Home > Articles > Business & Management

  • Print
  • + Share This
This chapter is from the book

Segmentation

A segment is where you identify the markets that you might serve. You should describe the market by size, growth and trends, and analysis by customer group—size, function, industry, geography, and other key elements. For example, retailers in Europe with more than 500 employees are considered a segment. A segment can also be loyal IBM customers who have a certain type of application. Some of the key questions to ask are What makes a segment attractive (size, growth, profitability, or others)? Where are the profitable customers? It is a continuous process of reviewing where the marketing is today and where the market is heading. Over two-thirds of best-of-breed companies segment their customer sets.

Determining which parts of the market your company can serve profitably (see Figure 1.5) involves identifying the most attractive customers and what and how they buy. Critical is the business value they require. A key part of segmentation is to review the viability of selected segments with respect to value and the ability to execute. You have to determine which segments you can add real value to and where you can create strategic control points to drive market leadership. What is a strategic control point? It might be an install base, brand, patent, or copyright, or it might be a cost advantage. Depending on your budget and skills, this aspect of defining a market can be done by a research firm. Based on what you are selling, you might need to identify the partners and channels necessary to meet the needs of the target customer segments.

Figure 1.5

Figure 1.5 Market segmentation.

This approach ensures the ability to execute. Many psychographic profiles are useful for messaging, but somewhat less useful for go-to market decisions. One big test is to think about how real the segment is—meaning, is it too narrow and esoteric? If so, that is a key sign that marketers are being a bit too academic.

However, with the new world, how does this segmentation process get modified? I spoke with one of IBM’s segmentation experts, Steve Gessner, market intelligence principal consultant, to learn more about this crucial task.

First, the act of segmentation and targeting is a fundamental marketing activity. It is the first step of marketing. You must establish targets and how to measure success. This has not changed and will not change. What’s changing is how we answer these questions in the global, electronic, personalized landscape of the future.

Segmentation used to be about segmenting buyers into groups with homogeneous needs, and the fundamentals of segmentation have not changed in 30 years. However, as technology, client insights, and customer expectation regarding personalization have improved during the last ten years, segmentation has followed suit and become less about the practice of fundamentals and more about driving segmentation down to the individual client company and more recently to the individual decision maker within the company.

This “individual segmentation” is a distinct challenge for B2B firms that, in the past, were accustomed to broad demographic segments and generalized targeting, but nowhere is this capability more important than in competition in the globalizing economies. This individual segmentation is moving the practice of segmentation to a new level of capability. Linking specific clients to behavior and needs-based segments has never been more important. This is niche-segmentation, which is the creation of relatively small microsegments with discrete needs and behaviors that can be accurately targeted for both marketing and sales actions. Arranging business value elements against these niche markets is an important capability of enterprises in the twenty-first century.

Another important dimension of segmentation in this new environment is measurability and trackability. Marketing effectiveness has never been more important or received more attention than in the last three to five years. Tools for measuring marketing impact on revenue streams around specific client target spaces are critically important as firms move forward in the global economies. So, not only must these “microsegments” be identified, they also must be measurable and their responses trackable. This is a challenge for firms that have historically created market segmentation definitions that are broad and difficult to measure impact around and are certainly not measurable at the client level.

Finally, the advent of social media marketing is changing the face of what we consider segmentation. Segmentation approaches during the next five years will include attitudinal groupings of buyers in the blogosphere, and firms will determine how to impact such attitudes using techniques and technologies only just being developed. We refer to these segments as blog-segments; influencing them will become a critical component that will accompany the new marketing capabilities required around segmentation in general.

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020