M ore experience in market segmentation research in the health care space with SPH Analytics has – particularly health insurance – than any other research firm. Paired with predictive modeling, we have put our segmentation solutions to work for clients to improve targeting, messaging and communications, product design, pricing strategies and many other aspects of their marketing strategies.
We offer various types of market segmentation work, including attitude behaviors, brand image, customer satisfaction and experience, product preferences, health risk, behavioral change and level of engagement, and predictive modeling using third-party data.
Market segmentation describes the division of a market into homogeneous groups, which will respond differently to promotions, communications, advertising, product, pricing, and other marketing mix variables.
Market segmentation first arrived in the 1950s when product differentiation was the primary marketing strategy in use. In the 1970s and 1980s, market segmentation began to take off as a means of expanding sales and obtaining competitive advantages. In the 1990s, target or direct marketers began using many sophisticated techniques, including market segmentation, to reach potential buyers with the most customized offering possible.
Since then, progressively better data and tools have come available to improve both the identification of segments and the operationalization of a segmentation scheme in the marketplace.
An overview of the process that we use to identify market segments is provided in the graphic below. This is a generic view, and though we follow this general approach each application is customized in various ways to fit the unique dimensions of that situation.
Market segmentation can’t be classified as simply a plug-and-play process, it involves both art and science – science in terms of the statistical and mathematical tools needed, and art relating to the tools that are appropriate for a specific application and the interpretation of the results provided by those tools.
Developing market segmentation solutions produces results and generates additional insights about customers and the dynamics of the marketplace. To get the full benefit of a market segmentation solution, though, it must be broadly applied to both customers and non-customers. The appending of third-party data and predictive modeling provide the basis for application of a market segmentation solution to the marketplace.
Here are six examples of how we helped clients achieve the goals of improving marketing efficiency and effectiveness through market segmentation.