I particularly enjoy segmentation studies because they provide opportunities for creative exploratory modeling.
Whenever we attempt a market segmentation, we try to partition the full target population into distinct clusters with defining needs, perceptions, beliefs, values and social influences etc., and therefore are likely to exhibit similar behavior patterns.
Common objectives met by market segmentation include new product development, market needs assessment, competition assessment, and promotional strategy development or evaluation. Clearly, these objectives are not mutually exclusive; and can be served by the same segmentation solution.
Market differentiation that results from a good segmentation solution can refine targeting in promotional strategies & messaging, inform strategic pricing and bundling by segments, raise or reduce reliance of alternative distribution channels and strategies, discover hidden opportunities in niche segments, and inform decisions on how to prioritize or reconcile conflicting needs across different segments.
I have completed segmentation studies on diverse audiences including:
- clinicians, pharmacists, and patients across multiple therapeutic areas
- health insurance plan beneficiaries
- bank customers
- users of a curated online sales site
- artisans & designers on an e-commerce site
- small business owners
- school teachers
- park visitors
- non-profit program participants
My approach to segmentation can be summarized in the following steps:
- Clear operationalization of latent constructs in valid and reliable measures
- Examine variables of interest with focus on dispersion statistics
- Select optimal scale for each latent construct in line with principles of Psychometrics
- Execute clustering algorithms including k-means, latent class, SOM, PAM, and more.
- Assess internal coherence of clusters to identify most meaningful and stable segment solution
- Build segment profiles to highlight key dimensions of differentiation
- Create segment typing tools to enable quick targeting in the field
If above is in line with what you need, contact me to discuss your project needs!