Details on GfK’s Proven Process for doing Segmentation

Details on GfK’s Proven Process for doing Segmentation
This presentation includes: Segmentation Process (SegMentor) How to turn and A&U into a FutureScape Where to find Materials Webinar on how to make segments live Details on GfK’s Proven Process for doing Segmentation

GfK’s research shows: Many segmentations fail because of lack of actionability!
Not Actionable Other Reasons Source: GfK As part of this initiative, wee did research—talked to marketers, researchers, etc. We learned that segmentations are thought of as: Having cute names and big budgets Delivering thick binders(or now usb sticks) —which sit on the shelf or in the drawer Providing a point-in-time, backwards look at the marketplace Failures reported by most firms: Information provided is often nice to know, but not of strategic or operational use to shape their future Single most important reason considered failures? Results not used—not actionable

Why Segmentation Studies Are Often Not Actionable?
Too much focus on methodology, and not enough focus on how the information is going to be used We also found that success can be built-in with equal emphasis on: Adequate planning, solid research and analysis, and Action-based utilization, so the process looks like this: We then designed a process to avoid these problems Research and Analysis Utilization Planning A root cause analysis revealed that in most cases segmentation looked like this—There was a little bit of planning and then a research study and analysis and all the focus was on the analytics to be used and then there might or might not be a connection to utilization of the information. There were arguments going on about the right kind of methodology to use and whether this should be this method or that, but while all that fighting was going on, nobody was asking why are we doing this work, and what are we going to do with it when we are done. So we laid out a plan that builds-in success by making planning and utilization as important as the very solid marketing science work that goes in. Research and Analysis Utilization Planning

Optional GfK Involvement
Regardless of the study purpose, all segmentation work should follow GfK‘s proven process Note this up-front work may be done as part of a freestanding segmentation study—or it is delivered by Discovery720 and FuturePath initiatives if it is part of an innovation Roadmap Stakeholder Interviews Hypothesis generation Objectives clarification Background exploration Outcome desired Start sell-in Review existing materials: past research, secondary data, marketing plans Explore behaviors, needs, benefits sought, attitudes, preferences, barriers, occasions Obtain consumer language Primary research to develop a meaningful framework of differentiated segments Define and describe consumer segments for targeting Workshops to: Bring the segments to life Implement findings in the organization Develop segment strategies Apply/link to databases Implement action plans Activate Optional GfK Involvement Assess Explore Measure And if it is part of a roadmap, or multiple phase project, the prep work of Discovery720, FuturePath etc. is heavily utilized and analyzed with FutureScape. Deliverables Talking Points Internal Assessment Market/Consumer/ Shopper Mining and Hypothesis Building Defining Market Opportunities Validating/Sizing Recommended Strategy Roadmap/Platforms Internal Socialization and Activation Access the current situation, nail down objectives, identify internal needs, challenges, background and framework Explore behaviors needs/benefits attitudes, preferences and barriers Obtain consumer language Develop and test hypotheses for segmentation Measure consumers responses to identify a framework of differen-tiated consumer segments Meet specific criteria as laid out in Accessing phase Define and describe consumer segments for targeting Activate findings throughout the organization Develop segment strategies Apply to/link to database Track/demonstrate success There are EXTENSIVE materials about these steps and other support materials (letters to clients, example decks, etc. on GFk4u, which are being moved to gNet. Search for SegMentor or segmentation process.

The Assessment Phase Purpose: Determine and assess the current situation Identify internal needs, challenges, opportunities Absorb relevant background Start to articulate hypotheses and discuss how results will be used Answer core questions, get to know your situation Stakeholder Interviews Hypothesis generation Objectives clarification Background exploration Outcome desired Start sell-in Explore Activate Review existing materials: past research, secondary data, marketing plans Explore behaviors, needs, benefits sought, attitudes, preferences, barriers, occasions (Discovery720) Obtain consumer language Primary research to develop a meaningful framework of differentiated segments Define and describe consumer segments for targeting Workshops to: Bring the segments to life Implement findings in the organization Develop segment strategies Apply/link to databases Implement action plans Now let’s go through the various tools that support the Assessment phase. At this point in the project you have already had discussions with , prepared your proposal, based on those discussions, and the project has been awarded to GfK. You will know answers to many questions (from preparing your proposal) but now you need to get into much deeper and more detailed discussions—and start the work of planning and preparing for success. Importantly, this phase is to help you really get an understanding of internal needs, objectives, etc. And start developing hypotheses to check in the research. Measure Assess Optional GfK Involvement

Assessment– Planning for Success
Identify internal needs, align on objectives and determine how results will be applied. This critical stage will include: In-person meetings at client office with key stakeholder, ASAP, to identify priorities, opportunities and challenges. Separate review of existing research, marketing plans etc. Generate and articulate hypotheses and potential actions to take, understand client expectations GfK consultation on how to obtain actionable, future-forward results and bring segments to life. Note: Include the qualitative team to begin developing qualitative discussion guides and plan. Benefits of this phase also include: Building the internal client team Shared understanding of objectives, background, challenges Start the buy-in process – essential to success and getting the results used Begin thinking about implementation and how to give the segments life! Note: Time and expense, just a few thousand euros. Do not split costs out, but fold into development.

The Exploration Phase Purpose: To better understand consumers and provides valuable input for the design of the quantitative testing Identify and better understand consumer behaviors, needs, attitudes, preferences, barriers, occasions of use in the category Obtain consumer language Further develop and test hypotheses for segmentation Review existing materials: past research, secondary data, marketing plans Explore behaviors, needs, benefits sought, attitudes, preferences, barriers, occasions Obtain consumer language Discovery720 happens here Explore Activate Stakeholder Interviews Hypothesis generation Objectives clarification Background exploration Outcome desired Start sell-in Primary research to develop a meaningful framework of differentiated segments Define and describe consumer segments for targeting Workshops to: Bring the segments to life Implement findings in the organization Develop segment strategies Apply/link to databases Implement action plans The second part of the process is the exploration phase, to better understand consumers and learn what you need to learn to be able to do the quantitative study. Assess Measure Optional GfK Involvement

Exploration – Informing the Quantitative Phase
The exploration phase focuses on building elements to load into the quantitative phase, to inform the questionnaire development and analysis plan. But it will also provide learnings beyond that goal for consideration This critical stage will include: Comprehensive understanding of the situation/ category/business problem—including desk research, review of previous work, expert interviews, etc. Qualitative work (typically) to provide a more comprehensive understanding of consumers: Needs, behaviors, attitudes, preferences, language, barriers in the category etc.. Development of attitude statements (this is critical) Further development and testing of hypotheses Benefits of this stage include: Obtain consumer terminology Get better understanding of the breadth of issues/concerns/needs Valuable input for creating attitude statements Testing of hypotheses Note: Even if you don’t do new qualitative, you still need to get input for creation of questionnaire, writing of attributes, attitudes, etc.. based on the background info/interviews with stakeholders, etc..

The Measurement Phase Purpose: Measure consumers’ responses and opinions to identify and establish meaningful, differentiated consumer segments Meet specific criteria as laid out in assessment phase Define and describe consumer segments for targeting Explore Primary research to develop a meaningful framework of differentiated segments Define and describe consumer segments for targeting Activate Stakeholder Interviews Hypothesis generation Objectives clarification Background exploration Outcome desired Start sell-in Review existing materials: past research, secondary data, marketing plans Explore behaviors, needs, benefits sought, attitudes, preferences, barriers, occasions Obtain consumer language Workshops to: Bring the segments to life Implement findings in the organization Develop segment strategies Apply/link to databases Implement action plans After the exploration phase we move into the measurement phase. This is the quantitative research and to find the segmentation solution. We start with design of the quantitative. You are all experts in doing quantitative market research so we don’t go too deep into that except on issues specifically related to segmentation. We have a section of the training on Marketing Scientists perspective, on segmentation and techniques like cluster analysis, which cluster analysis to use, etc. Note to Corrine and Annette: When we have the revised Marketing Science deck, we need to decide where it should go—as a free standing section earlier on, or in here. I could see it in either place But whichever we do it needs to be in harmony with any slides we have in this section—or we remove the slides in here (current ) which deal with Marketing Science issues and put a reference to the MS section for all issues related to statistical tools and design. Assess Measure Optional GfK Involvement

Measurement—Completing the Research Portion
Complete the research to identify and establish meaningful, differentiated consumer segments This critical stage will include: Data for input to segmentation analysis, use of appropriate tools to create the segments In-person, Segmentation Solution Workshop to review preliminary results and choose the best solution—one which meets both statistical and marketing criteria. Name the segments (in seg. solution meeting if possible) A comprehensive report that includes: Recommend segments to target, and strategy for key targets Estimate value of segments Identify internal needs, align on objectives and determine how results will be applied. Ideas to consider: If possible: give client some deliverable/involvement during the long process that the study is going on—name segments, tidbits on interesting findings, etc..

The Measurement Phase: Segmentation Solution Workshop
After preliminary segmentation analysis is done internally, a Segmentation Solution Workshop is held to review preliminary results and choose best solution and if possible name the segments This is a critical deliverable This may be done in 1 or 2 steps, depending on the complexity of the data. (usually one) Don’t rush this: only proceed to reporting once we get buy-in from key stakeholders Typically in-person (occasionally over the phone) Present are research lead, key stakeholders, a scribe Lots of GfK preparation work is necessary to do this right Critical Point: Best solution meets both statistical and marketing criteria. Statistical Criteria Are the sizes large enough, robust and projectable? Are their profiles sufficiently different, and not just hot/warm/cold segments? Are there several discriminating variables? Will they be repeatable—with the same segments be identified in future surveys? Are they stable—that is will the segments be reproduced in further runs on the same data? Marketing Criteria Most importantly: Do they work for marketing? Do they make sense, are they plausible? Vivid? Are they relevant for strategic applications, product development, communication, geographic areas, etc.? Is there a balance between informing day-to day tactics and long-term strategy (forward looking)? Are they actionable, with details of demos, media usage and sales channel? Segmentation solution meetings can be done as a single meeting or as two meetings, depending on the data complexity and, quite frankly, how much work you want to involve in, and how much you want to do in advance for them. Regardless of whether you do one or two—the timing and purpose is the same. These meetings happen after the data is collected, you have looked at the data, done some preliminary segmentation analysis internally, and it is time to get together with (almost always face-to-face) to decide which solution is best for them. Do not rush this. You need to make sure is comfortable with and fully in agreement with the segmentation solution before proceeding. If they are not fully comfortable, they will change their minds later (very painful).

The Activation Phase Purpose: Maximize likelihood the segmentation get used by taking steps to implement it in the organization (on strategic and tactical levels) Gain pin-point understanding of each segment for marketing communication, media planning, product adoption, etc. Develop segment strategies If appropriate do database modeling and link to data bases Set it up to demonstrate and track success Activate Explore Workshops to Bring the segments to life Implement findings in the organization Develop segment strategies Link to databases Implement action plans Stakeholder Interviews Hypothesis generation Objectives clarification Background exploration Outcome desired Start sell-in And so the purpose of the implementation phase, and that is the last place we are going through today, is to maximize the likelihood that the segmentation results get used by taking steps to the organization right. You have got to pinpoint understanding, the implementation can range from very strategic to very technical and also in this phase the database modeling was what we started out showing maybe we skipped that phase but let’s see how far we have come, we have an hour left. Review existing materials: past research, secondary data, marketing plans Explore behaviors, needs, benefits sought, attitudes, preferences, barriers, occasions Obtain consumer language Primary research to develop a meaningful framework of differentiated segments Define and describe consumer segments for targeting Assess Measure Optional GfK Involvement

Activation: Many Possibilities
It does not have to be over after presentation of results! In many ways it just begins then. Consider/try to sell them: Post Presentation Workshops (Utilization Workshops and Strategic Implementation Workshops) Data Mining and Modeling if the client has a customer database Deep Dive qualitative to understand key segments Set up system (e.g. in tracking work) to track success Track changes in segment over time And when appropriate update (3-5 years depending on industry) Sell extended warranty—to come back and ask you questions or to do more presentations, cross tabs, etc. for the first year or so (10-15% of costs) Activation, giving the segments LIFE is an extremely hot topic now—and one where we can differentiate ourselves. See webinar from May of 2011 on the topic. We present this to clients but do NOT give them the decks or slides. If you have a client that should see this, let Joan P. (or Lisa G if you are in Consumer) know. Link: What we would like to go in more detail is the implementation workshop, the post-presentation workshop. Of course there are also this is all kinds of stuff you do after you deliver the segmentation solutions you get more understanding so you can after you deliver the solution you can again do focus groups, interviews and so on and so on to get more understanding of the segments. Of course you do a tracking so after a while, half a year or a year you must make sure that you are successful in this segmented target so you do a segmentation tracking. And sometimes here the question comes up what are we doing in the segment sites are changing, that is quite normal but the segments weren’t stable so this is something that we would cover in the tracking or it is covered those things which are quite normal like change of size and maybe also a little bit of behavior because the world is changing of course. And then of course the last step they can do a very specific case, I talked about it, so we really don’t know into the first part and again for both presentations which is extra we have again two different ways to do it. Either we say it is a utilization workshop which is much more tactical and down to earth or not down to earth but much more practical at the very moment and then you have got what we call strategic implementation workshop and that is really a process going on. We did that and it is really interesting but it takes time and it takes results from both sides so again here you have to make sure you know what is ready to spend in terms of time and money and all resources.

An Activation Workshop Getting Buy-In and Acceptance
Activation Workshops have specific objectives, based on your situation. Roles are clearly defined: Process Owner (usually GfK if we are involved) Content Owner (Member of the your team) The goals of the Activation Workshop may include: Gaining detailed understanding of each segment for marketing communication Generating ideas on how to reach/talk to a specific segment Developing plan for business alignment to support marketing initiatives Creating implementation roll-out plans Deliverables When the day ends the team should have several ideas for ways to use the information in their marketing strategy and plans. 14 14

Regardless of the study purpose, all segmentation work should follow GfK‘s proven process This information is relevant for all types of segmentation work —including FutureScape. They should all follow this strategic process. Stakeholder Interviews Hypothesis generation Objectives clarification Background exploration Outcome desired Start sell-in Review existing materials: past research, secondary data, marketing plans Explore behaviors, needs, benefits sought, attitudes, preferences, barriers, occasions Obtain consumer language Primary research to develop a meaningful framework of differentiated segments Define and describe consumer segments for targeting Workshops to: Bring the segments to life Implement findings in the organization Develop segment strategies Apply/link to databases Implement action plans Activate Optional GfK Involvement Assess Explore Measure Deliverables Talking Points Internal Assessment Market/Consumer/ Shopper Mining and Hypothesis Building Defining Market Opportunities Validating/Sizing Recommended Strategy Roadmap/Platforms Internal Socialization and Activation Access the current situation, nail down objectives, identify internal needs, challenges, background and framework Explore behaviors needs/benefits attitudes, preferences and barriers Obtain consumer language Develop and test hypotheses for segmentation Measure consumers responses to identify a framework of differen-tiated consumer segments Meet specific criteria as laid out in Accessing phase Define and describe consumer segments for targeting Activate findings throughout the organization Develop segment strategies Apply to/link to database Track/demonstrate success There are EXTENSIVE materials about these steps and other support materials (letters to clients, example decks, etc. on GFk4u, which are being moved to gNet. Search for SegMentor or segmentation process.

5. How to Future-Proof Segmentation: The FutureScape Details

You're excited about FutureScape—now how to do it?
There are specific things you do, all along the way to deliver a successful FutureScape: In assessing In exploration In measurement In questionnaire In analysis In activation Stakeholder Interviews Hypothesis generation Objectives clarification Background exploration Outcome desired Start sell-in Review existing materials: past research, secondary data, marketing plans Explore behaviors, needs, benefits sought, attitudes, preferences, barriers, occasions Obtain consumer language Primary research to develop a meaningful framework of differentiated segments Define and describe consumer segments for targeting Workshops to: Bring the segments to life Implement findings in the organization Develop segment strategies Apply/link to databases Implement action plans Activate Optional GfK Involvement Assess Explore Measure Talking Points Access the current situation, nail down objectives, identify internal needs, challenges, background and framework Explore behaviors needs/benefits attitudes, preferences and barriers Obtain consumer language Develop and test hypotheses for segmentation Measure consumers responses to identify a framework of differen-tiated consumer segments Meet specific criteria as laid out in Accessing phase Define and describe consumer segments for targeting Activate findings throughout the organization Develop segment strategies Apply to/link to database Track/demonstrate success

Integrating FutureScape—in Assessment Phase
Client Conversations are Essential To Get Direction In discussions with client, and planning/stakeholder meeting, be sure to include questions to get a good understanding of: How success will be defined? How they expect to use it? Trends and developments in the category including: In what direction is the category moving? What are some of the cutting edge behaviors that are emerging? How about new attitudes? Areas of dissatisfaction? New product introductions by competitors? Hypotheses about how the category and usage of the category will change in the future? Improvements/changes that might occur in the packaging, pricing, benefits, configuration, flavors, (think of as many aspects as you can). What does the client/brand bring to the party Example: Wrigley’s is a great example of how to do this. The research confirmed the hypothesis that people would be open to much bigger pack sizes and wanted to store them in new locations like desk top and that out of stocks were a problem in the chewing gum category. If these questions had not been included, we would not have uncovered these opportunities. So you have to give good thought to this and include questions that are going to provide possible direction—to test hypotheses

Integrating FutureScape—in Exploration Phase
Design the qualitative and research review to identify consumer view of: Their category behavior What are they doing more of/less of? What do they wish they could do? What new items have then seen or wished existed? How is the category used differently than in the past? What do they expect to change in the future Test the hypotheses developed in the planning phase Identify additional hypotheses about how the category and usage of the category will change in the future Explore improvements/changes that might occur in the packaging, pricing, benefits, configuration, flavors, (think of as many aspects as you can). Consumer 720 provides tools to do this

We believe that a thorough understanding of the target group and their experiences interacting within the complexity of evolving needs and categories is a pre-requisite for tomorrow’s truly successful innovations. GfK Discovery720 is more and different. Consistent framework based thinking allowing comprehensive and relevant visualization The 720° “2 lens approach” – looking at all players holistically Considers consumers, customers – all stakeholders GfK Discovery720. The stepping stone to mastering the complexity of the future. Our Journey Begins Here.

GfK Discovery720 Discovery 720 FuturePath FutureScape
A two lens view to mining richer insights Understanding both people and markets for better hypotheses building Unlocked through a full suite of classical and digital techniques and methodologies Stakeholder Interviews Desk Research 360° BROAD view 360° DEEP view In-Situ Discussions Ethnography Expert Evaluations T-Groups Semotics … Exploration Workshops 2 should be written out as two not 2 SocioLog.dx Psychodramatic Roleplay (Video) Storytelling Positano … and viewed through our 4 Cornerstone Driver framing

Why Qualitative?... much more than right language!
Developing a range of hypotheses that stretch the client thinking to ensure a better deliverable in the end Helping clients see the world in a new way helps create the opportunity for developing meaningful roadmaps for change and growth GfK Best Practice Thinking: Clients typically define their competitive set too tight? Inhibits finding “white space” - if too tight only find dis-satisfiers in current space Consumers see world through the “jobs” they do (not just the category at shelf) Recruit based on participation in “job” not on category usage The SAME consumers may have different needs within the context of when and where the job is being done – need to know the differences Understanding “extreme consumers” opens us to a continuum of understanding and better attribute lists Most client research rarely looks at these extreme consumers so likely they don’t know the emerging behaviors and attitudes Think about: product rejecters, cutting edge consumers, influential consumers, new/young consumers, etc Adding value to how a client thinks Push their boundaries

Integrating FutureScape—In Measurement Phase
Questionnaire/Study Design Inclusions: Make sure that the questionnaire includes questions: 1. To measure anticipated changes in category or brand behavior): Projective questions about potential future behavior (which of these do you expect to do more of in the future) If they are “open to” other types of behavior 2. To test client’s hypotheses These were articulated in the kick off meetings and stakeholder interviews. 3. To help define segments that are more future-focused or evolved. Include questions on cutting edge behaviors, dissatisfiers, etc.. to identify (and size) the number of people who are exhibiting these behaviors Example, SI used emerging lifestyle attributes to help size emerging spaces like “on-the-go” outside home and find targets that were more “evolved”. 23

4. To tie attributes back to the four drivers (for development of platforms, concepts, etc..) Frame all attributes / attitudes / benefits / features to SI’s four cornerstone purchase motivators (Convenience, Safety, Wellness, Gratification). To do this, each individual attitude, benefit, etc.. will be coded for use in data processing and analysis. Nets will be created and reported—to add further understanding to segment profiles. 5. Make sure that the questionnaire includes the questions to identify category involvement and leading edge consumers (Shown earlier): Passion for category Influential questions (Roper or surrogates) Early adopter behavior

5. OPTION: To further understand segment receptivity and adoption to new ideas, test some brief new idea statements. (Shown earlier) This is an option to consider if such ideas exist. These should be written as brief statements (e.g. one line trigger ideas that are inspired by Innovation Branches or Paths if this work has already been done, or anticipatory ideas). Include ideas from competitors, or those that have been tried in the past for further insight 6. OPTION: To provide a more comprehensive view of consumers and tap into macro trends, consider expanded categorical questions, beyond demos. Consider adding additional questions on macro trends, or use psychographic and lifestyle questions as possible active variables in segment definition 7. Include estimates of FUTURE segment value in your analysis There are numerous ways to do this, including total segment value (see next pages) as well as estimation of composition of segments to feed sizing of platforms, etc. (Shown earlier)

Integrating FutureScape: In Activation Phase Provide a typing tool and help the client incorporate these questions into other research. Typing Tool: Shortened list of discriminating questions to assign respondents to a most- likely segment Very helpful in future research efforts Segmentation pricing generally assumes one typing tool will be created Predictive accuracy depends on the number of items and number of segments Note: Our simulators are built with the ability to specify the minimum accuracy you want—so if you are screening for focus groups, for example, you can set the accuracy very high to provide greater assurance that the people who attend are good representatives of the segment.

Sales Support Materials

Support Materials gNet is your first resource—Go to the MOI Wiki: 1) Click on solutions under communities 2) Pick the Market Opportunities and Innovation box, by clicking on the green lettering, 3) Click the Wiki tab Or search “MOI Wiki” in search box and click on the MOI Wiki link 2 1 3

Find materials here: including this deck.
Where to learn more about FutureScape Find materials here: including this deck.

Training modules: On each product, plus - Leading Edge Consumers
- Coding of Predictive Benefit Framework - Running workshops - Sizing opportunities - With more added each week

Primarily Training Materials for all GfK Branded Products
Specifics Completed - General practitioner’s training deck (used in Korea, India, Australia and expanded to most recent Brazil 9/12) - Estimating opportunity sizing and segment value - How to do respondent flow chart - Incorporating Trigger ideas into FS - LEC Early adopters, influentials and passion - Segmentation solution meeting - Profiling - Client workshops - And more…. Core Training session decks – client facing Training session decks – practitioners or analysts* Level 2 1. How to do Analytic Sections: (e.g. modules, gaps, drivers, etc.) 2. Q to ask to get to the right design 3. Pricing examples; estimated hours per step simple ideas; 4. Implementation Meetings: Process, agendas, output, action plans Level 3 Competitor overviews Operational standards/expectations Feedback mechanisms Other support materials as needed *Items in green are completed

Status of materials on gNet as of 11-8-12
MOI Discovery720 FuturePath Future -Scape Smart-Creative Concept-MAX PriceMAX Price Chal-lenger SmartProg-nosis Slip Sheet x Key slide(s) Sales Deck Case Studies Proposal Example x Report Example none Q. Example Other Practitioner guidelines Internal training Many training modules Workshop-ping materials Multiple cases, applica-tions For all products Leading Edge Consumers, Predictive Benefit Frameworki

List of Completed Sales Materials ( and where filed)
Level 2 Proposals, sales decks, reports by sectors and geography: Case Histories by industries/ sectors and region (FMCG, HC, CHC, B&T, B to B, Financial Services , Other) 3. Client Input: e.g. templates for conjoint they fill out, input for volume forecast, etc. Level 3 Modules for special application (Global, B to B, Financial Services) Client testimonials or quotes Other support materials as needed Core Completed on gNet 1. POV on product--what it stands for 2. Competitive Recap 3. SlipSheet: 2-4 page promotional piece 6. Elevator pitch slides 8. Questionnaire Example(s) (core plus modules) Plus: Case studies four 1 page and 2 longer Plus: Practices in segmentation rollout— making segments live In the works/awaiting feedback 4. Sample Proposal(s) 5. Standard Sales presentation 7. Standard Report (Tums and Snausages 9. FAQ *Items in green are completed

Resources for art and science of segmentation
Available on gNet Expanded version of this deck which includes all these slides plus: Complexities of segmentation : Why it is so difficult and how to do right Planning and setting up the Seg Solution Workshops Who should be there, objectives, etc. Example deck from meeting Written but not yet posted (need to update the template) 1. Segmentation solution kit which includes: Letter to client explaining what the meeting is and whom to invite Memo to internal team explaining the process Example of Marketing Science Output (currently this will differ by country) Example of a presentation deck Example agendas How to create flow chart of segment creation/respondent movement Other materials being added constantly

Coding FutureScape in the accounting system
Here are the 2013 codes used by GfK to keep track of the types of work being done Navigator name is no longer being used—you see it is combined with FutureScape in the coding GfK emphasis on trying to sell more branded products to global clients—so solve the client’s problem first—and use the FutureScape name when possible

Wired Ones Stuck in Traffic Information Seeker Mystery Lover Happy Landings Thinker Important Note: This presentation can be presented to clients but NEVER give them a paper or electronic copy of it. Bookworm Let Me Show You Lost in the Clouds Talker Home and Family First Listen to Me Book Clubber High Flying, Adored Talk to Me Homebodies Classic Chic Discerning Duos Party People Best Practices in Making Segmentation Come to Life Regular Guys &Gals

Types of Segmentation The examples on the pages which follow are about consumer segments—we divided people into similar groups and then describe them in many creative ways. Within FutureScape there are other types of segmentations too, as we discussed before: Occasion segmentation Product segmentation Need state Meta segmentation (multiple solutions) And there are segmentations that are not FutureScape So as you view these examples, please keep in mind that the concepts described apply to all types of segmentations.

1 Start with the End in Mind
Starting with the end in mind is critical to achieving actionable results. In fact, success at the end depends on what you do at the beginning. Three key ideas here: Get an executive sponsor who can support the program and make things happen Consider branding the program for more impact and attention Plan for success by thinking about implementation well before the research is in the field Nothing breathes life into segments like a well designed and executed project with support from the top!

2 Name the Segments Carefully choose descriptive segment names.
Appropriate naming is critical to communication Strive for names that: Utilize a consistent naming convention, parallel structure or a theme Are simple and memorable Are easy to pronounce Aren’t ambiguous; don’t have double meanings Will resonate with retailer partners The choice of the best names is as much art as science—so get your ad agency involved, early This process takes time and feedback to get just right, especially if the names are customer facing or used outside the company (e.g. with the trade) Test for clarity and understanding among those not involved, before finalizing them Note: Some firms (like Best Buy and their famous Jills and Barrys) use human names to personalize while avoiding potential bias

Example Names

3 Use Icons or Pictures Use icons or pictures to help communicate key segment differences, but keep them simple. An image provides an immediate visual impression—a mnemonic—to help describe and differentiate segments and so is highly recommended Use icons where possible, for concise communication of key traits of that segment in the category Icons also translate well across counties Use of a single photo of a person is not usually recommended, as it can skew understanding of the segment in terms of age, gender, race, etc. If photos are used, we suggest using several of them in a collage

Use of Icons vs. Pictures
Use of icons is recommended But if you do use pictures a collage is preferred Dog Lovers Information Seeker Hypothetical Names and Icons for Publisher Mystery Lover Bookworm Book Clubber Thinker Talker Young Professionals Home and Family First Listen to Me Talk to Me Let Me Show You From Customer Loyalty Segmentation

4 Create and Communicate Personas for Key Segments
To make them seem real—act as if they are real: Give them a human name, like “Carla Carbon Cultured” Make a Facebook page for them Have them blog about themselves and their beliefs, activities Do “A Day In The Life Of…” portraits of them Have an internal address for them where people can ask them questions or engage in conversations with them Capture snippets of what they say about your category and make them available online on a portal created for this purpose

Ideas for Developing Personas
It is may also be possible to project the segmentation solution into the Client‘s user database Ideas for Developing Personas Fixed line phone Smoking area DJ Booth Bar Toilets Dancefloor Seating area Video personas make the segments more tangible, more real. Typically they are created through qualitative work, among respondents who participated in the quant phase. Careful screening helps us find people who clearly reflect the segment attributes. Video and audio clips help imprint insights in the audience member’s memories. The Party Game can delve deeper into personality traits and emotions. People are shown a party scene and are asked to put themselves in the scene. In this role, they are often better able to chat about themselves, their personality traits, and the reasons behind their behaviours. They can also share talk freely about their relationship to the category. A household journey adds important details. People lead the moderator on a trip through their house. They stop and comment on where they use the product, providing information on usage scenarios, frequency, likes, dislikes, all done “in situ.” Photos can be used for even better communication.

Segment Portrait—Illustrative Example “The Internet Oriented”
The Internet Oriented are the youngest segment (average 39). They are more highly educated and higher income, and more likely to be male. They include more self-employed and profes-sionals and use Client X people than average. At work, they use Client X- applications a lot. They are interested in innovations in the Client X-environment, and they are early adopters. When it comes to shopping for technology, they are most likely to do their research online—but purchase offline. Cell phone and notebook are permanent companions in everyday life, without those two nothing at all works. They have a strong need for mobile usage of the Internet. A Day In The Life Of….. “I want my contacts and appointments on my PC to synchronize continuously and automatically with my cell phone.“ “I buy or use innovations in the field of telecommunications mostly direct after commercial launch.“ “Since I use the Internet, my behavior in private life has changed considerably.“ “I want to use the Internet on the way.“ Here is another example, showing an Internet-oriented segment, with a summary on one page. Clients love this, everything on one page and then they can take this and make laminated cards out of it for example. We also use the idea of “the day in the life of” segment members—e.g. in the cell phone area: the wakeup call comes from the cell phone, they review news online and sees interesting articles. Have conversations on PDA or cell phones and then noontime appointment for the lunch reminded by the PDA, and at night ticket reservations and a sneak preview. One we made for Ford Motor Company and then there are three of them here for Pizza Hut so pass those along and then a little notebook that we made up for typists. One other quick thing and that is also the visuals here, Annetta has got really good pictures and stuff and so a lot of our stuff we pick up from either Google images or from GfK click search, there is wonderful artwork there and it makes them so much more personable so if you are not using click search I would encourage you to do so. And then there is another from layouts but that is another option to show it in one page to say okay what is the social demographics and what is the structure of the need and what is there affinities and state of the budget in all these categories right and you work with signs. It doesn’t look very as a very good overview from the distance now but if you have it in front of you and for every segment one page and you can compare the segments and you know exactly what is going on. So this was another example from another project we did you say okay for every segment you have a name and the name again says something about the segment. Then you have a very short description, so this is what they do and then you have kind of two segments about it, the modern, the socializer with the social scene and is interested in all applications. Then you combine it and then you go ahead and describe it and this is also a way how to illustrate segments or for the same group you say what does it mean and of course you cannot write the marketing program for the client right. You cannot do that because you don’t know the internal stuff and we will come to that point later on but what you could do is you could do very preliminary from the research-driven recommendations of the product and pricing on communications. So here for example you say these people want to have services that make it easy to communicate with more than one and they want to talk so they need like multi-talking services. So you can derive some general recommendations of course these have to be approved by the client later on but it is interesting or it is good to show the client that you think about what they need for their marketing. That again was it the same project no? 7AM 8 9 10 11 12PM 1 2 3 4 5 6 7 11PM Lunch appointment via SMS Ticket reservation via internet Write private s, last check of business s Synchronization of mobile device: Appointments, news, and music Connection via hot spot with PDA to download directions to the meeting Reading business relevant blogs First coffee in front of PC: read news online and save interesting articles for on the way. Short notice arrangement for the next meeting by cell phone Demo news to the business partner during lunch on mobile device The wake-up call comes from cell phone.

Agreement Indexed to Total
Meet Careful Carol “I am much more influenced by people and stores than by the Internet.” “I shop for my entire household, but I also take care of myself.” When at a store, I respond to… 64% Shop for children 0-18 Carol shops 5.5 categories on average I get fashion ideas from… Her most often shopped categories are A and B 40% 13% “Give me the best price!” “Although I have traditional values, I am not old-fashioned.” Core Values Honesty Protecting the Family Home/work Balance Playing Giving Back Enjoying Life Social Tolerance I will switch brands to use a coupon Price is more important to me than the brand When I find a brand I like, I stick to it I buy based brands I like Known brands are better quality Agreement Indexed to Total

5 Estimate and Communicate Segment Value
Calculate and communicate the value each segment. All segments are not created equal! They have different potential value for: The brand The category Various retailers GfK works with you to define the variables that drive value and cost using our Value Mapping in order to address these business issues for you and your channel partners: What is the current/and or future value of each segment? How well does your current business model serve each segment? Which segments should you target? Ignore? When possible we estimate market sizing and approximate dollar value per segment

Estimating Value and Opportunity For Each Segment
Segment E has the most potential for future revenue… Segment A Segment B Segment C Segment D Segment E Invest and Grow Why Bother Do it Now Let it Ride Segment E has the most potential for future revenue Segments C and E have the highest cost Segment C & E have the highest cost… A B C D E Product A B C D 48

6 Create a Typing Tool Create a typing tool to classify people into the most likely segments. A great way to extend your segmentation research is to develop and use an algorithm and “typing tool” to classify people into the most likely segment You can use it for other research, and thus tie your segmentation to everything you do: Qualitative screening Brand tracking (or other research) Panels, omnibus surveys or syndicated studies Plus consider putting… The questions on the web page to help you understand customers or prospects

Typing Tool & Algorithm
Segmentation Tool Products Attributes Segment Assignment 0% 7 = Strongly Agree, 6, 5, 4 , 3, 2, 1 = Strongly Disagree Confidence: Variable 1 2 Variable 2 1 Assigned Segment: Variable 3 1 Segment 3 Variable 4 2 Variable 5 2 Segment Probability Variable 6 1 Segment 1 0% Variable 7 4 Segment 2 27% Variable 8 2 Segment 3 72% Variable 9 2 Segment 4 0% Variable 10 6 Segment 5 0% Variable 11 1 Variable 12 1 Variable 13 6 The Segment Assignment Confidence box above allows you to adjust your confidence in the accuracy of segment assignment. The higher you set this confidence, the more sure you can be that a customer fits into the named segment. If a customer's responses do not result in one of the three segment's probabilities exceeding the Segment Assignment Confidence level, the tool will not classify the customer. Variable 14 1 Variable 15 4 Our tools include the ability to set accuracy range—which is particularly helpful for qualitative screening to explore specific segments.

7 Create A Variety of Tangible Deliverables
Physical reminders of segments and their names, or key characteristics, can go a long way to giving segments life. In GfK’s experience, the most successful segmentation studies have included steps to make the segments seem more human, more personable, more alive by providing summaries and reminders There are a lot of ways to do this—in fact the possibilities are almost limitless 7 Create A Variety of Tangible Deliverables

Tangible Deliverables: Create Segment Summaries in Two Dimensional Space
Core Segments, Based on Loyalty Artful Audrey Lively Lisa Careful Carol Make My Mark Whimsical Wendy Cheap Cate Plain Jane Most Loyal Loyalty Least Loyal Perceptual Mapping of Telecommunication Segments Empty Nesters Mid-life Males Empty Nesters Working Moms Moms with Teens Young Families Young Professionals Single Young Females Upscale Young Young Minorities Teens

Tangible Deliverables: Use Audio and Visual Tools—and the Internet
Portray them artistically with: Posters Use more than one sense, with: Videotape segment members and do short vignettes Use audio tapes of quotes (or actors/staff members) Create a web site/portal for the results Make presentations, reference guides, videos, algorithm/typing tool, segment photo collages, etc. available on corporate intranet Life-Size Cutouts Caricatures Photos

Tangible Deliverables: Make Books or Brochures
Communicate segments by: Creating laminated cards with key characteristics (cheat sheets) Making a flip book of key segment facts Getting creative! Haiku’s anyone?

Tangible Deliverables: Tchotchkes Anyone?
Brand your gear: Put the name of your segments, their icons, and/or or descriptions, on advertising specialty items. Talk to Me Talk to Me Talk to Me Talk to Me Talk to Me Talk to Me

Deliverables tailored to your audience
Who are these stakeholders? What type of information do they need? When will they reference our research insights? Where will they look at our deliverables? Everyone Needs An action plan Every day Everywhere Executives Need A complete summary On-the-go In the elevator GfK Provides Overview Laminated Summaries GfK Provides High-level laminated summaries One-page infographics Takeaway booklets GfK Provides Trade-facing summaries Retailers Need What segments shop them What those segments want How to maximize their value GfK Provides Flip books Data Summaries Demographic profile summaries Marketing & Sales Need A 360° view While developing a plan With their remote team GfK Provides Data Tables Details Marketing Researchers Need Detailed data As questions arise On the phone

8 Assign a Segment Manager
Assigning official or unofficial segment managers is another way to leverage segmentation work. This is a great way to make sure key segments are included in business thinking and decision making Even if you are not organized to accommodate segment managers—you can unofficially ask people to represent them at key meetings or decision points It’s even helpful to rotate segment assignments—giving you a chance to walk in the shoes of different segments over time The segment manager asks questions on their behalf: What would segment X think of this? What would they want to know? How do we best communicate with them?

9 Market Your Research—Internally
Segmentation results often can impact the entire organization—so, as appropriate, let people know what is going on. Some beginning ideas: Keep information flowing to stakeholders after the kick off, like status updates, and as data comes in send a few tidbits of information out Introduce segments at national sales meeting Put segment membership on your business cards or nameplate Use the company newsletter to write articles about segments Conduct company wide web-casts or lunch and learn programs Use a presentation and quiz on the intranet

Marketing Your Research Internally
Use the company newsletter and create a portal to: Profile the overall segments scheme and segments Highlight how people are using segments to sell, make better decisions or better serve customers. Conduct company wide Lunch and Learn’s or Web broadcasts to: Spread the word across the organization about learning And what you are going to do with that learning. Invite members of key segments to come to lunch and talk with your employees. Use a quiz at presentations and on the intranet. Challenge employees to see how well they know your customers and segments. Have people fill out the quiz before the presentation—and then see how well they did!

10 Market your Research—Externally to Channel Partners
Don’t forget your channel partners—as they play a major role in achieving success from segmentation. Besides marketing your results internally, be sure to include your retail channel partners. Inform them on what you did Share results with them and Educate them on how you can both use these results to mutual advantage.

11 Conduct Implementation Workshops
Don’t stop when the research is presented. In fact, a lot of the work starts then. You need to include: Communication & Educational Tools: Successfully communicate segments to the wider organization, channel partners, and individual stakeholders needs Activation Tools: Implement and embed segmentation across the business, ensuring that it is used as a basis for identifying opportunities/threats and decision-making Strategy & Planning Tools: Provide support and training to ensure maximum utilization Plan post-presentation implementation meetings…

Implementation Workshop Example Output
Achievers Fashionistas Solution Seekers Dynamic UI: interior design for the phone Showcase lifestyle/ fashion content What is the ‘killer app’ or offer? m-commerce DIY: Build your own benefits/features Exclusivity; ‘first to try’ club What type of device do we offer? Feature rich converged devices to counter iPhone ‘Signature’ line of phones (e.g., Michael Target) Feature rich, converged PDA phone; function over brand/style What do we say (acquisition/ retention messages)? Newest advanced services and widest selection of cutting edge devices Offer the hottest, up-to-date devices, accessories and content Using advanced technology to create practical solutions Maxim PC Gamer Cosmo MTV, VH1, Adult Swim Marie Claire Entertainment Weekly Rolling Stone MTV & VH1 Fortune/Forbes Wired/PC Magazine Sports Illustrated ESPN & DIY Network Where do we message?

12 Do Additional Qualitative for segment deep dives
Conduct post-segmentation qualitative to better understand segments, especially key segments you will be targeting. Use the typing tool to identify those most likely to be in a segment—and try to recruit for those that are core segment members Then get to know them even better with Traditional or online groups Bulletin boards One-on-ones Or ethnographies

13 Connect Results Extend your results by creating predictive models and/or “fusing” results to other data Uncover how to target and reach specific segments with fusion with other data sets or media consumption data Consider incorporating algorithm into Nielsen, IRI or Roper Reports Incorporate retailer/partner segmentation algorithms into your study Integrate the algorithm into your own tracking and other research efforts Link results to your customer/client database

Case Example This example is from a proprietary GfK study—Green Gauge.
GfK Roper Green Gauge® Global provides global marketers with an in-depth look into green consumer trends, attitudes and behaviors in 25 countries. It provides expertise to help marketers develop greener global brands detailed and actionable insight into: The top environmental concerns facing consumers and how these differ across countries Perceived and actual barriers to green behavior The role individuals, business and government should play On the following pages you see how GfK used some of our ideas to make these segments come alive! Typing tool Laminated booklets Posters Audio Clips (on Carla’s poster) Facebook page

Green Gauge consists of five segments which differ in their attitudes and actions towards the environment.

The Green Gauge Global Segmentation
on the seven dimensions of green… Concerns Least Concerned Most Concerned Attitude towards Institutions Least Responsibility Most Responsibility Most Barriers Fewest Barriers Barriers to Green Attitudes towards Green Products Least Accepting Most Accepting Consumption Decisions Least Consideration Most Consideration Activism Least Activism Most Activism Information seeking and Influence Least Informed Most Informed

Find out your Green Gauge Type!
Click here to start

Find out your Green Gauge Type!
Click here to start Congratulations! You are a…

Getting to Know Carbon Cultured Carla
Intro for Kathy 71

Who Is Carbon Cultured Carla. She is very concerned about the
Who Is Carbon Cultured Carla? She is very concerned about the environment—but her actions sometimes lag. She does easy things that are expected of her (recycling, conserving energy) and she will do her best to take the environment into account when making purchase decisions, but she may need a little more help, education, or encouragement in taking the more difficult steps. She is married, has at least one child, and works outside the home. Gender HH Size Family Make Up/Lifestage Parents Married/living together 3.2 44% 56% 65% 3.12 Avg  60% Income High 30%  Medium High  Medium low 20% Low 10% Refused 9% Occupation Education —Age 15-19 —Age 20-29 —Age 30-39 —Age 40-49 —Age 50-59 —Over 60 Age Avg 41.1

Products Owned in Household
What type of consumer is she? Carla carries a credit card and is likely to own equities, as well as hold a mortgage. She is big consumer of technology—and her household is likely to include a wide variety of tech equipment. And she uses it— ing friends and family but also participating in online communities, listening to podcasts, doing IM, downloading music, etc. You can certainly reach her online. Saving money is also a big deal to Carla. Financial Products Owned Products Owned in Household Where She Shops Credit Cards 75% +13% Stocks/Bonds Etc. Mortgage 31% 27% +5% +8% How She Spends Her Time Spend hours per week cooking and cleaning 76% shop for groceries weekly 49% cook for fun 33% go out to eat weekly Less likely to agree they like to buy products with prestigious brand names, or that she only buys from trusted brands

Where is she and what does she value. She is present mostly in the
Where is she and what does she value? She is present mostly in the developed world, where 'green' has been on the national agenda for a while. She has strong core values of protecting the family, honesty, self reliance, freedom and authenticity. She is much less likely to be about power or achieving wealth and status. High Medium Low What does she value? Stronger Values Protecting the family 81% +4* Honesty 77% +7 Self Reliance 73% +5 Freedom 71% Authenticity Weaker Values Power 12% - 9 * Self Interest 13% - 8 Wealth 29% - 7 Status 23% - 9 Faith * Difference from total

Stefan & Mona – dinner: Carla, 41, Accountant Carla, 41
Carla lives on the North side of Chicago and is married to Chris. She’s aware of many of the current environmental issues through the usual news channels. Recognises that something should be done and that we all have a responsibility to “do our bit”. Less confident than most in her economic future. Very interested in Cooking and entertains in the home regularly. Recession-savvy: More likely to have made cutbacks than most, perhaps this explains the above. Uses coupons to reduce costs. Carla, 41 Accountant Stefan & Mona – dinner: ~7pm Thurs Click here Switch Off lights!!!

Carbon Cultured Carla’s Blog

Three of GfK’s All Time Favorites
1. One client made life-size cut outs of their target segments and place them on display in conference rooms throughout the office, wherever staff congregated. These serve as a constant reminder to all (especially manage-ment and marketing) as to who the customer is. 2. Another client, who markets personal care products, designed conference rooms to coincide with key target segments, like that for a teen age girl shown at the right. Really helps you get in the spirit! 3. And finally, our favorite: A client in the alcoholic beverage category decided to really get to know their target segments so they threw a party—actually several parties. They invited segment members to join them for a drink in an appropriate bar (for the segment). They did this several times, once for each key segment.

Details on GfK’s Proven Process for doing Segmentation

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