Malcolm McDonald, Emeritus Professor at Cranfield University and author of a series of books on marketing planning makes the case for an increased focus on one specific aspect of the planning process in his new book, ‘Market Segmentation’.
In this considerable work McDonald reveals how marketers can define segments through the use of demographic, geographic and psychographic methods, and crucially by understanding how different customers obtain value from products and services. Segments can then be screened for profit potential and your organisation’s capability to serve them, before ultimately becoming the basis for targeted marketing campaigns.
McDonald posits that segmentation can be a source of competitive advantage by identifying underserved niches and customers in the value chain, and highlighting where ambitions exceed capabilities. Those familiar with the Boston Matrix will note that McDonald proposes replacing products with segments, in effect identifying the target customers for the future.
Throughout McDonald argues that successful segmentation should be customer driven and well-integrated into organisations. He is also careful to note that the use of consultants in the segmentation process should be handled carefully on the basis that they will not have the necessary deep understanding of your organisation.
McDonald’s publications are required reading on many marketing courses, and ‘Market Segmentation’ has clearly been written with academic use in mind, complete with definitions of ‘marketing’ and ‘market research’. This makes for a lengthy read, raising the concern that busy marketers may struggle to give the book, and by extension the subject, the time they deserve.
McDonald argues that segmentation should start the marketing planning process, adding structure and focus to the steps that follow. Yet, the marketing planning process poses a key challenge to marketers in 2013. The typical tenure of a CMO has doubled over the last six years to 45 months. Senior marketers used to creating multi-year plans are now more likely to be in post to see these plans through to completion. Errors in planning, including market segmentation, will come home to roost. Has McDonald’s comprehensive book been published at just the right time?
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