Agora Media Group Innovation Blog

Is the end of traditional marketing segmentation in sight?
The process of segmentation is being reviewed and reshaped due to the Internet and available technologies which refines it.
This article continues where we left at the Personalization, Customization, Collaboration – Future Business Trinity article.
Personalization, Customization and Collaboration are the effects and executions arising from Self-Segmentation which takes place during the strategic analysis and moulding of the organization.

Segmentation within the marketing strategy
Segmenting is the first phase within the Marketing STP process, which is followed by Targeting and Positioning.
Segmentation strategies are often derived from market researches which define segments by making use of the statistical technique called cluster analysis. The challenge can be found here when making use of cluser analysis, it’s difficult to identify the segments in the real world due to its statistical characteristics.
Even if you don’t have the resources to conduct a market research, and segmenting the market is achieved through other means, it still remain passive or static characteristics which define segments. These static characteristics can be found within the demographic, geographic and psychographic variables.

The New Consumer
Unfortunately consumers are more complex, they are dynamic, evolving and simultaneously belong to a wide range of segments. The so-called New Consumer defined by Lewis and Bridger, seeks authenticity, is individualistic, independent and well-informed. This new type of consumer could explain the decreasing output by market researches who de-segments himself by actively destroying patterns.
Besides the complex human nature, external factors like the Internet influence the decision making cycle, by enabling the consumers to morph along its online journey being constantly in touch with the available information and other people. Segmentation seen from the New Consumer point of view is becoming an obsolete term. They can’t be predicted or labeled.

Self-segmentation by participatory media
The participatory Web is the eminent medium which enhances self-segmentation due to the co-creational powers it embodies, which effects the value proposition and the value chain of the company.  Customers who are able to dynamically define themselves towards companies which advances the relationship bi-directional, is the self-evident power that the concept beholds.
Self-segmentation is successful due to the active participation by consumers, which have the goal of achieving the characteristcs of the New Consumer as described above. Next to the self-segmenting techniques which are discussed in the Personalization, Customization, Collaboration – Future Business Trinity article , I want to emphasize the important role of social networks within this context.
Consumers are segmenting themselves when participating in social networks, based upon interests, needs and so on. Based upon the interaction between each other, the different roles a person can have within communities and the content which is generated by a user, it all can be analyzed to create a self-segmented model. An important role to do this are Social Network Analysis (SNA) tools which are able to give insight within the vast amount of information which is locked in a network.

The Axiom of Self-segmentation
The initial comment made in this article, that traditional segmentation is ending, has a long way to go, precisely because the organization has to transform fundamentally in order to make fully use of self-segmentation benefits. Outsourcing the value-proposition to the consumers is a new ball-game which changes the internal structure and focus.
Next to the organizational challenges that self-segmentation brings along, impact on the evolution of the New Consumer -in relation to the Web- and of course customer behavior must be analyzed. Just because technology offers a wide range of new abilities, it does not necessarily mean that consumer behavior is changing by it in full potential. Generation Z will grasp the offered opportunities better, as these consumers are grown up by ubiquitous technology.
The advantages of self-segmentation therefore are self-evident from the marketing and technological point of perspective, self-segmentation offers definately new ways of customer satisfaction, retention and engagement.

The fact is that most consumers are not making use of the self-segmentation abilities which are offered to them, i.e. will customer behavior intrinsically change just because technology is evolving? That needs to be proven.

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