For most, Malcolm Gladwell is not an author that falls into the ‘marketing research’ bucket. However, Gladwell’s books, The Tipping Point: How Little Things Make a Big Difference, Blink: The Power of Thinking Without Thinking, Outliers: The Story of Success, and What the Dog Saw: And Other Adventures, often deal with the unexpected implications of research in the social sciences, particularly in the areas of sociology, psychology, and social psychology. So when I came across this TED video on segmentation and spaghetti sauce I wasn’t sure what to expect.
A complex, overwhelming methodology for many, segmentation allows you to identify and define those who are likely to benefit from your products and services, while at the same time identifying those who are not viable prospects. (Check out W5 on Segmentation for a comprehensive explanation.) The video opens with a story about Howard Moskowitz and his realization that food categories exist on a horizontal plane rather than a vertical hierarchy.
Howard’s task was the find the perfect level of sweetness to create the perfect Pepsi. While analyzing what seemed to be an endless amount of data, it became clear there would be no nice, clean bell shaped curve determining the ideal level of sweetness. In fact, there was no obvious pattern at all. Instead, there were various sweetness clusters. This lead Howard to his ‘ah ha!’ moment, they had been asking the wrong question. “You have been looking for the perfect Pepsi, you’re wrong. You should be looking for the perfect Pepsis.”
This thinking was so revolutionary that it took Howard a while to actually convince food companies to quit chasing the perfect product and instead chase the perfect products for each of the customer groups. This realization is at the heart of segmentation, and is why there are 52 different types or toothpaste, mustard, water, etc.
The video goes on to talk about Howard’s big breakthrough with Prego and the discovery of chunky spaghetti sauce (a style that was non-existent at the time, yet preferred by 30% of the market). Prego created their chunky sauce and rapidly stole market share from Ragu and pulled in about 600 million dollars from their chunky sauces.
Segmentation research has never been more valuable. Companies today face an increasingly diverse and growing population, fragmentation of media channels, and a volatile and competitive economy. In this environment, mass marketing is an inefficient option for communicating with consumers. Segmentation is the foundation of marketing. The stronger the foundation, the higher you can build, and the more you can achieve.