The Decline of the Efficacy of Consumer Segmentation

Yes – I’m still among the quick. I’ve just been so slammed that I’ve had no time to do any postings. My most recent distraction from this blog was the Fifth Annual Beyond the Numbers Summit in Miami. If you didn’t make this year’s meeting, pencil in the first week in April 2007 on your calendar for BTN VI. BTN gets better by the year.

Produced by PME Enterprises for JWT, the humongous WPP agency formerly known as J. Walter Thompson, BTN attempts to get beyond the reduction of older consumers to numbers to get into the deeper recesses of their psyches. Nevertheless, even at BTN there is the occasional presenter who still seems restricted by a numbers-based view of consumers and their lives.

Still, many attendees leave BTN having experienced a tectonic shift in their perceptions of consumers in the second half of life. For the first time they realize that a 60-year-old is not simply a 30-year-older version of her 30-year-old self. They learn at least one big reason why advertising directed at older people often falls flat – despite older faces in ads and brochures, body copy reflects the values of the young people creating them.

An even bigger and more critical lesson BTN first-time attendees walk away with is a realization that people in the 40-plus bracket cannot be so neatly segmented as younger people. This is like a kayaker losing his paddle in the middle of a white water descent through a rock-studded falls. “If segmentation doesn’t work all that well, how do you single out prospects for your product?”

The answer lies in mastering the universal dimensions of human beingness. For example, all humans want love. But they want it in different ways by season of life. All human beings also want a sense of purpose, but once again in forms that vary by season of life.

New Balance understands the role of behavioral universals as well as any company does. It’s positioning at the macro level is based on the idea oaf a balanced life in which one continuously grows as a person. This is in contrast to Nike’s focus on winning and aggressive self-expression.

However, New Balance does not ignore segmentation. Rather, it consigns its practice mainly to its channel management activities. Shoe styles and marketing collaterals in a Footlocker are quite different from those found in a Nordstrom’s.

The idea is not that segmentation is a bad idea, but that it is overused to the point that companies cut themselves out of consumer populations who don’t fall within a targeted segment. The fear that marketing to older people will turn younger people away from a brand is based on mindless embrace of market segmentation. But New Balance has seen its market share among youth increase over the past decade while the market shares held by Nike, Adidas and Rebook has fallen. Neither of those three has managed to construct a marketing position that consistently resonates across wide generational divides. They fear that messages that have a strong appeal among older people will be turn-offs to younger people.

Attendees of the BTN Summits get these kinds of valuable insights. I was particularly cheered this year by the conference-closing message of Lori Bitter, JWT partner and co-director of its Mature Market Group. Lori warned the audience to not become a mindless slave of labels, such as “Boomers.” While admitting to their value as shorthand, they encourage us to forego critical thinking, she charged.

With so much interest in boomers these days, and a population explosion among boomer “experts,” Lori’s words should be taken deeply to heart. In my own travels around the country I have found very few of these experts who have any more than a common street level understanding of the midlife behavior of people in midlife and beyond. From podiums, in books, and in countless articles I hear statements made about aging boomers that simply are not supported in the annals of adult development psychology.

So, as Lori Bitter says, “Beware of labels – they can lead you down the wrong path.”

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Reader Georgi Mammen Mullassery asked me to direct readers to an entry in his blog on the structural and behavioral differences in the brains of males and females: His request was inspired by my March 10, 2006 posting, “Gender Specific Changes in Mid- and Later Life Worldviews”

Comments

[joared]

Interesting that BTN is, hopefully, having some success with decreasing segmentation of older consumers; as you say, "overused."

Picturing older faces (assuming they're not ageist, too) often loses me for the very reason you state. The body of the copy reflects the values of the young creators which you noted.

Just maybe a marketing team of several generations, incorporating elders into the scheme, could go a long way toward bridging that gap.

As for Bitter on labels, not only can they "lead you down the wrong path," they can be counter-productive on the journey.

I say all this from the perspective of a consumer, who also has had a special interest in the machinations of the marketing world.

Thanks for the link to Georgi Mammen Mullassery's blog as appreciated your original post to which he refers.

[David]

Joared,

Thanks for you thoughtful input. I always appreciate hearing from you.

DBW

[Dmitri]

I am trying to find a link to your other blog for your forthcoming book. Could you please repost it somewhere? I forgot to bookmark it last time...

[David]

Dmitri,

Thanks for your interest in Firms of Endearment --
click here to get to the blog on FoE.

DBW