Future of Segmentation

Selected notes from the seminar on October 28, 2011. Johanna Danielsson, Kairos Future

Research-based foresight

FUTURE

STRATEGY
Future-based strategy

ACTION
Strategy enforcement

The general challenge: Adjustment to changes in the surrounding world

Total volume of change

Change in the surrounding world

Organizational change
Time
Source: Gerry Johnson, Kevan Scholes

Work unit 1: Trends in Tourism

Insights from a new survey on top experiences

Increasing pursuit of happiness The wow-experience often based on one of the following main feelings: kick, competence, comfort or contact Togetherness is the new black The worst flop often based on disappointments because of unmet expectations, e.g. cancelled events, delayed departures, things being out of order or waiting in general. Seldom experiences of a lifetime in the safe corner

Source: Kairos Future/Parks and Resorts 2001: Upplevelser i vrldsklass. www.parksandresorts.com/press (free download).

London School of Economics

Flow according to Mihly Cskszentmihlyi

The new economic value

Stimulate TOGETHERNESS Differentiated Coach TRANSFORMATION Stage EXPERIENCES

Competitive position

Deliver SERVICES Make GOODS

Undifferentiated Low

Extract COMMODITIES

Kairos Future/Parks and Resorts (2011), partly based on a model by Pine & Gilmore, HBR, 1998

Value for the customer

High

7 arena trends for the tourism industry

Increasing professionalization of experience production Everything has a theme, story telling! Edutainment Virtual experiences Friends in the pocket (the mobile phone as a tool for sharing and seeking information) Focus on flow and accessability Eco and long term sustainability

Excercise 1
Choose one of the trends on the table Choose one of the following target group/segments for Malta: Culture&Heritage Diving Conference&Incentives English learning Summer/winter sun leisure What are the main implications of the trend for the target group? How will the trend affect the segments desires/behaviour etc? What conclusions can you draw? List 3-5 conclusions/ideas! Write your thoughts on a flip chart. Some groups will be asked to share their ideas. If you still have time, continue with another segment, or another trend! You may add a segment of your own choice if you like!

Work unit 2: Trends in Segmentation

Five trends in segmentation

From homo sapiens to homo zappiens = sinking predictability From demographic indicators to needs/desires (e.g. focus on tribes) Increasing need for alternative and particularly qualitative methods for mapping of market Product development and channels more central From push to pull to interaction (let them provide the data)

=Segmentation gets more difficult (consumer unpredictable) AND easier (consumer leaves more digital footprints).

Development of segmentation
Marketing Mix 4 P (product, place, price, promotion) User characteristics (demography, geography, psychography) Behavior (frequency, volumes, loyalty, hobby) Needs (unsatisfied needs, seeking advantages) Shakespeare (1623): All the world's a stage, And all the men and women merely players; They have their exits and their entrances, And one man in his time plays many parts

The future of marketing...

If I tell my Facebook friends about your brand its not because I like your brand, but rather because I like my friends!
Mike Arauz advertising lab

Example: Successful segmentation based on desires

For a long time I thought we were selling wooden tents. But then I realized that we were selling the fire as a place to gather and get inspired. A source for human development Bengt Grahn, CEO Tentipi AB

What desires is Malta satisfying?

The future of segmentation: To work with tribes

Observations
Behaviour Material manifestations of the tribe

Interviews Desk research

Netography Statistics

New types of numbers may represent the size and reach of tribes
Members in associations Participants in concerts Visits/members in a web community

Tribes/segments forces us to find new ways to portrait the market

Not possible to map out the market completely
Forget descriptions saying that Cultural Carl represents 25% of the market Different tribes overlap each other, the same consumer may be part of multiple tribes

All categories may therefore not be outlined as for instance in VALS Unstable, temporary categories makes traditional segments insufficient

Segmentation moving towards sales and development

Product development

Communication

Sales

Example: Exploring the climber tribe

Needs: Different types of climing (trad. climbing, sprot climbing, bouldering, deep water soloing, different stages of difficulty. Safety, simplicity Values/desires: Clear the mind Show off, brag Nature lovers Environmentally aware Think also: What are they NOT?

Excercise 2
Choose again one of the following target group/segments for Malta (or another one that you choose freely): Culture&Heritage Diving Conference&Incentives English learning Summer/winter sun leisure What are their main values? What really matters to them? List at least 5 values of importance to your selected segment! Use the internet to learn more about the segment by reading blogs, thematic web-sites etc. Now focus on each value. What concrete ideas for sales/marketing (where/how to reach them) or product development/innovation can you come up with? Try to develop at least 5 ideas! Try to be creative and think outside the box! At this stage it is not permitted to be pessimistic/negative or anything alike If you still have time, continue with another segment!

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Work unit 3: Examples of Segmentation

1. Examples where the segmentation is based on three perspectives

The people and their values The market: What the foreign traveler wants

The position

The offer: Experiences and products

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2. Examples of successful segmentation based on consumer insight e.g. from social media.

3. Examples of segmentation based on tribe watching

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Johanna Danielsson, Director Travel and Tourism Kairos Future johanna.danielsson@kairosfuture.com +46 70 39 245 37

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