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Label-Making and the Myth of Market Segmentation

A couple of years ago, in an effort to curb use of disposables around the office, venerable Communispace office manager Janet Toole decided to give everyone in the company a mug and water bottle bearing our logo. Label-makers were provided around the office so we could identify our wares. During a meeting a few months later, I happened to notice that the label on fellow blogger Pete Chapin’s mug was strikingly similar to the one that I—in an admittedly unauthorized use of company supplies (sorry, Janet!)—had recently affixed to my monitor (see picture, below).

What does this tell us (other than that both Pete and I are incredibly witty)? We inherently reject the idea that it’s useful, or even possible, to classify people in simple terms.

I’m a 28-year-old female professional living in Boston. I’ve spent the first six years of my career working at a social media company. From this demographic info, you might assume certain things about me, my lifestyle, my media consumption, my shopping habits, the brands I like and the products and services that might appeal to me. You might even put me into a neat little market segment called “Maturing Millenials” or “Transitioning Twenties.” And, in my case, you’d probably be wrong. In my personal life, I’m not really involved in social networking and prefer my media the old-fashioned way – TV and radio. Yes, real, live radio. Sorry, but I’m missing your banner ad over on Facebook.

That’s just one personal example, but we’re all improbable in our own way, aren’t we? Here at Communispace, it’s not just personal, but business, where labels are concerned. We spend a lot of time—and, at their request, a lot of our clients’ money—finding the right community members based on elaborate, finely-honed market segmentation schemes. Lately, we’ve both been wondering what it’s all worth—and if we’re asking the right questions. In this new world of the Long Tail, niche markets and hyper-personalization, what is the place of traditional segmentation schemes? Is it helpful or even advisable to attempt to segment customers into broad buckets?

We’re not the only ones following this stream of thought lately. Last week I attended an ESOMAR webinar featuring Jochum Stienstra, who noted that, “We can’t sort people like marbles.” In the presentation (based on his paper, “The myth of segmentation, or how to move beyond”) he stressed that, as the predictive value of market segments decreases, we need to let go of strict buckets and take a more dynamic approach to understanding consumers.

We are all unique individuals, and increasingly come to expect the ability to customize and personalize all facets of our lives. So, when marketers fail to take into account the nuances of our personalities, the result is messaging that feels hollow. We see one example of this when brands try to target the ever-expanding Hispanic market. As Communispace’s upcoming research report, “¿Me Entiendes?: Revisiting Acculturation” (due out next month) will show, attempting to define this group based on traditional notions of language and identity fails to take into account the nuances of this very diverse group – but more on that in an upcoming post. And later this year, we’ll be engaging some of our clients in further exploration of their current market segmentation frameworks and how they play out in our communities.

For now, I’m curious to hear from some marketers out there … How does your organization employ segmentation schemes? What successes or challenges have you faced? How do you see market segmentation playing out in the future?

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