This document summarizes key points from a presentation by Ziya Boyacigiller on circumstance-based segmentation. It discusses how most new products fail because companies define segments based on customer demographics rather than the circumstances or "jobs to be done" when customers make purchases. Circumstance-based segmentation involves understanding the alternatives, pains, and functional/emotional needs customers have when they encounter different circumstances. Defining segments this way allows companies to create products that truly meet customer needs and pain points.

1. Circumstance Based
Segmentation
Ziya G. Boyacigiller
This presentation was created and given by Ziya
Boyacigiller who was leading Angel Investor and a loved
mentor to many young entrepreneurs in Turkey. We have
shared it on the web for everyone’s benefit. It is free to
use but please cite Ziya Boyacigiller as the source when
you use any part of this presentation. For more about
Ziya Boyacigiller’s contributions to the start-up Ecosystem
of Turkey, please go to www.ziyaboyacigiller.com

2. Design Thinking
& Innovation
Özyeğin Üniversitesi
Master in
Entrepreneurship
2012 & 2013
To gain a solid foundation in
entrepreneurial innovation.
Covering the process of developing
a business-idea into a viable
business opportunity.

3. Circumstance Based
Segmentation
Ziya G. Boyacıgiller
Sabanci Universitesi
Yonetim Bilimleri Fakultesi
Ref: Innovator’s Solution, Christensen et al.

4. Ziya G. Boyacigiller (c) 2005
EMBA 4
Most Attempts to Create
Successful Products Fail
 60% fail during development
 40% of those making it to market fail
 ¾ of money spent is lost !
 Yet failures are not random, they are
predictable and avoidable.

5. Ziya G. Boyacigiller (c) 2005
EMBA 5
“Only if marketers define market segments that correspond to
the
circumstances
in which customers find themselves
when making purchasing decisions
can they accurately theorize which products
will (sell) connect with their customers.
Otherwise, they fail since they aim their products to phantom
targets.”

6. Ziya G. Boyacigiller (c) 2005
EMBA 6
Segments are Created for Convenience
Number of
Customer
Pros & Cons
Single
(Custom Built Car)
Pro - Best if you define your product/service for a single customer.
You can include only those features in your product/service that
this customer wants, thus achieving complete customer
satisfaction.
Con – You may need more than one customer to run a feasible
business.
Segment
(Rolls-Royce)
Pro – Creative idea, emerged to define your product/service for a
large group of customers with similar needs.
Con – For some customers the product will be under/over defined.
Hard to find a way to group the customers properly.
Masses
(Ford Model-T)
Pro – Best to maximize the sales potential of your product/service
Con – You need to include the common denominator features that
will appeal to the masses, and risk leaving out features for some
customers.

7. Ziya G. Boyacigiller (c) 2005
EMBA 7
…requires an understanding
of the circumstances in
which customers buy or use
things.
Predictable marketing…

8. Ziya G. Boyacigiller (c) 2005
EMBA 8
Milk Shakes

9. Ziya G. Boyacigiller (c) 2005
EMBA 9
Alternatives & Pains
Circumstance Alternatives Pains
Morning
breakfast
1. Bagels
2. Egg sandwich
3. Coffee
4. Doughnuts
5. Banana
1. Crumbs
2. Greasy
3. Hungry
4. Makes hungry
5. Too fast to eat
Snack for child
Pick-me-up
while shopping
….

10. Ziya G. Boyacigiller (c) 2005
EMBA 10
Summary:
Circumstance-Based Segmentation
 Customers have ‘jobs’ that need to get done.
 Then customers look for products or services
they can ‘hire’ to get the job done.
 The functional, emotional, and social dimensions
of jobs constitute the circumstances in which
they buy.
 Circumstances is what we need to analyze in
segmentation, to understand if a product will
sell, rather than the customers themselves.

11. Ziya G. Boyacigiller (c) 2005
EMBA 11
Use the question “Why?” to
identify the jobs
Example:
C: I need a blue fabric.
P/M: Why?
C: To use next to the yellow fabric.
P/M: Why?
C: I’m sawing a flag.
P/M: Why?
C: Because I can’t find a ready made flag.
Conclusion:
The underlying need is not for a blue fabric, but for a flag… The
“job” is get a flag, alternatives offer no ready-made flag (“pain”),
so what is “hired” is the closest alternative: “saw my own flag”.
(C: customer, P/M: Product Manager)

12. Ziya G. Boyacigiller (c) 2005
EMBA 12
How you view the market for handheld
devices will determine what product
features you consider to be relevant
Product View Demographic
View
Job-to-be-Done
View
Market
Definition
Handheld wireless
devices
Traveling sales
person
Use small snippets of
time productively
Competitors Palm, treo, clie,
iPaq, wireless
phones
Notebook PCs,
internet access,
wireless & wireline
telephones
Wireless phones,
WSJ, CNN Airport
News, doing nothing,
listening to boring
presentations
Features to
Consider
Digital camera,
word, excel, outlook,
voice phone,
organizer, …
Wireless internet
access,
downloadable CRM
data/functionality,
online stock
trading, e-books,
email, voice
Email, voice mail,
voice phone, headline
news, simple-single
player games,
entertaining top-ten
lists, always on, SMS
top news, …