Mkt Segmentation Guide #4

In consumer goods categories, good segmentation work can last for decades.

Segmentation is based upon differing wants/needs.  Good marketers are able to understand and appeal to the fundamental wants/needs of their target customers.  These fundamental consumer wants/needs do not change rapidly.  People have always wanted a full stomach, shelter, and clothing (physiological needs).  They’ve always wanted to be free of fear of the future (safety needs).  They’ve always wanted companionship (social needs).  People, especially men, have always had self image needs to be satisfied (ego needs).  These needs don’t change rapidly.

Consumers’ wants/needs are usually set early in life and greatly influenced by their parents.  Despite the fact that children tend to rebel in adolescence, consumers end up having wants/needs that are similar to their parents.  Thus, wants/needs can remain relatively constant over multiple generations. 

What changes with more rapidily than consumer wants/needs are marketers’ solutions to those wants/needs.  Using the automobile category as an example, Americans have always loved big vehicles.  There are a couple of explanations for this phenomenon.  Firstly, Americans usually think that bigger is better … in houses, in meals, and in automobiles.  Secondly, Americans tend to be materialistic; we judge ourselves and others by how much we own.  Think of the bumper sticker, “He who dies with the most toys wins.”  We need big vehicles in which to carry our possessions because we are materialistic.  In the 1950-60’s, the typical family vehicle was the big, full sized station wagon.  In the 1970’s, the station wagon was supplanted by the minivan.  Finally, in the 1990’s, the minivan was replaced by the sport utility vehicle.  The fundamental want/need remained the same over this 50 year period; it was the marketers’ solution to the want/need that changed.

Of course, there can be events in the marketing environment which cause rapid shifts in consumer demand.  The two gasoline shortages of the 1970’s caused a shift from the traditional large American car to smaller, more fuel efficient models.  The high gasoline prices of prices of 2008 also shifted consumer demand to smaller, more fuel efficient models.  Once the gasoline shortages of the 1970’s were over and the high prices of 2008 declined, consumers reverted back to larger vehicles which was really what they wanted in the first place.