Harish Bhat

The art of creative consumer segmentation

Harish Bhat | Updated on October 03, 2013

There are sections of consumers such as senior citizens who have a distinct set of needs, but how many marketers cater to them?   -  THE HINDU

One of the first acts of any responsible marketer is to segment a consumer population, and choose the specific segments that his brands will focus on. Marketing textbooks define consumer segmentation as the practice of classifying customers into distinct groups, each of which have common characteristics and needs. This then enables the marketer to sharply target these needs through products or services, thereby building brands with strong appeal to a specific set of consumers.

Excellent examples of Indian brands which have accomplished this include the fashion accessories brand Fastrack, which targets the urban youth segment, the magazine Femina, which targets contemporary Indian women, the television channel MTV, which targets the segment of young music lovers, Saffola Oats, which targets health-conscious, relatively affluent adults, and the bestselling Mahindra Scorpio SUV, which targets modern urban upper middle class males who seek style, performance and ruggedness in their vehicle of daily use.

However, if you speak to a large cross-section of Indian marketers, you will see that most of them are in danger of falling into a “segmentation groupthink trap”, because everyone appears to be thinking identically about consumer segments. Virtually every brand wants to target youth, or women, or children, or affluent middle-aged executives, or people seeking happiness or health or weight loss. A few brands also talk about selling their wares to the rural rich, or ultra high net worth individuals, or first jobbers, or families planning for a marriage. By the time you talk to ten marketers, this all sounds so familiar and repetitive, because most are essentially talking about the same old routes to segmentation based on age, gender, wealth, geography, profession or occasion of purchase.

So I wonder: Are Indian marketers losing the plot on segmentation? Are they forgetting that the art of segmentation involves the ability to creatively carve out refreshingly new consumer groups which are large and distinctive? History shows us that many champion brands have done just that. Sony Walkman identified and then catered to a new segment of consumers who wanted to listen to music on the move. Similarly, reflect on great global brands such as Diet Coke, Absolut Vodka, Harley Davidson motorbikes, Swatch, Starbucks, or Chobani Greek Yoghurt (which is the latest big sensation in the US foods market). You will discover that all of them have thought creatively about consumer segmentation, and on this strong foundation they have become huge successes.

Does India offer similarly creative approaches to customer segmentation? Of course it does, if our community of marketers looks hard enough. Here, I provoke this discussion by detailing below a few “new” customer segments which are large and distinctive and have significant purchasing power, yet these groups are not seriously targeted by any major brands today. When will our marketers wake up to these segments, and do what it takes to build great brands which appeal to these customers?

The Elderly

The population of elderly people in India – typically, those above 65 years of age, and retired – is large and increasing. Typically, these people are also willing to spend reasonable amounts of money on their essential requirements. In many cases, their children, who earn good money, are also willing to contribute. Yet, as all brands relentlessly chase youth or new-age women because it is fashionable to do so, there are very few brands of durables or FMCG products which specifically target this large consumer segment. Elderly people have a distinct set of needs – for instance, they may suffer from weak eyesight, or infirm hands, and therefore the inability to work with very small buttons on a phone or remote control, or difficulty in handling a small, slippery bar of soap in the bathroom. But our marketers are yet to think of a brand of wrist watches for the elderly, or a mobile phone that is large, uncomplicated and very easy to use, or a soap that can be safely gripped with a shaky hand. We do have instances of banks or real estate firms developing products for this population, but, with adequate focus, virtually every product category can profitably target this consumer segment.

Large-sized men and women

Pause and look around, you will see a significant proportion of people who are naturally large sized – either of large build, or with large waists, large feet, broad wrists, or even unusually tall. Then, of course, there are fat or obese people, not a desirable physical state but, in any event, a reality that has to be dealt with. All these consumers have distinctive needs, as they search for clothing that can sit well on their bodies, jeans that can make them appear somewhat slimmer, bathroom slippers that they can easily slip their feet into, or car and airline seats that they can be comfortable in. Even their specific needs of foods and beverages will be at variance from those of average-sized people. Then, of course, some of their emotional needs will also be quite different, because of the way society perceives large-sized people, and also the manner in which they perceive themselves. Based on these insights, Indian brands can also build powerful emotive appeal to consumers in this segment, in addition to developing products which they need.

The LGBT community

Here is another large consumer segment, defined by sexual preference, that Indian marketers have largely shunned, ignored or bypassed. Lesbians, gays, bisexuals and transgenders represent a fairly sizeable percentage of the Indian population. Many of them are well educated and savvy, they are young and old, and they have strong purchasing power. Some of them are increasingly open about their sexuality, others remain in the closet. Their functional and emotive needs, in many spaces of their lives, are likely to be different from those of heterosexual people. This could extend to product categories such as clothing, fashion accessories, perfumes or deodorants, bank accounts or family insurance policies for same-sex partners. In addition, brands in virtually any category of daily use could appeal to this consumer segment by striking the right emotional chord with them. It may be difficult today for conventional marketers to visualise brands of cars or jewellery or mobile phones or shampoos for the LGBT segment, yet some smart marketer will soon discover the key to making this happen, and thereby create a new phenomenon altogether.

Cult followers

Millions of Indians are today followers of spiritual organisations, gurus and cults – which include famous names such as Osho, Art of Living and Ramdev Baba’s Patanjali Yogapeeth. These organisations wield an enormous impact on the lives and minds of their members, and on the choices they make in their daily lives. Therefore, marketers can legitimately consider such groups as distinct consumer segments. While many of these spiritual organisations have developed their own marketing arms and customised products, these are at best limited to a few categories. Indian brands have the opportunity to target these consumers with a range of other general products and services, either in partnership with the specific organisation involved, or in any other manner that respects the legal and ethical boundaries involved. Television channels such as Aastha or Sanskaar have led the way here. But what would a brand of tea or bottled water or toothpaste for a Patanjali Yogapeeth follower look like? How can marketers create new-age apparel and fashion accessories for devotees of the Art of Living, which capture their mood and emotions wonderfully well? Such segmentation is the source of endless opportunities.

These four illustrations of “unconventional” consumer groups are only the tip of the Indian segmentation iceberg. As Indian marketers search for new growth opportunities in a slowing economy, they will greatly benefit from thinking through these very different approaches to consumer segments. Some will hesitate, because of the impact these choices may have on their organisations and existing brands. Yet those who seize this gauntlet boldly will be true marketers, and they will blaze new brand trails in the future.

Harish Bhat is Managing Director and CEO of Tata Global Beverages Ltd, and

author of Tata Log: Eight Modern Stories from a Timeless Institution. These are his personal views. He can be reached at bhatharish@hotmail.com

Published on October 03, 2013

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