2. Presentation F
P i Framework
k
What we won’t do:
won t
Teach “Research 101”
Teach or discuss analytic techniques
What we will do:
Identify “pitfalls” that most often derail segmentation studies
Provide tips on how to maximize the utility of a segmentation study
2
4. Why S
Wh Segment?
?
Customers rarely have identical “needs” and companies
needs
cannot be all things to all people
Segmentation g p consumers based on p
g groups purchase/use/Rxing
g
relevant behaviors, attitudes, characteristics and needs
Marketing Approaches
Undifferentiated Segmented Atomized
Mass Marketing g Targeted Marketing One-to-One
One to One Marketing
4
5. Every Segmentation is Similar
E S i i Si il
Common Goals
Obtain greater customer understanding
Identify competitive advantage/marketable PoD
Achieve greater customer relevance
Maximize marketing efficiencies given ever-shrinking resources
Align brand goals w/ marketing strategy/tactics
$$ Grow share/revenue $$
PoD: Point of Differentiation 5
6. Every Segmentation is Different
E S i i Diff
Unique Goals
Every brand has its unique set of challenges
Segmentation must be designed to address the unique challenges
of the brand
Examples:
Generic Entry
G i E t
Managed Care Pressures
New Product Launching
Overcrowded M k t
O d d Market
6
7. Traditional A
T di i l Approach
h
Heavy reliance on statistics to “discover” segments
discover
Segmentation precedes (and is used for) strategy
development
Methods for how to implement segment tactics considered
AFTER completion of the segmentation
Resulting i
R lti in:
Segmentation that may or may not be linked to core competencies
Segment drivers are unrelated to marketing issues / capabilities
g g p
Segment opportunity based on “presumed” rather than assessed
potential
Limited actionability and failed expectations
7
8. Proposed N A
P d New Approach
h
Segmentation ought to be constructed to meet specific
brand objectives and challenges
“Tie-backs” to planned/potential marketing tactics should be
built into the study design to ensure “actionability”
Test potential “solutions” to estimate opportunity
Select
S l t analytic techniques as is appropriate, proceeding
l ti t h i i i t di
from simple to complex techniques
Tell a compelling story about how the brand can reach its
objective and overcome challenges
Linked to core competencies
Provide “tools” for
P id “t l ” f marketing application
k ti li ti
8
10. Segmentation E
S i Example
l
Objective: Segmentation that provides direction for developing
promotional effort; learn what role BRAND plays in management
“Habits and Practices – A/O Type Survey
Habits Practices”
attitudes abt DISORDER & Tx (> 100 items)
character of disorder
product use patterns
customer characteristics/demos Develop Attit di l
D l Attitudinal
benefits desired Factors
evaluation of market offering
use of informational channels Apply Clustering /
pp y C uste g
Grouping Technique
Self Blaming
Self-Blaming Reluctantly Deprived but
Rx Rejecter N t
R R j t Naturalist
li t Rx Receptive
R R ti
and Ashamed Reliant “Dealing”
10
11. Segmentation E
S i Example
l
Factor Scores by Segment
y g
1.5
1
0.5
0
-0.5
-1
-1.5
Factors: Product Rx Multiple Stress Pro-OTC Pro-Rx Advocates Personal Guilt and
Reliant Cautious Impacts of “Natural” Impact Shame
Rx Receptive Reluctantly Reliant Self-Blaming
Self Blaming and Ashamed
Naturalists Rx Rejecters Deprived but “Dealing”
NOTE: Shows acceptable within-group homogeneity11 across-group heterogeneity
and
12. Segmentation E
S i Example
l
Seg e s
Segments by S e, CO
Size, CONDITION Se e y a d Rx Use
O Severity and
More
Rx Receptive
p
M
Highlights the relationship
Self-Blaming &
between CONDITION
severity and Rx Use
se
Ashamed
% Rx Us
Reluctantly “Need” drives Rx Use
Reliant
Naturalist
Less
Deprived by
“Dealing”
Rx Rejecter
j
Less % Severe More
12
13. Segmentation E
S i Example
l
Seg e s
Segments by Key Op o s
ey Opinions
More
Rx Receptive
NEED + Risk : Benefit
analysis discriminates
ived Need for Rx Assistance
Reluctantly Reliant receptivity to Rx option
Rx Rejecter
R
Self-Blaming
and Ashamed
Naturalist
Percei
Deprived but “Dealing”
Less
Less Rx Benefits Outweigh Risk More
13
14. Segmentation E
S i Example
l
Product Use Index by Seg e s
oduc de Segments
1.5 1.41
1
Number of OTC meds
mber of Meds - Mean
0.50 0.58 Number of Rx meds
0.5
0.15
0.07
0
-0.15 -0.10
-0.16
-0 33
0.33
Num
05
-0.5 0 37
-0.37
-0.47
-0.57
-1
Rx Receptive Reluctantly Self-Blaming Naturalist Rx Rejecter Deprived but
Reliant & Ashamed “Dealing”
Dealing
Selected Targets
14
NOTE: Current usage patterns used as proxy for potential
15. Patient S
P i Segmentation Example
i E l
Rx Receptive: Summary Recommendations
Main Challenge: Although BRAND enjoys high share in this group,
expanding share will require promoting benefits relative to other
MOAs; high concomitant OTC use
Recommended Response Strategy: Differentiate BRAND from
MOAs on efficacy, safety and side effects
efficacy
Messages for market penetration/expansion:
Effectively managing CONDITION is important; BRAND is highly
effective, safe
effective safe, with fewest side effects
Media Preferences
Print ads may be most effective for communicating the substantive
information they require to decide
15
16. Assessing “Action-ability”
A i “A i bili ”
Traditional Criteria
Differentiated
Real / Reliable
Relevant
Identifies target segments
Make “marketing sense”
g
Reachable
Is this enough?
16
17. Gaining G
G i i Greater “A i
“Action-ability”
bili ”
Today s
Today’s Additional Requirements
Provide information that supports strategy for achieving brand goals
Provide estimates of segment opportunity and potential ROI to
better f
b tt focus marketing efforts
k ti ff t
Provide a mechanism for guiding the development of tactics and
media plans
Provide targeting tools
17
18. Use Segmentation P
U aS i Process
1 2 3 4
Establish the Animate and
Prepare Test /Analyze
Framework Implement
• Conduct Discovery • Build the Sampling • Develop Analytic • Create Profiles
Frame Approach
• Convene the Team • Build Segment
g
• Design the Qnr Identifying Tools
• Kick-Off the Project
• Link Segment
• Create the
Results to Media Db
Segmentation
p
Blueprint
18
19. Re-Segmentation E
R S i Example
l
Re-segment
Re segment consumers on dimensions that differentiate
willingness to use BRAND
Size and characterize segments
Identify / Prioritize segments such that:
BRAND penetration / uptake is optimized
Marketing productivity and ROI is maximal
Obtain information that will guide messaging and promotional
development for generating trial and usage of BRAND
NOTE: Objectives are re-defined in terms of furthering the brand’s ultimate goals
19
20. Re-Segmentation E
R S i Example
l
Define the Potential Patient Population
US Female Population
109.2 MM Past Year Sufferer
59.1 MM
No CONDITION
Non-Qualified
Sufferers 15%
55% 45%
Potential Patient
Qualified 30% Population
Sufferers 32.8 MM
Yes CONDITION Must determine inclusion criteria
Past Year
and comprised the potential
customer pool
20
21. Re-Segmentation E
R S i Example
l
Identify strategies for achieving brand growth
Must be a viable strategy for brand
32.8 MM Qualified Sufferers
Maintain/Cultivate
30%
Current
BRAND User
Non-Rx
80% 20% Rx Users
Users 70%
26.2 MM 6.6 MM
Competitor
User
EXPAND Rx EXPAND
MARKET SHARE Switch
Informs Sampling Plan
21
22. Re-Segmentation E
R S i Example
l
Survey Content
Experience of condition and Hx of management
Needs identification
Drivers of a medication choice
Perceived benefit of resolving CONDITION
Evaluation of BRAND/Competitors
p
Barriers to Rx User/BRAND use
Solutions to barriers and the degree to which potential solutions
address barrier
Linking questions to CRM and media database
22
23. Re-Segmentation E
R S i Example
l
Needs, Rx Motivations
Needs Rx-Motivations, Brand Appeal Barriers Potential for
Appeal, Barriers,
Overcoming Barriers Differed by Rx Status/Hx
Rx status linked to strategy
Potential Strategies
Maintain & Switch
Cultivate Greater Competitor Attract Non-
Usage Users Rx Users
Segmentation Conducted for Each Strategy
g gy
Segments Segments Segments
23
24. Re-Segmentation E
R S i Example
l
Targets were chosen within strategy group
Brand Team owns the final prioritization
A. Expand Share B. Expand Market
Maintain/Cultivate
M i t i /C lti t Switch
S it h Attract
Att t
Competitor High BRAND
BRAND Loyal Loyal Potential
BRAND Potential Switchers Indeterminate
Vulnerable BRAND Appeal High BRAND Potential
Potential Switchers Low BRAND
BRAND Appeal Low Potential
24
25. Re-Segmentation E
R S i Example
l
Profiles included not only segment size but estimates of
BRAND’s “real” potential
Satisfaction with BRAND Evaluation
Current Approach
Degree to which Barriers Perceived Need
can be Overcome
Apply Established Algorithms for Estimated Potential
Estimate Segment Potential
% and # of patients expressing high
likelihood to stay on/take BRAND
25
26. Re-Segmentation E
R S i Example
l
Segment scoring tools created for identifying segment
members in:
CRM patient registry
Media databases (e.g., MARS, Simmons)
Provides in-depth media usage
information used to develop media plans
Screening subsequent research participant for segment specific
follow up
follow-up research
26
27. Re-Segmentation E
R S i Example
l
Segmentation Outcomes
Segmentation of patients along dimensions that impact the brand’s
potential for growth
Estimates f
E ti t of segment’s “ l” potential and di ti about which
t’ “real” t ti l d direction b t hi h
segments might be most responsive to promotional effort
Linkages to MARS database, enabling the Development of Tactics
and M di Pl
d Media Plans
Multiple targeting tools for identified “uses” of the segmentation
27
29. Segmentation Phil
S i Philosophy
h
Segments are not “out there waiting to be found; there is
out there”
not “one right way” to segment a market
Statistical prowess and analytic tools alone are not enough
There are no “cookie cutter” or “black box” systems that will
do an adequate job
Segmentation must be custom fit to your brand’s goals,
S t ti tb t t b d’ l
markets and competitive situation
Segmentation research must be goal directed
29
30. Segmentation P
S i Process
1 2 3 4
Establish the Animate and
Prepare Test /Analyze
Framework Implement
• Conduct Discovery • Build the Sampling • Develop Analytic • Create Profiles
Frame Approach
• Convene the Team • Build Segment
g
• Design the Qnr Identifying Tools
• Kick-Off the Project
• Link Segment
• Create the
Results to Media Db
Segmentation
p
Blueprint
30
31. 1 Prepare
2 Establish Framework
Plan f “ i
Pl for “action-ability”
bili ” 3 Test / Analyze
4. Animate / Implement
Identify end users of the segmentation and learn how they
will be tasked to use the results
Know what marketing tactics are available for advancing
brand strategy
To the extent possible, build in methods for tactical utility
“Begin with the end in mind”
31
32. 1 Prepare
2 Establish Framework
Conduct Di
C d Discovery 3 Test / Analyze
4. Animate / Implement
Re/Evaluate results from existing research to inform the
brand’s challenge
Primary and Secondary Sources
Identify significant “gaps” in knowledge and conduct
research to “fill in” gaps
Typically qualitative but can be short “quant” surveys (e g screener
qualitative, quant (e.g.,
or omnibus studies)
Confirm the boundaries of the target market
Market sizing research
Target list development
32
33. 1 Prepare
2 Establish Framework
Convene the “Team”
C h “T ” 3 Test / Analyze
4. Animate / Implement
Team Members
Leveragable segmentation
Brand VP / Director requires a strong partnership
Product M
P d t Managers between all charged with
advancing the brand
Medical
7 – 9 Core Team members
Regulatory ideal; group size beyond 12 –
Market R
M k t Research h 15 tend to lose effectiveness
Competitive Intelligence
Managed Care Director
Ad A
Agency
Sales Leadership
33
34. 1 Prepare
2 Establish Framework
Study “Kick-off”
S d “Ki k ff” 3 Test / Analyze
4. Animate / Implement
Create the segmentation blueprint informed by strategy
blueprint,
34
35. 1 Prepare
2 Establish Framework
Sampling Frame
S li F 3 Test / Analyze
4. Animate / Implement
Patient Segmentations All sampling frame records are pre-
pre
appended with data enhancement
At minimum, geo-demographic
and CONDITION data
Syndicated segmentations
PRIZM
P$YCLE
Other “list” characteristics
list
Pre-appending data enhancements
ensures 100% coverage of data to
be used for creating a DB scoring
g g
model
Database variables also offer
potential segmentation variables
35
36. 1 Prepare
2 Establish Framework
Design h Survey
D i the S 3 Test / Analyze
4. Animate / Implement
Design to “test” and address “hypotheses”
test hypotheses
Potential segmentation dimensions
Test tactical “solutions” to brand growth barriers and
quantify incremental business that can be realized from
addressing the barrier
Include Qs that provide linkage to tactical DBs
36
37. 1 Prepare
2 Establish Framework
Segmentation A l i
S i Analysis 3 Test / Analyze
4. Animate / Implement
Traditional Approach: Exploratory and statistically-driven
statistically driven
37
38. 1 Prepare
2 Establish Framework
Segmentation A l i
S i Analysis 3 Test / Analyze
4. Animate / Implement
New Approach: Objec es d e
e pp oac Objectives-driven
Guided Analysis
Analyses conducted to test/investigate hypotheses about
y g yp
Segmentation Blueprint
t
what advances brand’s objective
1 Inputs should include data from primary research and
available databases
Segments are formed based on direction contained in the
2 segmentation blueprint
“Grouping” technique selected as is appropriate for the data
Result reviewed for refinement/revision to achieve maximal
3 utility for furthering brand objectives
38
40. Implementation
I l i
Profiles provide foundation for positioning work
Typing tools / Database scoring
Sales Targeting
Media Planning
40
41. Implementation
I l i
“Best” segmentation will fail unless the company is committed
Best
to and capable of executing segmentation strategy
The implementing company must:
Have the discipline to concentrate resources on high potential target
segments and ignore others
Understand how to tailor persuasive messages for each target
p g g
segment
Exercise skill in using information to make media buys or effective
direct marketing p g
g programs
Possess the capability to customize marketing mix for target segments
for optimal penetration
41
42. Summary
Market segmentation must be designed to meet specific
brand objectives and overcome specific challenges
Market segmentation research must be carefully planned to
ensure maximal actionability once completed
Segmentation as a marketing approach must be supported
at all levels of an organization
42
43. For more i f
information, please contact . . .
i l
Anthony Bogle
Director, Market Research,
Sanofi-Aventis
Susan Lee Simpson Thomas M. Mills
M
VP, Client Services, Burke Statistical Consultant, Burke
513-564-8382 513-564-8381
susan.simpson@burke.com
susan simpson@burke com thomas.mills@burke.com
thomas mills@burke com
43
