Reinventing Market Segmentation

In 1964, Daniel Yankelovich introduced in the pages of HBR the concept of nondemographic segmentation — thank God. By 2000, the idea of tracking clicks and cookies further distracted from the understanding of why people buy. Clayton Christensen introduced and expanded the concept of Job Theory, Jobs to be Done recently.

Daniel was a master and enlightened many.

Daniel Yankelovich

It’s time for business to embrace an understanding of people and what is in their best interest, not what works for media or data. People don’t need things they don’t want. Bad products that don’t solve jobs to be done well are a waste of time and effort for everyone.

“The predictive power of marketing studies based on demographics was no longer strong enough to serve as a basis for marketing strategy, he argued. Buying patterns had become far better guides to consumers’ future purchases.”

Nothing has changed. It’s time to fundamentally change how we understand ‘why people buy’.

But more than 40 years later, nondemographic segmentation has become just as unenlightening as demographic segmentation had been.Today, the technique is used almost exclusively to fulfill the needs of advertising, which it serves mainly by populating commercials with characters that viewers can identify with. It is true that psychographic types like “High-Tech Harry” and “Joe Six-Pack” may capture some truth about real people’s lifestyles, attitudes, self-image, and aspirations. But they are no better than demographics at predicting purchase behavior.”

“Now, Daniel Yankelovich returns to these pages, with consultant David Meer, to argue the case for a broad view of nondemographic segmentation. They describe the elements of a smart segmentation strategy, explaining how segmentations meant to strengthen brand identity differ from those capable of telling a company which markets it should enter and what goods to make. And they introduce their “gravity of decision spectrum,” a tool that focuses on the form of consumer behavior that should be of the greatest interest to marketers–the importance that consumers place on a product or product category.”

I trust this is an improvement. My bias is software must be a technology core for Jobs to Be Done to be effective and pervasive.

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