Forum: open for business

XIII.3 May + June 2006
Page: 12
Digital Citation

The science of segmentation


Authors:
Brian Frank

When you think of designing a product "for" someone, you generally have the characteristics of that target person or persons in mind. They may be male, over 35, making $65,000-plus a year, etc. You might even extend your picture further and say they drive midsize cars, have 2.3 children, and drink coffee at least twice a day. After you go through that process, what you basically end up with is a "segment" or a "demographic" of the population that should readily identify with your design and, you hope, purchase your product.

Those of us who perform this mystical task of market segmentation know that customers will generally align themselves into categories of interest. These purchasing habits make it easier to understand toward what type of products they will gravitate. However, it’s not really as mystical as you may think. There’s just as much science to conducting accurate market segmentation as there is to conducting product usability tests. It’s in the best interest of every product designer to train themselves in describing the market that will likely be addressed by their designs. And, equally important, which markets will not be addressed.

Soccer Moms

Late in the `80s and into the early `90s, marketers began talking about the Soccer Mom phenomenon: the recognition of an easy-to-identify market segment consisting of suburban, middle-class to upper-middle-class, minivan-driving mothers who wielded a great amount of purchasing power.

Many advertisements came out to appeal to this crowd, including ones for minivans that spoke of "time-saving," "safety," and "comfort away from your busy day." That marketing push continues to the present day, in the form of materials from companies like Microsoft ("Why a Soccer Mom needs a Tablet PC," www.microsoft.com/windowsxp/using/tabletpc/getstarted/oneal_03december08.mspx).

I highlight this segment not because it’s the most powerful for technology products, but because it’s one of the most common and well-recognized segments in the marketing field. If you were not familiar with it before, you’ll be amazed to see it used in many print, TV, and radio advertising campaigns.

Big Buttons for Bad Eyes

When I was young, my grandmother came to live with us, and I gained a new appreciation for products designed for the elderly.

We had several telephones scattered around the house, and when my grandmother attempted to use any of them, she would often misdial numbers or get frustrated by the small buttons. It was clear that her eyes could not make out the numbers correctly, and even worse, if she could make out the numbers, her hands were not very accurate when dialing.

Luckily for us, a phone designer had thought of the complications that my grandmother and other elderly citizens suffer with common telephone designs. So s/he designed a phone with oversize buttons that had large numbers printed on each. Problem solved! That designer may also have had a grandmother or grandfather who needed such a design. It gives me hope that people, seeing a problem users face, will attempt to fix it by better understanding the target market.

This "Elderly Citizen" market continues to march on, subsisting on products designed for its needs and rewarded with consistent sales. If you’ve ever stayed home from work with an illness and watched television, then you’ve seen the increasing number of commercials for life insurance, medic-alert bracelets, and personal-mobility devices focused on this segment. After watching them myself, even I can say I want a Rascal (www.rascalscooters.com/index.shtml). It’s like a poor man’s Segway! I’m guessing their advertising has even spanned the "lazy technologists" market segment.

Opportunity in the Long Tail

What do the Soccer Moms and the Elderly Citizen market segments have in common? For now, ignore the logical transition women make from one segment to the other, and that there’s continuity and/or overlap in market segments. They both make up large segments that have been adequately identified and addressed with a wide variety of products.

But not all segments are well known or even identified.

Opportunities for today’s innovative product designers lie in the "Long Tail" (www.thelongtail.com), where smaller communities of like-minded purchasers cluster around more-niche products. The origins of the Long Tail market description center around the purchasing habits of used-book buyers on Web sites like Amazon.com. Statisticians and marketers determined there was a high volume of books bought by just about everyone around categories like "New Releases" and "Oprah’s Book Club," while older, lesser-known titles still sold to a collection of rabid book collectors and title seekers. The revenue for purchasing these books, while lower on average than revenue from the newer titles, made up a significant portion of the profits because of the low cost of acquiring such unique titles.

The Long Tail concept highlights that there are many subsegments that new product developers could be targeting to address a smaller but much more focused need.

Segment, the Right Way

Segmentation can be learned by reading, digesting, and forming opinions on how others try to segment the world around us. Experts in the field, like the Gartner Group, create elaborate categorizations of users in different product markets. It would behoove any product designer to familiarize themselves with the analysts who cover their area.

These analysts survey a wide population with questions like those below to gauge a user’s interests, buying habits, and psychological inclinations: What car do they drive?

What kind of watch would they buy? Where would they shop for furniture? How much would they spend on coffee during the week? Do they walk, bike, ride the bus, or drive to work? Are they visual or mental problem solvers? Do they like vanilla or chocolate ice cream?

Answering questions such as these for your market segment can help you make educated judgments about what types of product designs would best capture the target market’s interest.

As you practice this process more and more, your skills at making design judgments will improve and, in turn, you’ll be able to more accurately reflect your target market in the products you create.

Follow-Up Reading Materials

Wikipedia definition of Market Segment
http://en.wikipedia.org/wiki/Market_segment

Wikipedia definition of Soccer Mom
http://en.wikipedia.org/wiki/Soccer_mom

Why a Soccer Mom needs a Tablet PC
http://www.microsoft.com/windowsxp/using/tabletpc/getstarted/oneal_03december08.mspx

Gartner
http://www.gartner.com/

The Long Tail
http://www.thelongtail.com/

Author

Brian Frank
Product Manager, UI Specialist
email@brianfrank.com

About the Author:

As a successful product manager and user-interface specialist, Brian Frank has driven the design and development of many successful software products, such as Microsoft Excel and Palm OS. His past work experiences include stints at small startups, growing industry leaders, and large Fortune 500 companies. Currently, he can be found living and working in San Francisco on the next generation of mobile technology. Brian graduated from Cornell University with degrees in computer science and science & technology studies, focusing on human-computer interaction.

©2006 ACM  1072-5220/06/0500  $5.00

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