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Blasphemous as it may sound to traditionalists, this marketing mainstay scarcely even exists!
Countless segmentation studies have been carried out over the years because different brands are thought to appeal to different kinds of people. But we have long doubted this supposition. Instead, we expected similar brands to appeal to similar people, an idea that has now been widely confirmed. This article discusses implications for targeting and advertising and provides analyses that can be readily replicated for any product category.
Market segmentation is a popular topic. Marketing experts typically say that segmentation, the process of dividing the market into relatively homogenous consumer groups with similar needs, is essential for marketing success. But despite the industry's heavy investment in segmentation studies, the literature focuses on techniques (e.g., CHAID, Conjoint, etc.) rather than on results.
But if "sophisticated" techniques are commonly needed to identify brand segments at all, do the "emperor's clothes" really exist? Literature reviews, such as Wedel and Kamakura's recent text, have in fact reported no demonstrable and stable brand segments. (See Additional Reading section on page 7.) Thirty years ago Martin Collins had already noted that segmentation techniques were all designed to establish what grouping of consumers is "best," while ignoring whether any useful grouping can actually be made at all. in our study we therefore asked whether the user profiles of directly competing brands in fact differ. The results say "No!" Therefore, the real marketing issue in a competitive mass market is not, "Who buys my brand?" but rather, "How many buy it?"
THE DATA
The data analyzed are from BMRB International's Target Group Index (TGI) for 42 varied industries in the United Kingdom, including durables and services. The TGI is a continuous self-- completion survey covering more than 200 demographic, media usage, and attitudinal variables, based on 25,000 adults annually. Respondents state whether they buy/use/serve the category, how often, and which specific brand or brands. Some of the classification variables, measured on 5-point agree-disagree scales include the following:
* I love to buy new gadgets and appliances.
* It's worth paying extra for quality items.
* I listen intently to radio news.
* I enjoy eating foreign food.
* It is important that my family thinks l'm doing well.
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