attitudes towards brands – so how do we know which segments to target with our brands?” This is traditionally the classic, and still the most frequent reason segmentations fail. Most often this happens when companies try to segment the markets using an a-priori approach based on demographics that overcomes the problem of identifying and targeting consumer groups. Segmentation built around gender and income can easily generate, for example, a direct mail list. The pitfall with this approach is that simple demographics almost never strongly correlate to actual purchase behavior in the market, and it becomes difficult to identify segments where our brand is already strong, where it is weak and where there are opportunities for growth. In the end, we often fallback to targeting the biggest segment or segments.