Segmentation Video Series: Episode 14
Applying Segmentation To New Product Development

 
Segmentation: Episode 14 Transcript

Hi, I’m Felicia Rogers, Executive Vice President at Decision Analyst with the Segmentation Segment. You know, new product work is some of the most exciting and rewarding work we get to be a part of as brand strategists and marketers, and so today we’re going to talk a little bit about how we can use segmentation results for new product development.

  • Market Segmentation
    There are a couple of primary uses where segmentation can be applied to the new product or service development process. A common approach, or a common application is for consumer profiling to help guide targeting efforts, and message development. Once segments are identified, we can profile them in a wide variety of ways to give us a really deep understanding of who they are, what it is that drives their attitudes and behaviors, and how can we reach them and effectively communicate with them. So, with this knowledge kind of forming the foundation, we’re able to formulate really compelling messages to reach these consumers, identify imagery that would resonate with them, and this can be done across a variety of segments.
     
 
  • Targeting an Audience in Segmentation
    We once identified a segment of people that we called ‘armchair only health nuts.’ These were people who ate a healthy diet, they were focused on heart healthiness, they consumed organic fruits and vegetables, they were really into vitamins and supplements, but they weren’t into exercising, and they really weren’t very active at all. So, they had hopes and dreams and they were they were trying to be healthy but they really weren’t meeting their goals.

    For a brand to reach this audience, they would need to go out into the market with aspirational types of health messages to speak to the goals, and again the hopes and dreams of these ‘armchair health nuts,’ but a brand would also need to know that this is not a good target audience for the latest exercise equipment or programs.
 
  • Needs Based Segmentation
    Another really interesting product-focused way of using segmentation results is to identify unmet needs and opportunity areas—‘white spaces,’ if you will. We often do this through needs based segmentation in which the research is focused very heavily on consumer needs and desires, often also trying to identify usage occasions. We know that consumers use products specifically to meet those certain usage occasions and oftentimes to help them establish or meet with a certain state of mind. A really great example of this is the alcohol beverage category, where drinking occasions are really often centered around a certain need-state. We can think of examples like wanting to relax and unwind at the end of a long stressful day, and also you know, all the way at the opposite end of the spectrum, oftentimes people are drinking to loosen up and have a lot of fun maybe even get a little bit crazy.
 

So, again, we know that they’re using various products that meet those needs and are good on those certain occasions, and perhaps this is an opportunity. What if we focused on—or we found a segment of people—who were looking for drinks for those real high-energy types of occasions, but they had a very strong demand for a high-end, very sophisticated product that would meet those needs, and maybe they’re telling us that those products really don’t exist right now. So we may have just uncovered a really great opportunity and positioning for a new product that could be very successful on the market.

Really there are several ways we can use segmentation to help drive the new product development process, and the key here is to be focused on and creatively thinking about our business objectives, and how to reach the target audience by learning everything we can about who they are and how to communicate with them.

With that, I’d like to say thank you today for joining us for this episode of the Segmentation Segment.

Contact Decision Analyst

If you would like more information on Market Segmentation, or if you have any questions, please contact Felicia Rogers by emailing frogers@decisionanalyst.com or calling 1-817-640-6166.