Hello again. Let's recap very quickly. We've been saying all this time that brands are like people, that our relationship with brands is emotional, and key aspects of brand-building include relevance, experience, perceived quality, and liking. This takes us into the next big question, the most important one actually. Who needs to like us as a brand? Who does a brand wants to have a relationship with? Be relevant for whom, to whom? Consumers sit at the center of brands and only through consumer centricity can brands truly grow and thrive in the marketplace. But this begs another question, is it any consumer that a brand wants? Does a brand wants to be liked by all? The answer is no. Brands choose the person or group of people they want to engage with and be liked by very carefully. The process by which brands reach this person is called segmentation. The market segment to which they address their value proposition is called their target. We will see the importance of this when we work with positioning statements. There is no branding without segmentation, and no segmentation without branding, they feed each other constantly. So, how do we define segmentation? Segmentation is the process of defining and subdividing a large homogeneous market into clearly identifiable segments. These will have similar needs, wants or demand characteristics. I often get nervous when I hear things like my brand is a millennial brand. How can a brand positively reach such a huge segment? A whole generation? It's like saying all people born in the '90s are exactly alike in every possible way. The same thing happens when we talk about brands for women or for men or for seniors. Do we really think that by just being something, you have more chances of buying something? Of course, we know that it's not true. The conceives for millennial's, I'm sure you're all using Facebook, right? The fact is that brands make money when people do things not when they are things. So, it is of extreme importance that segments are correctly identified. So, which segmentation criteria do brands use? There are basically four types again: demographic, geographic sometimes comes in there as well, behavioral, psychographic, and motivational. In the next few sessions, we will be working with the benefits and shortcomings at each of these. But let me give you a quick summary of what these entail. Demographic segmentation addresses individuals on the very simple criteria; age, gender, socioeconomic status, etc. Sometimes, geographic criteria also use customer location; rural versus urban. This is the most basic type of segmentation. Though it helps to locate targets, and is importantly drawn in a marketing process, it is usually not a very good one for brands or for brand-building. Behavioral segmentation is much better because it focuses on what people are actually doing. In this type of segmentation, brands are looking at user status, how loyal they are, for example, whether they buy the brand at all or occasions of usage, is it the morning? The afternoon? Is it while commuting? Or the benefits sought. Do we need nutritional? Do we need convenience? Psychographic segmentation is the third type of segmentation and is a step forward that looks into personalities, and lifestyles, and attitudes, all of those aspects that actually impact behavior. It is much deeper than behavioral segmentation and is a first step towards understanding why people do what they do. Finally, my favorite, motivational segmentation. This is the most complex criteria a brand can use, but the one criteria used by most of the big brands you know and you love. Remember when we were talking about Harley-Davidson, in the first session and the quest for freedom? We can add so many brands to this list, Red Bull, or GoPro and Thrive, Vitality. Apple's focus on innovation and creative individuals, BMWs focus on performance and enjoyment, the ultimate driving machine. This is a brief introduction to segmentation. In next video, we will explore understanding your prejudices as a first step to get your segmentation right.
