1. Customer Segmentation What is Customer Segmentation? Dividing the market into meaningful subgroups What is it good for? Finding underserved consumers Targeting products or marketing to a specific user group Understanding who your consumers are

2. Customer Segmentation What Should I Segment By? Demographic – Age, Gender, Socioeconomic – Income, Education Product Usage – Usage level, Purchases per month Important Product Benefits – Cost, Color, Brand Geographic – City, Region

3. Customer Segmentation Methods Of Customer Segmentation Quantitative Ask Around, Mental Exercise Qualitative SPSS Pivot Tables

4. Customer Segmentation New Electric Orabrush Known: Cost will be $60 Which consumers would want an electric Orabrush? What would they expect to pay? What channels should we sell it through? What features should it have? Etc

5. Customer Segmentation Methods Of Customer Segmentation Quantitative – Do the mental exercise, try to drill down Pros – Cheap, Fast, Easy, Better Than Nothing Cons – Subjective, No New Data NewlywedsInsecure TeenagersSalesmen 30%50%20% PriceColorPerformance Online Brick & Mortar $15$10$40

6. Customer Segmentation Methods Of Customer Segmentation Qualitative – SPSS – Build and run survey, input and massage data Pros – Data Driven, Finds non intuitive answers, Robust Cons – Expensive, Time Consuming, Hard to learn

7. Customer Segmentation Methods Of Customer Segmentation Qualitative – Pivot Tables – Build and run survey, input and massage data Pros – Data Driven, Finds high level connections, Cheap Cons – Not very robust, Somewhat Subjective

8. Customer Segmentation Pivot Table Customer Segmentation Sent out a survey to heavy users asking Demographic Questions Job Age Gender Location Product Feature Questions Most important feature Preferred sales channel Expected Price

9. Customer Segmentation Identify Segments $ 30 $ 40 $ 50 $ 60 $ 70 Female Newlywed13516% Salesman6410% Teenager172 Male Newlywed514 Salesman27 Teenager515 Female Salesmen and Newlyweds are good segments

10. Customer Segmentation Identify Segments East is a better location Row Labels $ 50 $ 60 $ 70 Female Newlywed East442 West531 Salesman East14 West32

11. Customer Segmentation Identify Segments Age is not relevant for segmentation Row Labels $ 50 $ 60 $ 70 Female Newlywed 2041 3041 40121 5041 Salesman 203 3011 4021 5011

12. Customer Segmentation Identify Product Features Performance and cost are the most important product features for their segments Row LabelsColorCostPerformance Female Newlywed East253 Salesman East14

13. Customer Segmentation Identify Product Features Performance is most important product feature Row LabelsB & MOnline Female Newlywed East55 Salesman East5

14. Customer Segmentation Target Consumer Segments East Coast Female Salesman 10% of population Values performance Willing to spend $65 Shops at B&M Stores East Coast Female Newlywed 6% of population Values cost Willing to spend $61 Shops at B&M Stores