The soccer mums, empty nesters, experience seekers, PMEBs (Professionals, Managers, Executives, Businessmen). These are some descriptions and marketing jargons commonly used to categorize consumers into segments based on demographic and / or psychographic parameters. It is perceived that people in the same segment will have relatively similar needs and wants, which then lead to similar consumption patterns. If this is truly the case, great news for businesses. For those with a ready product, marketing will identify a target segment who needs it. For others, a segment is first identified and after which, a product created to cater to their needs. From here, the rest of the processes appear relatively straightforward. Marketing resources can be channeled into communication campaigns that reach and appeal to individuals who fall into the targeted group. For instance, TV spots on weekday afternoons are bought to reach retired empty nesters who are perceived to be the only ones watching the tube while others are at work. As an added bonus, spots on these times are normally cheaper as well. All neat and easy. Product launches, accompanied with visuals of attractive and successful executives, are organized in central business districts when the target segment are PMEBs in their suits and ties. All neat and easy. Busy soccer mums can be reached with advertising strategically placed along common routes for school runs. All neat and easy.
But really? Are we right about this long held belief of similar consumption behaviors in similar segments? Are people with all their complexity, warts and all, really so easy to be boxed into categories and with relative accuracy in predicting their purchasing patterns? Are human behaviors so flat and single dimensional like those memorable characters we watched on “Pleasantville”?
The key issue does not lie in the segmentation process (even though it does get questionable when psychographic parameters are used) but the simplistic assumption that everyone in the same category will have the same consumption behaviors and make similar purchasing decisions. Human comes with complex personality, character and what motivates someone can differ significantly from someone else, even if they fall into a similar demographic cluster. “Everyone’s personality is unique” (Karimova, 2018) and we are shaped differently by both our genetic makeup and life experiences. “Like with fingerprints, no two people have the same brain anatomy” (Valizadeh, Liem, Merillat, Hanggi & Jancke, 2018).
If people are so different from each other, how did it ever occur to us that we can simply categorize them into boxes and assume that those in the same boxes will always need the same thing, like the same thing, motivated by the same thing and end up buying the same thing? As Professor of Marketing Malcolm McDonald puts it, “Boy George and the Pope are both ‘A’s in terms of socioeconomic status, but they don’t behave the same” (McDonald, 2011).
Let’s illustrate a case with our soccer mum. This group of ladies spend a significant amount of time sending their school age children to and fro various extra - curricular activities. In the automotive business (which, by the way, swears by segmentation and target marketing), the almost default thinking views this segment as the prime target for mini vans or multi - purpose vehicles. Never mind if these cars are boxy, unsexy and unwieldy. They are the ubiquitous people movers with loads of storage spaces and don’t these soccer mums need to haul their children, occasional school mates and the many knick knacks that come standard with young ones?
Really? Delve deeper into the routines and psyche of every soccer mum and you are likely to find women who have substantial differences in their daily regime, life experiences, personality, preferences and self – image. The only commonality is probably the young ones in tow. There are the soccer mums who hold jobs and they may purchase a different kind of car to suit work requirements. There are the soccer mums who may car share for after – school runs and prefers a small runabout automobile to serve her individual needs. There may be the soccer mum who prefers not to be perceived as one by others and deliberately avoids mini vans in their choice of cars.
We can go on to analyze different behaviors that exist in other segments. But you get the point. So, if not everyone in the same segment are motivated to buy the same products, there is then a high possibility that the flip side is true – that there are people in segments which are untargeted who may be potential customers. Let us begin by looking at just one of such cases.
Back in 2006, the radically designed Volvo C30 was launched with much fanfare and media attention. The little two doors hatchback carried a refreshing look which, can be argued, was ahead of its time by most automotive standards, let alone a design coming from a then still staid Volvo. This model was targeted at the younger, design conscious buyers which was a segment Volvo could not reach. Reviews were generally good and most agreed that this was finally Volvo’s credible crack at this segment. Marketing campaigns were promptly designed to reach younger buyers and the C30 was featured prominently in the hit vampire movie “Twilight”, which in itself was targeted at the younger audiences as well.
A few years after launch, demographic data of C30’s actual customers did not show a clear trend of younger buyers compared to other Volvo models. Some markets even indicated a surprisingly healthy number of retirees in their database. They find the C30 a relatively affordable, easy to drive automobile for their daily runabouts.
There are many other examples where the profiles of actual buyers differ from the targeted segment. By being fixated with reaching and appealing to a particular segment, marketers can actually be missing many potential consumers. Langhe & Fernbach (2018) in their article “The Dangers of Categorical Thinking” argued that “marketers… get obsessed with their target customers ignoring the value that can be extracted from everyone else”(Langhe & Fernbach, 2018). This is the case of over targeting which can do more harm than good for the business. Looking at our case with the Volvo C30, we inevitably look back and wonder how many potential customers Volvo may have lost as the marketing team channel communications and generate awareness among the younger people. There were retirees who would find this model an attractive purchase but unfortunately the product was not marketed into their top of mind awareness. If Volvo’s marketing had not over targeted their marketing efforts, a whole new segment of customers could have opened up for them. The C30 was eventually discontinued in 2012, barely 6 years after its debut. Sales did not meet expectations with only 4,500 units being sold annually (Ernst, 2012). While there may be many factors that led to its demise, an over targeted marketing campaign could have been part of the reason.
With digital media, this situation of marketing myopia is further exacerbated. Unlike traditional medium, most online platforms allow advertisers to specify a high degree of targeting. Parameters can be set according to gender, age, occupation, frequently search subjects and the list goes on, making segmentation narrower than ever before. Digital media owners tout these capabilities as distinct advantages over traditional advertising channels such as TV and newspapers, where marketing money are wasted in a scattergun approach. Ironically, in a relatively unusual move, Facebook advised advertisers that reach can be more important than narrow targeting. It has also given an example where a beer brand made use of Facebook’s narrowing targeting functions to reach their perceived beer drinking segment which is predominantly males. Sales took a dip and it was later discovered that women form a significant proportion of their customer base. Results improved once the parameters were broadened (Langhe & Fernbach, 2018).
There are other evidences where extending reach and crossing into other segments have proved beneficial to brands. In my doctoral dissertation which studies word of mouth, I discovered a previously under explored situation where word of mouth for a brand are spread by non – customers of that brand. These are the people who do not currently own any product from the brand nor have any intention to. Not only does this defies traditional thinking, it was also found that these non – customers play a critical role helping the brand to extend its reach into new segments and increase awareness there.
This is how it happens. Marketing starts off by identifying a target segment for their product and awareness will be created among the people in this group. Simultaneously, word of mouth begin to spread and from many studies done, information will be diffused among people of relatively similar profiles. This is known as homophily, a term created by Paul Lazarsfeld and Robert Merton in 1954, where people tend to mix with others similar to themselves. Homophily is often studied in the field of human networks and empirical evidence indicate that this phenomenon occurs along numerous dimensions including gender, ethnicity, age and professions (Jackson, 2019). This means that after the initial awareness, word of mouth is also being generated among people in the same segment – all according to the marketing playbook.
However, from my research, it was discovered that something unintended was happening simultaneously for some brands. The message caught on among non – customers and they are the ones who created substantial word of mouth, especially on social media. On closer observations, these are also some of the more successful brands in terms of market share. So where is the relationship between non – customers generating word of mouth and high market share? Again, based on concepts grounded in homophily and network theory, these non – customers are likely to have different profiles from the targeted segment. Due to their differences, these people are the “heterophilous social links that allow… information… to cross between cliques and speed up diffusion process” (Kwan, 2018). This means that through them, awareness of the product and marketing messages are able to spread across into other segments. And if what we had discussed earlier is right, broadening the reach into other segments will mean garnering new customers that marketing is not even aware of in their pursuit of narrow targeting. This may be one of the reasons these brands enjoy higher market share.
Figure 1 below is a simple illustration of information flow through a network. Here, each node represents an individual. The nodes in black are the people in the targeted segment. In line with homophily theory, they are connected and interacting with each other, forming a relatively closed community. The two red nodes are non – customers who may not be as well connected and entrenched in the community as the rest but play critical roles by virtue of knowing two persons in a different segment denoted in blue. As such, through these two non – customers, word of mouth is able to diffuse to a new segment of people.
Figure 1: Information Flow Through a Human Network
There are good evidences to argue for a case of untargeted marketing and this is certainly an important area that deserves further research. This is very much against the grain of conventional thinking which not only continue to preach the importance of segmentation, but encourage even narrower targeting with new digital capabilities. This practice has been taken for granted for so long by so many businesses that it is important for more studies, grounded by robust empirical data, to be conducted.
The results may surprise us and have the potential to change the way we look at marketing communications significantly. In the end, Pleasantville may truly belong to the silver screen. And only the silver screen.
Victor Kwan
References
Ernst, K. (Oct 2012). “Volvo Kills Off Its C30 Compact Hatchback”. Retrieved from https://www.motorauthority.com/news/1079828_2013-gallardo-spyder-2014-mercedes-cla-45-amg-spied-record-space-jump-todays-car-news
Jackson, M.O. (2019). “The Human Network. How We Are Connected and Why It Matters”. Atlantic Books, London.
Karimova, H. (2018). “Personality & Character Traits: The Good, The Bad and The Ugly”. Retrieved from https://positivepsychology.com/character-traits/
Kwan, Y.H. (2018). “Motivations to Engage in Word of Mouth From Non – Market Participants: A Study Using Automotive Business as the Field of Investigation”.
Lange, B.D. & Fernbach, P. (Sep – Oct 2019). “The Dangers of Categorical Thinking”. Harvard Business Review. Volume 97, Number 5.
McDonald, M. (March 2011). “Why So Much Segmentation is Rubbish”. Retrieved from https://www.research-live.com/article/opinion/why-so-much-segmentation-is-rubbish/id/4004672
University of Zurich. (2018, July 10). Every person has a unique brain anatomy. ScienceDaily. Retrieved September 19, 2019 from www.sciencedaily.com/releases/2018/07/180710104631.htm
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