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Top 5 Things to Know in the Market on Wednesday, April 8th
By Geoffrey Smith
Investing.com — President Donald Trump wants to partially reopen the U.S. economy within four to eight weeks, but the Covid-19 outbreak is still showing only patchy signs of slowing down, as the number of U.S. cases doubled over the last week to 400,000. Bond spreads widened after another acrimonious meeting at which Germany and others refused to issue debt jointly with weaker eurozone members. Oil prices continued to vacillate ahead of the OPEC+ meeting on Thursday, and China finally lifted the lockdown of Wuhan, where the virus first emerged. Here’s what you need to know in financial markets on Wednesday, April 8th
1. Trump eyes partial restart of economy within weeks
U.S. President Donald Trump talked up the possibility of reopening parts of the U.S. economy, as the Covid-19 outbreak in the country showed mixed signs of slowing down. The number of U.S. cases has doubled to 400,000 in the last week, but grew only 8.1% on Tuesday, a fifth straight daily decline.
“We’re looking at the concept where we open sections of the country and we’re also looking at the concept where you open up everything,” Trump told Sean Hannity of Fox News on Tuesday.
Trump’s top economic advisor Larry Kudlow told Fox earlier that parts of the economy may reopen within four to eight weeks, although it isn’t clear what degree of support the plans could count on among governors and mayors across the country.
Trump’s comments came after another press conference plagued by mixed messaging, in which he first announced, then walked back, a suspension of U.S. contributions to the World Health Organization. The president had criticized the WHO earlier for its “China centric” communication, implying that it helped the Chinese government cover up the true scale of the Covid-19 disaster.
2. Euro zone fails to agree on crisis response funding as recession hits hard
European sovereign bond spreads widened to the most in three weeks after eurozone finance ministers again failed to agree on how to fund the currency union’s fiscal response to the Covid-19 crisis. The meeting was suspended until Thursday, after talks broke down over demands – led by Italy, Spain and France – for joint debt issuance, known as ‘coronabonds’.
German Finance Minister Olaf Scholz, one of those opposed to coronabonds, told reporters nonetheless that a deal is near.
The news came amid clear evidence of the recession hitting Europe. The Bank of France estimated that French GDP shrank by some 6% in the first quarter, while Germany’s leading economic research institutes forecast that German GDP will shrink by 9.8% in the second quarter, after a 1.9% contraction in the first three months of the year.
The virus, meanwhile, claimed its highest number of victims in Spain in four days, frustrating hopes for a clearer sign of peaking.
3. Stocks set to open mostly higher
U.S. stock markets are set to open mostly higher after a two-day rally ran out of steam in late trading on Tuesday to leave benchmark indices marginally lower on the day.
By 6:35 AM ET (1035 GMT), the Dow Jones 30 Futures contract was up 85 points or 0.4%, while the S&P 500 Futures contract was up 0.4% and the Nasdaq 100 Futures contract was up 0.5%.
The dollar index was 0.2% higher at 100.14, thanks largely to gains against the euro after the Eurogroup’s failure and the alarming GDP headlines from France and Germany. European stock markets were also mostly lower, with the Stoxx 600 falling 1.1%.
4. Oil prices perk up on fresh hope ahead of OPEC+ meeting
Oil prices stayed volatile a day ahead of the OPEC+ meeting at which Russia, Saudi Arabia and others are aiming to agree a cut of around 10 million barrels a day in output. U.S. crude futures were up 3.6% at $24.48 a barrel while Brent futures were up 0.6% at $32.05.
Crude futures had tumbled late on Tuesday amid pessimism that even a 10 million barrel-a-day cut would not fix an oversupply problem, given that global demand has fallen by even more.
The U.S. government’s weekly report on oil stocks is due at 10:30 AM ET and is likely to corroborate – broadly – another huge rise in stocks reported on Tuesday by the American Petroleum Institute. The 11.9 million barrel rise reported by the API was above market forecast for a 9.3 million barrel increase in official stocks.
Separately on Tuesday, the Energy Information Administration cut its forecast for U.S. oil output by 1.2 million barrels a day for 2020, and by 1.6 million barrels a day for 2021. The U.S. government will likely argue that the projections are proof that it is sharing the burden of output discipline, when G20 energy ministers attempt to wrap up a binding deal on Friday.
5. And finally, China lifts Wuhan lockdown; mass exodus expected
After 10 weeks, China ended the lockdown on Wuhan, the city where the virus first emerged. Reports suggested a mass exodus from the city was likely in the near term.
Elsewhere in Asia, Japan finally declared a state of emergency after an interrupted debate in its parliament, something that paves the way for bigger economic support packages from Tokyo.
South Korea, meanwhile, unveiled economic support measures worth some $45 billion, including cheap loans for exporters. The dollar rose 0.1% against the yen and 0.5% against the won.
By Elizabeth Harr | January 7, 2020
There’s a lot of interest these days in marketing research. And nowhere is research a hotter topic than in the business-to-business world, where it’s a substantial factor in many firms’ prosperity. In this post, we’re going to explore this powerful marketing piece by piece, breaking down B2B marketing research into a series of questions and answers. Chances are you’ve been mulling some of these questions, too.
What Is B2B Marketing Research, Anyway?
B2B marketing research is the process of uncovering insights into your marketplace by surveying a representative sample of its participants. Participants might include existing customers, former customers, prospective buyers, lost prospects (buyers who chose to buy from another company), and influencers. And in a competitive employer market, research might even include current and prospective employees, as well.
Typically, the research process consists of two parts: data collection and analysis.
Let’s start with data collection. There are two broad approaches you can take to collecting your data:
- Qualitative. In this approach, researchers talk directly with people to gather their experiences and opinions about your business, product or other aspects of the marketplace. Because it involves live conversations, this type of research takes more time and effort and it can be trickier to analyze. On the plus side, qualitative research provides unmatched depth and it allows you to ask open-ended questions and pursue new lines of inquiry as opportunities arise. Phone interviews, face-to-face interviews and focus groups are the most common ways businesses conduct qualitative research.
- Quantitative. If qualitative research allows you to dive deep into a relatively small sample, quantitative research derives its power from volume. Using a standardized survey questionnaire, the researcher asks everyone the same set of questions (though branched questions, in which an answer determines what question comes next, are also an option). While open-ended questions are certainly possible in quantitative research, they are used less frequently so that it’s easier to analyze the large quantity of data. The more rigid structure of quantitative research lends itself to a different range of formats, including online, mail and telephone surveys.
Which is better, qualitative or quantitative research? Really, there’s no right or wrong answer. Each serves a different purpose. At a very simplistic level, quantitative research is useful for understanding what is happening in the marketplace, while qualitative research is good at exploring why.
Qualitative research offers a great deal of flexibility, and it provides a rich body of information. Quantitative research is highly structured, which makes it easier to recognize patterns and draw broad conclusions from the data. Because of the amount of labor and cost involved in doing qualitative marketing research, it often addresses a small sample — sacrificing some statistical confidence for a deeper dive into the subjects.
The process of identifying whom to interview can be a difficult task, and usually only a fraction of those people will be willing or available to join the study. Qualitative research, on the other hand, can often reach a much larger audience, so it’s sample may be more statistically representative of the group you want to understand.
Some studies include both quantitative and qualitative research. That way, they gather a more complete picture of the audiences they are investigating.
What Are the Benefits of Marketing Research?
Our own research of professional services firms has shown a strong correlation between research and growth/profitability. In fact, firms that conduct frequent research (at least quarterly) grow almost 12X faster and are almost twice as profitable as firms that do no research.
The most successful companies understand that the market is in constant flux, and the only way they can keep on top of all that change is by doing research on a regular basis. Up-to-date intelligence allows them to adjust their messaging and services to meet the evolving needs of their audiences.
How Can My Business Use Market Research?
There are an almost limitless number of ways you can use market research to improve your business. Here are 25 to get you thinking about your own situation:
- Discover who you really compete against in the marketplace (you will be surprised, I promise)
- Uncover your differentiators
- Find your competitive advantage
- Learn what services your clients appreciate most, and why
- See emerging opportunities in the marketplace
- Adjust your marketing messages to reflect what customers really want to hear
- Find out what your customers think about you
- Discover which weaknesses you need to fix right away
- Get your Net Promoter Score and find out whether your customers are likely to recommend your company to others
- Learn how well known your business is in the marketplace
- Explore why some customers chose to buy from another company, instead
- Find out how your pricing compares to the competition
- Find out how important price is to your buyers
- Discover whether there is demand for your new product or service
- Recognize emerging trends in the marketplace
- Demonstrate that you care about your customers — the act of doing research shows that you are interested in them and their opinions
- Discover the one thing your customers would change about your business
- Find out if you are well positioned to enter a new market
- Determine what issues you should be writing and speaking about to engage your audience and build your visibility
- Find out whether internal perceptions about your company match external perceptions
- Learn how your customers find you
- Find out why your customers chose you over a competitor
- See if your customers are aware of all of your key products or services
- Find out what you are known for in the marketplace
- Benchmark your business against competitors in your industry
Can I Do the Research Myself?
Yes, you can do it yourself. But in most cases, I recommend against it. Why? Three reasons.
First of all, designing a valid and insightful survey questionnaire takes skill. A professional survey designer has the experience to write a questionnaire that will achieve your goals — and avoid the leading questions and biases that can produce ambiguous, misleading or invalid results.
Second, most surveys, even those with small samples, can generate a lot of data. The way you categorize, roll up and score the data can dramatically affect the results. Best to leave that to an expert, if possible.
Third, you will get more honest answers if an impartial third party conducts your research for you. If you conduct interviews yourself, people may be reluctant to be critical of your business — precisely the stuff you need to know if you want to make course corrections to your marketing or operations.
To learn more, here’s a post by my colleague Lee Frederiksen that explores this question in more detail.
What Types of B2B Marketing Research Are There?
There are many ways to approach marketing research. Here are a few of the most common:
- Brand research— Learn how you are perceived in the marketplace and where your opportunities lie. Use this information to differentiate your business and strengthen your brand.
- Client research— Discover what your clients and prospects want and how you can deliver it. Use this information to adjust your marketing messages, services and operations to meet the changing needs of the marketplace.
- Market research — Find out who your true competitors are, what services you should be offering and what opportunities you can take advantage of.
- Client satisfaction research— Answer the question, “how happy are your clients with your work and service?”
- Client journey research— Map out the path people take to find, learn to trust and buy your products or services. Use this information to reduce friction in the buying process, improve you closing rate and raising your service standards.
- Client persona research— Who are the people that buy your services or influence those who make the final decision? What messages do they need to hear? Persona research will identify and profile them so your marketing and sales can be more persuasive.
What Questions Should We Be Asking?
What questions should you ask? This question is difficult to answer without first identifying the type of research you will be tackling and the goals you are trying to achieve. Also, the way you word the questions can have a real effect on the way people answer them. So I’m going to avoid prescribing specific questions here and talk about general strategy, instead.
Of course, if you engage a marketing research partner, they will work with you to develop an appropriate set of questions that get to the heart of your issues.
First, let’s look at some of the different ways you can pose questions.
- Multiple choice — Use this when you want to limit the answers to a specific set of possible answers. You can introduce flexibility, if you like, by allowing respondents to choose more than one answer, select “Other” as their answer, or supply a custom answer that wasn’t prompted.
- Yes-No — Use when you want a definitive binary answer to a question.
- Scaled— Use when you want to gauge responses on a continuum. 3-, 5-, 7- and 10-poing scales are common. A 10-point scale, for instance, is used to determine customer loyalty in the Net Promoter
- Matrix questions— These close-ended questions are used to evaluate multiple items using the same set of criteria. The result is a matrix table of results. Here’s a simple example:
- Open-ended questions — Use when you want respondents to provide their own answers. In qualitative research, an interviewer might ask a respondent to elaborate on an aspect of his or her answer.
Okay, now that you understand the types of questions you can ask, you need to clearly define your goals.
Are you trying to get a better understanding of your target audience and their needs? Do you want to know what buyers think of your flagship product or service? Do you want to measure the strength of your brand?
Each of those questions would require a very different questionnaire, so before you can begin designing your survey you need to spell out what it is you are trying to learn. This may sound obvious, but it’s all too easy to jump right into writing questions without setting any boundaries or goals. You’ll also need to decide whom you will ask to participate in your survey — again, your overall goals will directly affect your choices.
Next, you’ll determine whether qualitative, quantitative or a combination of the two is most appropriate for your study. If in doubt, choose qualitative. In my opinion, it offers the most value for your effort.
Only after you’ve completed the previous steps should you begin developing your questions. As you write questions, test them in your mind (or better yet, run them by others) to make sure they aren’t confusing in any way and that they don’t accidentally reflect any biases or assumptions you may have about the answers.
It bears repeating: you are more likely to get accurate results if you work with an experienced research partner. That said, it’s certainly possible to do it yourself.
How Many Participants Do We Need?
How many people do you need to include in your research? Well, that depends on your budget and whether you want bullet-proof data or good-enough results. If you want a high level of confidence that your research represents the entire population you are studying, you will need a statistically significant sample size.
In other words, if you want to be confident that your results have, say, less than a 5% likelihood of being wrong, you would need a truly random sample that is large enough to represent the full range of people that make up your audience. That could be a lot of participants.
If you have a large budget, you may be able to achieve such levels of certainty. But if your budget is smaller, you may need to lower your standards and settle for a “non-probability” technique called “convenience sampling.”
This common approach to research is used when it is very difficult (or expensive) to obtain a statistically significant and/or random sample. It is often used in university research settings — for instance, small studies in which students are recruited to take part in experiments. It is also common in business research when it is impractical to identify a large enough sample, much less a truly random one.
While the results of convenience sampling can’t be assumed to apply to the entire study population, they can provide useful, actionable information so long as you keep in mind the limitations of this approach. In convenience sampling, the sample should be as large as is practical. If that means six people, so be it. It’s better than nothing. You just can’t assume that these six subjects will accurately reflect the mindset of your broader audience. At Hinge, we like to include at least 10 people in one of these studies, and that’s a bare minimum. 20 is even better. The more, the merrier. If you are working with a small sample, I recommend that you conduct qualitative research so that you can extract the most information from your limited sources.
How Often Should We Be Doing Research?
As the chart that I shared earlier illustrates, businesses that do research at least quarterly tend to be high-growth, high-profit businesses. But even those that do it infrequently (say, once a year or so) significantly outperform companies that do no research at all.
So my advice is to dive in now and do something — even if you don’t think you’ll be able to conduct additional research again for a while. A little information can be a powerful thing, and it can be a great motivator to make changes in your business. Changes that will make you more competitive and aware of your strengths, weaknesses and blue-ocean opportunities.
How Do I Get Started?
To do research right, you should seek out an outside research partner. Even we at Hinge, use a third party to interview our clients and prospects. It’s the only way to minimize bias and convince people that your survey is confidential and impartial.
Look for a firm that knows your industry. And if they have worked extensively in it, ask if they have industry benchmarks to which you can compare your results.
Be prepared to provide a list of clients and prospects. A good firm will help you develop a letter or email you can use to reach out to these people. Depending on the situation, they may supplement these lists with their own prospecting.
Most importantly, have an open mind. Some of the findings may take you by surprise. Those are often the most valuables insights — whether they are positive or negative.
If you prefer to do the research yourself, that’s okay. Just be aware it comes with limitations and caveats, some of which I’ve addressed above. You may want to keep your survey to a handful of questions to avoid being overwhelmed by data. Do your best to select a broad sample of your audience, and try to include people who had different experiences (good and bad) with your firm.
Conducting marketing research can make your B2B company more self-aware, attuned to the marketplace and better prepared for change. If you haven’t done this kind of research before, don’t worry. A qualified research partner can handle the heavy lifting and deliver a more nuanced interpretation of the results — results that you should be able to act on right away.
Marketing research is a powerful and often underappreciated tool. Whether you are wondering how to build your company’s momentum again, what’s going on in the marketplace, why your top competitor is winning all the business or how you can keep your competitive edge, the answers are out there. You just need the will and the way to extract them.
- Read more about this topic in our free Professional Services Guide to Research.
- Learn how to make your firm better known in the marketplace and leverage your expertise to build a powerful reputation. Check out our free Visible Firm® Guide today!
- Understand your buyers. Win more business. Download our research study Inside the Buyer’s Brain and read the latest findings from the biggest study of professional services buyers to date.
- If more of a hands-on approach is for you, register for one of our courses through Hinge University and become the next Visible Firm ® .
How Hinge Can Help
Don’t know where to start? Hinge can help your firm develop winning differentiators that will put you on the road to greater visibility. Our research, positioning and branding services — as well as our flagship Visible Firm ® program — are designed to do just that.
Author: Elizabeth Harr Elizabeth is an accomplished entrepreneur and experienced executive with a background in strategic planning, branding and growth for professional services. Elizabeth co-founded and ran a successful tech firm, which gives her critical insights into our professional services clients’ challenge.
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COVID-19 update: 1.45 million cases, 83,471 dead; N.Y.C. death toll exceeds 9/11
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Are markets getting ahead of themselves? Steen Jakobsen, chief investment officer at Saxo Bank, notes how Denmark is among the first in Europe to announce a plan to reopen the economy. But that will start with only opening schools for the youngest students through fifth grade and nothing else until at least May 10. “This points to the very slow pace of normalization,” he says.
Luc Filip, head of private banking investments at Banque SYZ in Geneva, who provides our call of the day, adds to that, saying that investors need to remember that a “peak number of cases doesn’t mean the economy will be reopened next week.”
That said, Filip sees the risks of markets dropping another 20% or 30% lower than two weeks ago, because of the extensive measures by governments and central banks. He is more cautious on U.S. equities, though, due to poorly coordinated COVID-19 measures between states and the federal government.
“There is a risk that the U.S., by postponing stronger measures, by hesitating, may have a larger outbreak and then a larger impact to the economy,” says Filip.
Where does that leave his investment choices? Outside of gold and the dollar, for now, he is focusing on quality stocks both in the U.S. and Europe, where they are shifting toward a neutral position because governments have taken up measures fast.
“Big companies, strong balance sheets, strong market positioning, low debt. These kind of companies, we like them in Europe and the U.S.,” he says. Those names include Google-parent Alphabet GOOGL, +1.44% , Amazon AMZN, +0.73% , Mastercard MA, +3.69% , L’Oréal OR, +1.00% , which has global reach and Nestlé NSRGY, +1.96% NESN, +0.28% .
Companies need to have sufficient reserves to survive lower revenues from a demand drop, and while these may not be the cheapest stocks and sometimes viewed as boring, he bets a few will be “even stronger after the outbreak subsides.
“What we don’t recommend now is to chase companies that are under stress, companies that have weak balance sheets. We don’t like them and don’t want them now, even if they are 40% lower. In the case all this lasts longer, the worse it will be for low-quality companies,” says Filip.
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Reduced dividends, softer growth and an economy haunted by zombie companies — that’s the postpandemic future seen by this Odey fund manager
A portfolio manager at one of London’s leading hedge funds has warned of a future haunted by “a more Soviet outcome” for countries defending their economies from coronavirus.
What You Need to Know About Segmentation
The marketers of Clearblue Advanced Pregnancy Test, a product that can tell you if you’re one-week, two-weeks, or three-plus weeks pregnant, asked a couple of D-list celebrities to tweet out their positive tests back in 2020. As Businessweek’s Jessica Grose reported, the maker of the test, Swiss Precision Diagnostics, has a 25% share of the at-home pregnancy-testing industry and is targeting its marketing efforts at Millennials. Grose quotes IbisWorld researcher Jocelyn Phillips as pointing to the high-tech aspects of Clearblue’s test, also noting that young women might be more willing to shell out more money for such technology — the digital version costs about $5 more than the boring old blue and pink line version.
There is nothing new about this kind of segmenting in the pregnancy test market, however. And it’s actually a really useful (if not slightly unsettling) example of how you might segment potential customers with very different needs and behaviors.
For example, you could segment the market for early pregnancy tests based on demographics such as age and income, or you could segment the market based on consumers’ price sensitivity. But in this situation, it is useful to ask why: Why would a woman want to take a pregnancy test? And are these reasons the same for everyone? A little bit of thought would suggest that there are two groups of women: hopefuls, those who want to be pregnant, and fearfuls, those who are afraid that they might be pregnant.
How would you identify these two segments and market to them differently? Often companies offer multiple products that appeal to different market segments and let customers self-select. That is, the firm does not identify customers in various market segments; instead, the customers reveal their market segment identity by choosing different products. Quidol, a company based in San Diego, California, created two different products to appeal to two segments in the market for early pregnancy tests: the hopefuls and the fearfuls. The actual test products were almost identical, but the two products were given different names and package designs, were placed in different aisles of a drugstore, and were priced differently.
Segmenting, at its most basic, is the separation of a group of customers with different needs into subgroups of customers with similar needs and preferences. By doing this, a company can better tailor and target its products and services to meet each segment’s needs. This isn’t, as McKinsey’s John Forsyth says, simply for marketing or retail firms. “We see many, many companies saying, ‘I want to get more consumer-driven and customer-facing. But sometimes the organizations don’t know how to start. I’d say you really start with a basic understanding of your consumers or customers, right? And that’s segmentation.”
It sounds straightforward but often it isn’t. Here are a few pitfalls that many companies fall into when they start thinking about segmentation. One, companies rarely create a segment — more often they uncover one. Two, segmentation and demographics are very different things. “You have two people, we know they’re the same age, we know they’re British citizens, and we know they’re of royal blood,” explains Forsyth. “One of them is Prince Charles. The other is Ozzy Osbourne, the Prince of Darkness. They’re in the same demographic segment, but I can’t imagine marketing to them the same way.”
And three: you have to ask yourself why you want to segment and what decisions you’ll make based on the information. “Many companies say, well, I think I just need a segmentation,” says Forsyth. “But before you even start the segmentation, you need to really understand why you’re doing it and what some of the actions are that you’re planning to take, based on what you think you might see. It helps you understand what’s actionable in terms of driving a company’s business.”
Once you’ve answered these questions, you have to decide whether you want to start segmenting by needs or behaviors. “If you’re doing something strategic and you’re trying to figure out if you have the right brands, the right value proposition, the right product line, then I would say you should start with needs or attitude segmentation,” explains Forsyth. This is basically trying to identify what needs your product or service is or could meet.
“But if you think you’ve got that pretty much under control,” he continues, “and you need to understand how to go to market or target your digital and TV spending, then I would start with behavior.” This involves trying to identify differences in customer groups based on their buying and lifestyle patterns, for example.
Regardless of your approach, a useful segmentation should include these six characteristics:
1) Identifiable. You should be able to identify customers in each segment and measure their characteristics, like demographics or usage behavior.
2) Substantial. It’s usually not cost-effective to target small segments — a segment, therefore, must be large enough to be potentially profitable.
3) Accessible. It sounds obvious, but your company should be able to reach its segments via communication and distribution channels. When it comes to young people, for example, your company should have access to Twitter and Tumblr and know how to use them authentically — or, as Clearblue smartly did, reach out to celebrities with active Twitter presences to do some of your marketing for you.
4) Stable. In order for a marketing effort to be successful, a segment should be stable enough for a long enough period of time to be marketed to strategically. For example, lifestyle is often used as a way to segment. But research has found that, internationally, lifestyle is dynamic and constantly evolving. Thus, segmenting based on that variable globally might not be wise.
5) Differentiable. The people (or organizations, in B2B marketing) in a segment should have similar needs that are clearly different from the needs of other people in other segments.
6) Actionable. You have to be able to provide products or services to your segments. One U.S. insurance company, for example, spent a lot of time and money identifying a segment, only to discover that it couldn’t find any customers for its insurance product in that segment, nor was the organization able to design any actions to target them.
Now you can start breaking down segments by who buys, what they buy, and why they buy (or use or view, etc.) it. The pregnancy test interactive above is a great example of how this works.
There are also prominent failures that companies should heed. One of the most infamous is when Bic decided to segment its young female consumers. The “Bic Cristal for Her” writing utensils were thinner, designed with more pastel colors, and priced higher than other pens. Women, in general, were offended, taking to Amazon to write some very creative reviews. The pen market, in other words, was not as heterogeneous along gender lines as Bic had thought.
When thinking about how you segment, John Forsyth has several suggestions. For one, he notes, “focus groups are dead. If you’re still using focus groups, you’re using 30-year-old technology.” A much better way to understand customer needs and behaviors is to spend time with people in their homes, stores, or health clubs. “You watch them, you talk to them while they’re doing the kinds of things we want to be observing.”
This type of qualitative research is all the more important because it showcases real stories that are key to convincing stakeholders. “When we illustrate things with qualitative research, we get CEOs going, ‘Wow, you’re really telling me my marketing strategy is all wrong and I need to change it,’” says Forsyth. “It’s very powerful, and it’s really exploded in the last 10 years.”
Big Data and technology have changed how companies approach segmenting. “The old model, particularly in the market research world was, ‘I understand people’s needs and attitudes, and behaviors will come from that,’” Forsyth explains. “Today, in many situations, [marketers] have flipped it to say, ‘I’m going to do segmentation based on their behaviors, and then I’m going to try to understand the needs that drive behavioral differences.”
He warns, however, that this type of segmentation is “a lot harder to do than people think, and I don’t think we’re anywhere near being good at it yet.”
Forsyth’s also seeing a lot of movement in the area of segmenting emerging markets worldwide, which poses a number of challenges. For one, scales marketers use to measure needs or behaviors in one country may be way off in another due to different cultural norms.
He also notes that affordability is still a huge factor in developing countries, too, whereas it may not be elsewhere — as the $20 pack of digital pregnancy tests demonstrates nicely.
This post includes material adapted and reprinted from Core Reading: Segmentation and Targeting, HBP. No. 8219, by Sunil Gupta, which is part of Harvard Business Publishing’s Core Curriculum in Marketing. Copyright © 2020 by the Harvard Business School Publishing Corporation; all rights reserved. The segmentation characteristics are adapted from Philip Kotler and Kevin Lane Keller, Marketing Management, 14th ed. (Upper Saddle River, NJ: Prentice Hall, 2020).
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