[MUSIC] Hello everybody, I trust you have watched the short video from the movie Titanic. This moment in which this big cruise boat collides with the iceberg in the middle of the Atlantic Ocean. Just after a terrifying opening phrase, what do you see? Iceberg, straight ahead. The boat veers left at full speed in a desperate measure to avoid a frontal collision. But of course, in doing so, it seals its own fate, because the part of the iceberg which is not seen scrapes the whole starboard, sending over 1,500 people into freezing waters, and only 32% survived. What do you see? This little excerpt is, to me, a perfect metaphor for poor segmentation and its dire consequences for a brand and a business. And let me be clear about this. Poor segmentation will lead to the decreasing health of your brand, and eventually, its death. So what is the main lesson here? Though a bit too easy and very lazy, businesses and marketers often focus on what they see. This normally corresponds to demographic parameters, a man, a woman, a young person, an urban guy. Big businesses, however, can dig a little bit deeper into what they see and will provide relevant behavioral information. We have already established that demographic segmentation is no use. Businesses make money when people do things, not when they are things. There is certain appeal for behavioral segmentation when it helps describe what people are actually doing. And it's a key starting point in consumer package goods for building market segments. The first segmentation, behavioral segmentation, you can use is occasions. Which means dividing the market into groups according to use education when buyers get the idea to buy, when they actually make the purchase or use the purchase item. Next is benefits, dividing the market into groups according to the different benefits that consumers will seek the product. Is it convenience? Is it health? Is it nutrition? Is it for ease of use? Then it's user status, divide in the market according to how they purchased your brand and your category. Are they lapsed users? Are they loyal users? Are they non-users, non-users of your brand, non-users of the category? Finally, there is usage rate, dividing the market according to how often they purchase your brand and your category. Are they heavy users? Are they low users? Are they heavy users of the brand and heavy users of the category? Let's use an example from McDonald's called Leaving Your Morning Mood Behind Campaign to see what behavioral segmentation would look like. You see this person has breakfast on the go. Sometimes he might even forfeit breakfast altogether. When they do have breakfast, it is on the way to work in the morning as part of the commuting chores. They will have donut, coffee, sandwich, a bagel, maybe some orange juice, a quick pastry, any food item or drink item that is very quick to eat and very easy to carry. They are currently buying that breakfast at Dunkin' Donuts. Baskin Robbins perhaps, or the local convenience store, or even a vending machine at work, just as they walk in. They consider Starbucks far too fancy for their tastes, they just need the fuel. They are a McDonald's current user. They like the Big Mac and will purchase one at least once a month. But they have never tried the McCaffe or the McBreakfast. The reason why it is so critical to do this right is because once you have established the what you see with a high level of precision, you can dig deeper into the reasons why the behavior is exhibited in the first place. In other words, why people are doing what they are doing. Recognizing this simple fact is like giving the right dimension to the iceberg. Yes, we can see part of it, but the part is only approximately a third of the whole structure. There is a lot left unseen. And if we don't acknowledge it, we run the risk of sinking just like the Titanic. [SOUND]
