The origins of segmentation
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The origins of segmentation

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How segmentation began 100 years ago with 1 man

How segmentation began 100 years ago with 1 man

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The origins of segmentation The origins of segmentation Presentation Transcript

  • The coolest segmentation and mappingsolution you ever saw:how it all began 100 years ago with 1 manDecember 2012
  • As marketers we are pretty crap at managing 1:1 relationshipsWe struggle because we can’t handle the planning requirementsPage 2
  • As marketers we are pretty crap at managing 1:1 relationships Creating individual plans and objectives for each customer is impossiblePage 3
  • As marketers we are pretty crap at managing 1:1 relationships Even targeting communications to individuals is hard Finding the optimal combination of offer and content for each customerPage 4
  • The reality is that we manage relationships with groups of consumers Instead we use segments And we use segmentation techniques to create themPage 5
  • The reality is that we manage relationships with groups of consumers And we do this because It is easier to manage relationships with a groups Rather than individualsPage 6
  • The reality is that we manage relationships with groups of consumers If we are talking about existing customers then we often have behavioural data to play with Tesco and Woolworths think You are what you buy And generally they are correctPage 7
  • The reality is that we manage relationships with groups of consumers They use this wealth of information to create multiple segmentation solutions Across multiple dimensions Which they use to manage relationships with their shoppersPage 8
  • The reality is that we manage relationships with groups of consumers But what do you do if you don’t have access to data at this level? Or If you are looking at acquisition opportunities?Page 9
  • The reality is that we manage relationships with groups of consumers Where do you get the insight that allows you to plan your communications strategy? To create relevant offers and content Using appropriate imagery Across preferred channelsPage 10
  • The reality is that we manage relationships with groups of consumers You start with generic segmentation solutions And there are lots of them PRIZMPage 11
  • The reality is that we manage relationships with groups of consumers These allow you to break the population up Into a series of segments To better understand your target marketPage 12
  • The reality is that we manage relationships with groups of consumers They all classify consumers based on where they live The assumption is that you will be more similar to the people who live in your neighbourhood Than those who live in other neighbourhoodsPage 13
  • The reality is that we manage relationships with groups of consumers “Birds of a feather flock together” So in the absence of knowing more about you You are where you livePage 14
  • The reality is that we manage relationships with groups of consumers And we known this to be true Bondi PenrithPage 15
  • Where did segmentation begin? The segmentation industry as we know it today began over 100 years ago with this man Charles Booth (1840-1916)Page 16
  • Where did segmentation begin? He was a wealthy businessman who made his fortune through shipping But he had a bit of a hobbyHe devoted almost 20 years of his spare time to a study of poverty At a personal cost of about £1.3 million in today’s moneyPage 17
  • Where did segmentation begin? Booths circle of friends regularly discussed the social problems of the day Perhaps the most pressing in the rapidly growing Victorian cities was that of poverty This was often sensationally reported in the contemporary press to provoke fear amongst its readers Booth recognised the importance of a true description in facts and figures of the social landscape. In 1884 he undertook to assist in the allocation of the Lord Mayor of Londons Relief Fund, by analysing census returnsPage 18
  • Where did segmentation begin? From this he discovered that the census, at that time, was not fit for purpose A report was published in 1885 that stated up to 25% of the population of London lived in extreme poverty Booth disagreed and told the author that "in his opinion he had grossly overstated the case“ And that he would himself be undertaking an inquiry into the condition of workers in LondonPage 19
  • Where did segmentation begin? The outcome of this work was published under the title Life and Labour of the People in 1889 A second volume, entitled Labour and Life of the People, covering the rest of London, appeared in 1891 This was later expanded between 1892-1897 A third volume was published as Life and Labour of the People in London in 1902-1903Page 20
  • Where did segmentation begin? Booth and his team of researchers recorded a huge amount of data over the years of study The survey methodology was complex and original Booth attempted to understand the lives of Londoners through an investigation of 1. their places of work and working conditions 2.their homes and the urban environments in which they lived 3. through the religious life of the cityPage 21
  • Where did segmentation begin? Investigators accompanied London School Board visitors, and policemen on their beats They interviewed factory owners, workers and trade union representatives at their places of work or in their homes They visited ministers of religion and their congregations The data they gathered was then used to generate statistical evidence of the living and working conditions of LondonersPage 22
  • Where did segmentation begin? Originally he wanted to collect data for every family in London He began in Tower Hamlets and worked his way through Hackney Soon realised that this goal was unachievable They collected information for the rest of London on a street by street basisPage 23
  • Where did segmentation begin? The study identified 8 categories of social class based on their degree of povertyPage 24
  • Where did segmentation begin? Each street was the put into a segment and the results mappedPage 25
  • Where did segmentation begin? It’s the black areas that are the most interesting “Lowest Class, Vicious Semi Criminals” He expanded on this description This doesn’t sound like MosmanPage 26
  • Where did segmentation begin? West EndPage 27
  • Where did segmentation begin? BayswaterPage 28
  • Where did segmentation begin? BoroughPage 29
  • Where did segmentation begin? LimehousePage 30
  • Where did segmentation begin? Booth popularised the idea of a “Poverty Line” He set this line at 10 to 20 shillings Which he considered to be the minimum amount necessary for a family of 4 or 5 people to subsist Through his work Booth finally identified that 35% of Londoners lived in povertyPage 31
  • Where are we today? Booth’s work was eventually the start of the modern movement In 1966 Richard Webber was working at the Centre for Environmental Studies investigating measures of social deprivation in Liverpool He used data from the 1966 Census to build a ward level classification that identified deprived areas with different needsPage 32
  • Where are we today? In 1979 Richard went to work for CACI where he built Modern Geodemographics was born This was immediately overlaid onto TGI to allow the segmentation to be cross tabulated with the UK’s largest market research samplePage 33
  • Where are we today? In 1985 Richard left to join CCN - which later became known as Experian The largest business services company in the world In 1986 they launched Since then Mosaic has taken over the worldPage 34
  • Where are we today? There is even here Which we are currently using on Aegon to identify the target market for launch and to create value propositions for their Insurance productsPage 35
  • Where are we today? Segmentation is now a multi billion dollar market worldwide And it was all started by a ship owner from Liverpool who wanted a better view of the scale of poverty in Victorian London hamish.hartley@ogilvy.com.auPage 36