Segmentation
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  • 1. Segmentation to increase your commercial effectiveness & efficiency
  • 2. Although segmentation is a top challenge for marketers, most companies still use the most basic segmentation method (firmographics in B2B and demographics in B2C) What will be your major marketing challenges for 2010? Build customer loyalty & trust 36% Differentiate from competition 32% Build strong brand 32% Target through better segmentation 31% Sustain revenue growth 29% Highlight value of benefits of products 27% N= 621 In 2009 Top 5 Not in 2009 Top 5 % of respondents Protect market share 26% Communicate via online media 25% Gain better understanding of customer 24% Measure return on marketing efforts 24% Innovate, product development & R&D 24%Presentation1
  • 3. Segmentation is the first step to a customer centric approach Segmentation aims to: Segments of customers Identify, describe and with similar profile, quantify in the target needs, behaviors, market expectations, or purchasing criteria That require the …and an adequate go-to- development of a specific market strategy value proposition (product (relationship building, & service offering, purchase communication, sales process & experience, approach, channel pricing, customer management) benefits…)Presentation1 3
  • 4. There are four main types of segmentation methods that can be used in parallel 2 3 Needs-based Usage-based segmentation segmentation 2 Segments based on What does 3 Segment based on past behaviors, needs and the customer and current customer’s drivers, indicating how need and want? What, where usage of channels and and how does customer thinks about the products/services the customer features of a purchase? product/service, what he prefers and for which reasons Customer 1 How can we 1 describe our 4 4 Firmographic customers? How much value Value-based segmentation does the customer segmentation deliver? In B2B: segments based on Segment based on sector, number of current/potential value employees, turnover, generated by the geographic location… customerPresentation1 4
  • 5. The appropriate segmentation method has to be selected in function of the specific business objective Segmentation methods Management Firmo- Needs & Product & Business objectives Value areas graphic drivers channel usage Acquisition √ √ Up- & Cross-selling √ √ √ Sales Loyalty √ √ Sales and after-sales channel √ √ √ √ Product/service portfolio & innovation √ √ Marketing Positioning/Value proposition √ √ Communication content √ √ Marcom budget allocation √ √ Finance Pricing √ √ √ √ Profitability √ Organization Organization structure √ √Presentation1
  • 6. Benefits of using a (integrated) segmentation approach lie in effienciency and effectiveness Segment dashboard Benefits of segmentation • Size (# companies in market) EFFICIENCY • Penetration (# of customers) • Potential revenues • Higher efficiency of Get/ Keep/ Increase • Market share initiatives • Satisfaction, loyalty and churn risk • Current and evolution of performance: • Higher sales efficiency - Lead generation - Lead conversion EFFECTIVENESS - Product penetration - Sales Revenues • Enhanced focus in marketing efforts - Gross margin - … • Optimal budget allocation • Increased marketing ROIPresentation1
  • 7. What makes The House of Marketing different?Presentation1 7
  • 8. We have a strong vision on marketing … Marketing is a mindset throughout the whole company, and only happens through uncompromising and ruthless focus on the total process of customer engagement. Marketing is a key contributor to achieve business objectives and to optimize shareholder value. Our guiding principles are Focus, Agility, Creativity, Tangibility and Sustainability.Presentation1 8
  • 9. … and a clear view on how marketing must evolve • Simplicity • Strategic consistency • Leadership continuity • Prioritize & making choices • Consistent brand across all channels • Seek leadership in specific category • Customer centricity • Focused team • Detect trends & act • Early warning systems & processes • Agile & up to date organization • Built around customer engagement • Innovative company culture • Willingness to change • Diversity of profiles • Flexibility & Speed • Idea generation process • Idea valuation • Porosity & open-mindedness • KPI’s & dashboards • Scenario analysis & ROMI • Connect with marketing intelligence • Analytical culture & skills • People: yours & every stakeholder • Planet: ACT on innovation, packaging, promotion... • Profit: business-minded marketersPresentation1 9
  • 10. We are convinced that flexibility is a key asset for the future to bridge capacity gaps... Resource Demand Chart FTE (hours per month) Project 1 5,000 Project 2 Project 3 Project 4 4,000 Capacity 3,000 2,000 1,000 0 1/95 4/95 7/95 10/95 1/96 4/96 10Presentation1
  • 11. …. and to bridge competence gaps Data cruncher Packaging E-commerce ……… Online specialist CPM specialist Performance management Project Management Shopper marketer CRM specialist Mobile marketer SocialMedia Strategist ……… Web masterPresentation1 11
  • 12. Flexibility demands the right talent at the right place, & on going training The House of Marketing can help you develop and keep the right talents in your marketing department. Coaching on the job, one company or multi company program, more details Marketing Talent program available as from October 2012 Relevant Marketing training, from general to very specific & tailor made - product management Training - project management - communication (online, offline) - social media - email marketing -…… Personal coaching focused on marketing Coaching related skills and technical skills 12Presentation1
  • 13. We offer help adapted to the new business context In a economical environment where turbulence is the new norm, The House of Marketing provides marketing excellence at the right moment, exceeding clients expectations by delivering higher return on investment and by making the organization more agile. We achieve this by recruiting passionate marketers for whom we create an inspiring and nurturing environment.Presentation1 13
  • 14. How do we work?Presentation1 14
  • 15. We work on temporary assignments…. Mostly function based B2B and B2C environments Broad FMCG experience Marketing plan, go-to-market Coordination activities of strategy & specialists in production, sales, implementation, people Brand advertising, promotion, R&D, … Marketing management, business Managers Churn analysis, churn Managers intelligence reduction Coordination of Marketing Product placement activities optimization Strong analytical and Market & competitor negotiation skills analysis Channel & Enhancing retail partnerships Business Market assessment & Category by increasing category sales Analysts quantification and aiding in fact Clustering of customers Managers based/strategic selling E-strategy definition & roll- Extended experience in SME out E-Marketers Coordination, design & and large matrix organizations Alignment of organization & Social implementation of e- Process towards similar goals Media marketing actions Managers Clear roles & responsibilities Website management, Specialists email marketing, social definition, organizational design media, mobilePresentation1 15
  • 16. … and on strategic marketing challenges Mostly project based Client challenges THoM expertise & solutions • Attract new customers • Customer intelligence: translate data into relevant insights Volume • Increase customer spending • Segmentation driven • Reduce customer churn • Business and marketing planning • Increase Innovation success rate • Innovation Management Program • Restore customer trust • Customer intelligence: translate data into relevant insights • Capture more customer value Margin • Category assessment • Margin management driven • Marketing performance management • Doing more with less resources (ROMI, CLTV, dashboards) • Tracking of ROI • Marketing audit • Define or redefine positioning • Consumer intelligence: translate data into • Changing customer experience from relevant insights product push to relational (customer- Positioning centric) • Customer (store) experience • Positioning on the sustainability dimension • Sustainability • Positioning towards current and potential • Employer branding employees Consumer analytics and insights are crucial for each of the three challengesPresentation1 16
  • 17. We offer a unique combination of strategic excellence and operational pragmatism Strategic excellence Operational pragmatism • Proven track record in strategic • Track record in making things happen marketing advice within international and complex • Creating relevant insights in the companies business • Applying practical knowledge of • Identifying the true leverages for successful corporate sales and significant improvements marketing organizations • Turning opportunities into structured • Turning initiatives into tangible actions and prioritized business initiatives • Helping you to successfully implement strategic recommendations We help you in realizing more from your marketing strategies and building the marketing capabilities for systematic resultsPresentation1 17
  • 18. We deliver tangible value by bridging the knowing doing gap… Strategic excellence Operational pragmatismPresentation1 18
  • 19. We have different meetings during an assignment PROJECT DELIVERABLES DEADLINE PROJECT DELIVERABLES DEADLINE Define MLT strategy for Market analysis End 2007 Internal Define MLT strategy for Market analysis End 2007 product X RGO identification + – Draft – product X RGO identification + estimated revenues & final reco + budget EPR Developing targeted expansion strategy for a estimated revenues & final Brand strategy Luxembourg based private life insurer Strategy, organization and marketing reco + budget Brand strategy Action plan 2008 Client Launch Product Y Product chart (branding, …. Build methodology and framework for country-specific go-to- Knowledge Capture Matrix Project objectives market launches based on learnings from first failure on the Italian market in private life insurance asset management Action plan 2008 Launch approach EPR positioning, USP, …) Client: Consultant: Project: Sodexho Pass - Apogheos Olivier Olbrechts Business Plan Date: 27/08/07 • Analysis of the fact base and decision on targets Launch package Comment: Interim (project) All documents on project saved here. Final Deliverables. Credential to follow - Life insurance business Launch Product Y Product chart (branding, …. Organization concept test STAKEHOLDERS Learnings from the way the client works Learnings on how THoM could work better New products or services Marketing domain/ methodology Relationship opportunity (executive Client agenda sell-on opportunity Industry trend/ insight Competitor information • Market structure and distribution options Follow-up launch improvement contact, positioning, USP, …) idea) SALES Apogheos = - Sold as interim project Proposal in - Small No other • Cross-border revenues Account Team Business Unit that has to be integrated but could be more profitable sold as process: coaching during the independent firms with low consulting firm identified in this - Private banking business into the Group if consulting implementation of potential for part of Sodexho return sufficiently - Formal approach and the business plan consulting/ • Market structure and differentiation Launch approach attracting to Sodexho Group deliverables could have been more clarified prior to the project interim - Exceptions (potential clients ?): • Expectations of wealthy individuals BCD Group, • Off-shore business aspects Launch package Coordinate client event ….. …. DELIVERY Marketing Domain: - No THoM methodology used - Business Plan Develop a standard financial business plan Accentiv (FR) • Value and tactics of wealth managers template created spreadsheet Methodology - Bancassurance model options in private banking Organization concept test from scratch template) - Detailed geographical study on Italian potential Follow-up launch iii team: No B2B Services team - Understanding of wealthy individuals • Wealth classification • Identification of advisory circle • Trend in family offices • (Family) business activity and influence of private equity and venture capital • Positioning study and go-to-market draft Coordinate client event ….. …. • Implications for organizational and branding requirements • Organizational roadmap and risk management Deliverables • Design of go-to-market model and potential • European-wide positioning strategy and implementation200706-CBC-PresentationTHoM.ppt 2 Visit by SSO Mgr Interview Objectives Consultant(s) finalized Evaluation1st call Proposal Contract Knowledge sent signed Engagement follow-up capturing Running Project status report Product Management Platform Resources Planning Risks Scope Prepared by: Liesbet Vandenberghe Period: from 25/9 to 20/10 week 6 Activities completed this reporting period Activities planned for next reporting period Client Name or LOGO Client Name or LOGO Supplier gave demo. Didier VDH will have a meeting to fine tune the requirements Didier VDH got input to make draft of technical Title of Function/project Title of Function/project requirements Central marketing will have meeting about the next steps and how we see the current project management We have now a list of general requirements tools in this project. Proposal for Interim Management Proposal for Interim Management Month Day, 2007 Month Day, 2007 LAST MODIFIED: Task ID Week Project name Action/task Task owner Follow-up Priority Status Start date Due date Date Comments/issues Decision to take Outstanding Issues/ Main Risks(1) Decision to take(1) description persons finished Issues & Risks Actions Responsible Due Date Decision Decision Maker Due Date Need alignment Meeting Thomas DC November on the real Thomas with needed Philippe. requirements Issue description Decision Decision Due date and which taker budget we can have for it. 1 2 3 4 5 6 7 (1) Format could be simplfy for simple project 8 Project status reports Liesbet 27 December.ppt 3 9 10 11 12 13 14 15 From initial call till 2 first weeks During the engagement Closing the engagement Presentation1 19
  • 20. You are always hiring a whole team of marketing specialistsHiring a THoM consultant isn’t just hiring a person, it’s acquiring expertise: •THoM consultant: your day to day contact Visible • Counselor, Client Manager and Mentor: first help, coaching and stretched goals for Invisible the THoM consultant • All THoM consultants with their specific skills, expertise and experience: the second resort for the THoM consultant • THoM knowledge base (training, career development plan, books, papers, former projects, experience of previous THoMers)Presentation1 20
  • 21. We deliver Marketing expertise in four areas • Market Intelligence • Business & Marketing Planning I. Strategic • Segmentation • Employer Branding Marketing • Branding & Positioning • Sustainability • Pricing • Social Media II. Go-to- • Product/ Brand/ Category • Shopper Marketing Management Market • Customer Relationship • Communication (offline & Management online) • Customer Process Management • Marketing Audit III. Organization & Change • • Marketing Coaching & Training Organization Management capabilities • Customer Experience IV. • Marketing Dashboards Performance • Marketing Performance Management Management • Customer Lifetime Value & ROMI 21Presentation1
  • 22. For whom do we do this?Presentation1 22
  • 23. We have clients from many different sectors (1) ICT & Media Utilities & Resources Financial & Other Services Healthcare & Public Sector Transport & LogisticsPresentation1 23
  • 24. We have clients from many different sectors (2) Consumer Goods & Retail Durables & Industrial GoodsPresentation1 24
  • 25. … talking about the tangible value delivered by The House of Marketing “THoM’s pragmatic approach is to me a key differentiator, as they are able to talk the language of actual executors and to predict or foresee many operational issues we need to tackle.” “We appreciated that the THoM team supported us in (Ronald Hannet, BU Manager) the bottom up approach involving customers, prospects, sales, specialists.” (Danny Vandevyver, Head of Marketing Com Belux) “THoM succeeded in creating change thanks to their straightforward and efficient solutions and approach.” “The added value of THoM is that they do not only deliver strategic advice, but their recommendations (Michael De Koster, Segment Manager) are tangible and can be implemented.” (Luc Deflem, CEO) 25Presentation1
  • 26. Your point of contact The House of Marketing tel: +32 (0) 15 444 000 E-Mail: info@thom.eu The House of Marketing Kardinaal Mercierplein, 2 B-2800 Mechelen Belgium Fax +32 (0)15 444 044 www.thehouseofmarketing.be Join us on LinkedIn Follow us on TwitterPresentation1 26