| Implementing marketing segmentation is never a slam | | | | the value of in-house data and make additional data |
| dunk and health plans have more difficulty than other | | | | worth the cost.5. Advertising agencies often drive |
| firms because of their regulatory environment. But the | | | | segmentation research and use it well. For example, |
| pattern of decisions is simple when they are broken | | | | the client has chosen to target the "mass affluent" as |
| into steps.First, market segmentation research is | | | | defined by some combination of assets and attitudes. |
| needed to identify and define market segments. This | | | | Media buyers need to know the magazines this |
| process is fairly involved and is described elsewhere. | | | | segment reads and the types of web sites and |
| (See for example the whitepapers at The research | | | | search engines they use. Copy writers will incorporate |
| helps firms decide which segmentation strategy to use. | | | | the deep values of this segment into commercial |
| These strategies may be based on purchasing | | | | scripts. Creative directors will insist that the visual |
| behavior, consumer characteristics, lifestyle information, | | | | imagery of advertising be consistent with what the |
| or other market information.Second the team must | | | | "mass affluent" look like, talk like, and do. Account |
| ask, "which segment or segments does the health plan | | | | planners will concentrate their research on the target |
| wish to target?"The market research will provide | | | | segment, |
| objective information facilitating this decision. Most | | | | using the classification tool to recruit and screen the |
| experts would agree that it is foolish to target a | | | | right people.6. Call centers. Health plans can ask |
| segment to which you do not now have a reasonably | | | | segment classification questions in their response call-in |
| good fit (e.g. the GMC truck division pursuing a "green", | | | | customer interviews and in their telephone enrollment |
| hybrid-oriented segment).Finally, the fun begins. Once | | | | interviews. The classification can help find the best plan |
| target segments have been decided on, there are at | | | | for each caller and this will help assure better |
| least seven ways to use segmentation.1. Positioning. | | | | retention.7. Channel mix. Segments may have different |
| Take health care as an example. Most health plans | | | | affinities for different distribution and sales channels. |
| offer multiple plans where premiums and access to | | | | Perhaps one segment of buyers is unreceptive to |
| branded drugs and providers differ. There are | | | | e-mail communications; another segment may never |
| segments of the market willing to trade lower | | | | accept a personal visit but will read your |
| premiums for more restrictions on access. But other | | | | e-mail.It is the exceptional firm, but some have literally |
| segments are not willing to make this trade. Market | | | | organized themselves around segments. In these firms, |
| segmentation will help companies re-position their | | | | any employee can tell you who their target is, and who |
| "basic" and "premier" plans to match segments' | | | | the target is not. If they have multiple brands, each |
| motivations and concerns Sticking with health care for | | | | brand is adapted to fit one segment. Brand tracking is |
| an example, some seniors are motivated to act | | | | done at the segment level. The advertising agency for |
| because of service, convenience, or help with health | | | | each brand is expected to zero in on that segment in |
| maintenance. If segmentation is implemented, more | | | | its messaging and media selection. Because some |
| seniors will find the right product for them.2. New | | | | segments inherently offer higher or lower unit margins, |
| markets. Products or brands could be positioned to | | | | financial expectations of the brands are adjusted |
| meet the needs of a segment the company does not | | | | accordingly. In health care, one example is Wellpoint's |
| now serve very well. For example, many limited | | | | commercial operation organized around products and |
| income seniors have been automatically enrolled in | | | | services for different segments of |
| Medicare's Part D plans, but they don't have to stay | | | | employers.ConclusionMarket segmentation is a |
| there. If a health plan knows what this segment's | | | | far-reaching strategy that can benefit health plan |
| concerns are, it could induce them to switch.3. | | | | players. Once the targets have been set, the firm has |
| Geography. Health plans have found it productive to | | | | an opportunity to consolidate management of |
| emphasize different products and selling strategies in | | | | operations around its segmentation strategy. Every |
| different geographies depending on the mix of | | | | business function can be mobilized to take full |
| segments in those geographies.4. Direct marketing is all | | | | advantage of the opportunities that market |
| about segmentation, but it is often focused narrowly | | | | segmentation offers. |
| on internal sales analysis. Segmentation can leverage | | | | |