My first real exposure to a marketing segmentation study was with AT&T Business Communications Services back in the 90s. AT&T created 23 different product offerings, or packages, to meet the specific corporate telecommunications needs of various large customer profiles. The revenue stream was in the billions. That’s a lot of segments.
Segmentation is a great marketing undertaking. It forces sellers of product and services to drill into customer usage and see patterns. Creating packages of products to meet that usage, surrounded with specially focused levels of care, and pricing tailored to that package is what segmentation is all about. Pay only for what you need — because one price and level of service does not fit all.
A brand plan goes the other way. It does have to fit all. So while segmentation people need to see patterns among discrete users groups, brand planners need to see commonalities among all user groups. When Peter Kim, a chief strategy office at McCann-Erickson in the 90s, talked about brand targeting he used the word “remassify.” His targeting rigor started by understanding all of a brand’s targets, one by one. Get to know them intimately, he suggested. Understand how they use the product. When? Why? After amassing all the different targets, he put them back together to see what traits and care-abouts they shared. Remassifying into a segment of one. From this learning emerged stimulus for the brand brief claim. For brand action or what some today might call brand activation. So you tell me, what comes first the segments or the brand plan? Peace!