SEGMENTATION

Segmentation helps to forecast and analyze demand segment-wise; understand market needs and evolve different strategies focused on the target segments; design, launch, and promote appropriate services; and develop an appropriate organization.

Segments must be differentiable and measurable so that quantifiable targets can be set and specific strategies and packages could be devised. One has to choose which or all segments one has to serve and focus based on the strengths and resources available. One can use differentiated packages for different segments. Or use a specific concentrated strategy, if one has to approach one segment at a time.

In either case, it is important that the segment being addressed clearly notices the focus on it. Customer education plays a key role here. The benefits offered should be not only easy-to-understand for all, internally and externally, but also immediately accessible and measurable. The results have to be monitored for timely corrections: test marketing can help save the costs!

These segments have similarity with those based on "usage rate" employed by most duopoly operators like the two in Singapore: MobileOne and SingTel. With simple explanations to identify and address each of their segments, they attract the potential subscribers' attention and make them sign up. Besides a behavioural parameter like usage, there are other parameters like demographic (e.g., age) and psychographic (e.g., snob value) which can be used very creatively and effectively. Essar used its prepaid card to address budget-conscious, tourists, and no-bill segments, positioning it as an FMCG, tying up with hotels and gas stations for recharging.

In a competitive situation, one has to constantly monitor and analyze competitor's segmentation and positioning strategies. One can explore if certain niches are available to be addressed quickly. It can mean providing coverage to stock exchange or a key business entity. Or synergize with a hotel. Sometimes, niches are available for short duration like a cricket match. One can employ USPs to address niches: like in the multi-operator Hong Kong market, Hutchison is focusing on China roamers. It may be costly to fight for the segment where competitor is deeply entrenched as loyalties are difficult to change overnight, in particular of a subscriber well served.

In order to reach the targeted segments one can go for direct marketing using data-bases or use promotion for self-selection of the offer by the subscriber. However, one has to be careful in positioning the service in such a manner that it is perceived as of interest to the target segment(s). The brand positioning and segment strategies should be complementary, without creating conflict in the subscriber's mind looking for the right bond.

Dilbert Principle: "No matter how pathetic your product is, there is always somebody who can't tell the difference: The job of marketing is to identify these segments."