2. Market Segmentation
By Galilee Faith Dizon
Ref: Marketing Management 14th Edition Philip Kotler and Kevin
Lane Keller
Global Marketing by Johny K. Johansson
16. Macrosegmentation
• Infrastructure
• Rate of growth in GDP
• Political Affiliation
• Geographic Data
• Sociodemographic Data
• Population size and character
• Disposable Income levels
• Educational background
• Primary Language
• Level of development
20. Case Analysis
• The Lego Group provides a prime example of how insightful market
segmentation and a fundamental understanding of different consumer
personas can lead to successful social media marketing. By carefully
targeting its intended audiences and using the social media platforms
where these consumers actively participate, The Lego Group is able to
effectively reach its customers and offer them the kind of online
experience that helped win their Lego Brick the “Toy of the Century”
award, one of most coveted honors in the toy industry.
21. History
• The Lego Group began in a carpentry workshop in Billund, Denmark,
purchased in 1916 by the founder of the company, Ole Kirk
Christiansen.28 However, it wasn’t until furniture sales slumped during
the Great Depression that the company moved away from making chairs
and tables to manufacturing toy versions of the furniture. When plastics
become available in Demark after World War II, the company began
producing plastic toys.
23. Six Distinct Personas
• 1. Lead Users—people LEGO actively engages with on product design
• 2. 1:1 Community—people whose names and addresses they know
• 3. Connected Community—people who have bought LEGO and [have] also
been to either a LEGO shop or a LEGO park
• 4. Active Households—people who have bought LEGO in the last 12 months
• 5. Covered Households—people who have bought LEGO once
• 6. All Households—those who have never bought LEGO
24. Six Distinct Personas
• Moreover, proper customer segmentation and persona profiling enable the
Lego Group to concentrate its efforts on the social media platforms with the
highest number of brand active residents.
25. Six Distinct Personas
• In the words of Lars Silberbauer, the first global social media strategist for
the Lego Group, “What platform you use depends on your target audience
and the product you are marketing.”
26. Result
• In 2010, the Lego Group became the world’s fourth largest toy manufacturer,
capturing approximately 6.9% of the global market share of toy sales and
continues to sustain a high growth rate, as well as showing a net profit of
about 688 million dollars for the year.
Market Segmentation is the process of dividing a market into well-defined slices. A market segment consists of a group of customers who share the same set of needs and wants.
Clothing store,
Mcdo, Nike, Microsoft
Harry potter, etc
Not everyone who buys a product has the same needs or wants the same benefits from it.
Loyalty Status
Hard core users
Split loyals
Shifting loyals
Switchers
Networking, Credit Cards, SM advantage cards,
A market segment should be:
Measurable: Market segments are usually measured in terms of sales value or volume (i.e. the number of customers within the segment). Reliable market research should be able to identify the size of a market segment to a reasonable degree of accuracy, so that strategists can then decide whether, how, and to what extent they should focus their efforts on marketing to this segment.
Substantial: Simply put, there would be no point in wasting marketing budget on a market segment that is insufficiently large, or has negligible spending power. A viable market segment is usually a homogenous group with clearly defined characteristics such as age group, socio-economic background and brand perception. Longevity is also important here: no market segmentation expert would recommend focusing on an unstable customer group that is likely to disperse, or change beyond recognition within a year or two.
Accessible: When demarcating a market segment, it is important to consider how the group might be accessed and, crucially, whether this falls within the strengths and abilities of the company’s marketing department. Different segments might respond better to outdoor advertising, social media campaigns, television infomercials, or any number of other approaches.
Differentiable: An ideal market segment should be internally homogeneous (i.e. all customers within the segment have similar preferences and characteristics), but externally heterogeneous. Differences between market segments should be clearly defined, so that the campaigns, products and marketing tools applied to them can be implemented without overlap.
Actionable: The market segment must have practical value – its characteristics must provide supporting data for a marketing position or sales approach, and this in turn must have outcomes that are easily quantified, ideally in relation to the existing measurements of the market segment as defined by initial market research.