1. Job-Based Segmentation and Targeting Jason B. MacDonald, Ph.D. Associate Professor of Marketing College of Business and Economics Are you selling drill bits or holes?

2. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Segmentation What? – Separating large, heterogeneous markets into smaller, homogeneous markets Why? – Consistent market responses to communication – Better understanding of behavior Segmentation and Design Thinking – Focus on human values – Show Dont Tell – Prototyping

3. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Focus on the Human Values Are you proposing or creating value? Who defines value?

4. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Understanding Markets Market = Current + Potential Consumers Motivation – Do they have a problem that they want to fix that can be fixed by your product? Ability – Do they have the resources and knowledge to identify and buy the product? Opportunity – Do they have access to the product?

5. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Market Potential Iceberg Estimating market potential is more about: – recognizing what is under the water. – Figuring out how to get potential customers to the surface. Examples: – Microsoft Windows – Nintendo Wii – Facebook – Pinterest MAO M & A but no O M & O but no A M but no A or O No M, A, or O

6. Jobs- Based Segmenting © Jason B. MacDonald, 2012

7. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Segmenting Dimensions Demographics – Age, income, sex, etc. Firmographics – Geographic, sales, number of employees, etc Geodemographic – Used by Google Adwords Psychographics – Lifestyle, attitudes, etc. Benefits Sought – Focuses on the attributes people seek in a good or service Jobs based – What job do you want to accomplish with the product? – Do you want a ¼ inch drill or a ¼ hole?

8. Jobs- Based Segmenting © Jason B. MacDonald, 2012

9. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Jobs to be done Customers hire products to get jobs done in a specific situation. Milkshake Marketing +

10. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Key Segmentation Terminology Generic Job Market – Broadly defined job market that can be satisfied by a wide variety of products can be broken down into a large number of subordinate jobs. Job Market – A more narrowly defined market where employers (customers) for specific jobs look to hire qualified employees (i.e., products, solutions) and where employees try to get hired by certain employers.

11. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Job Trees, Generic Job Markets, and Job Markets

12. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Job Trees and Job Markets We segment within Job Markets Generic Job Market

13. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Job Tree for Laundry Detergent Clean Clothes Make clothes smell nice Clean really dirty clothes Avoid irritation Oil based stains Kid related stains Preserve expensive clothes Clean clothes at home Clean clothes at Laundromat Dont want to carry a lot Get clothes really clean

14. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Key Segmentation Terminology Qualifying dimension – Why we are interested in a specific job market – e.g., Do you get bored when you commute? Determining dimension – Why you hire one employee (solution) over another within a given job market. – e.g., are you concerned with getting your cloths dirty when you drive and eat? Are concerns about being healthy a qualifying or determining dimension?

15. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Cleans a Variety of Stains Gentle on Clothing Very Specialized Heavy Duty Market demand that has not been met by an Existing product Total Care Bleach Free and Gentle

16. Jobs- Based Segmenting © Jason B. MacDonald, 2012 I have to meet a client in Seattle on Monday at 10 AM I want to visit my parents over the summer I want to save money when I travel 1 2 4 5 6 3 Market Grid for Online Plane Tickets I want to save time when I travel

17. Jobs- Based Segmenting © Jason B. MacDonald, 2012 I want to improve my business skills I want to gain business experience I want to gain basic knowledge about business Market Grid for MBA Education I want to gain advanced knowledge about business Career Changer Career Enhancer Career Leapfrogger (UG BBA) Career Starter

18. Jobs- Based Segmenting © Jason B. MacDonald, 2012 I have to meet a client in Seattle on Monday at 10 AM I want to visit my parents over the summer I want to save money when I travel 1 2 4 5 6 3 Market Grid for Online Plane Tickets I want to save time when I travel

19. Jobs- Based Segmenting © Jason B. MacDonald, 2012 I want to improve my business skills I want to gain business experience I want to gain basic knowledge about business Market Grid for MBA Education I want to gain advanced knowledge about business Career Changer Career Enhancer Career Leapfrogger (UG BBA) Career Starter EMBA Professional MBA Career Start MBA

20. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Jobs-Based Segmentation & Cat Food Step 1: Team Share and Capture – Review Cat Food websites – Round Robin Contribute and Record – Focus on quantity not quality! Step 2: Space Saturate and Group – Group similar items together; dissimilar items apart – Create Labels to identify possible jobs to be done – Create a Job tree starting with the most basic job – Identify potential Job Markets on your Job Tree Step 3: Segment and Position (Time permitting) – Create a market grid prototype for a chosen Job Market – Identify segments (higher-order jobs) – Position offerings (if your have time) – Select a segment

21. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Cat Food Job Tree

22. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Summary Value is defined by the consumer Jobs-to-be done vs. traditional segmentation variables Job Trees and Job Markets

23. Jobs- Based Segmenting © Jason B. MacDonald, 2012 Identifying Opportunities From Different Starting Points Start with the job Who are the target customers? Who would hire this solution for this job? In which circumstances do they most often encounter the problem? What objectives do they have in addressing the job? What barriers get in the way of satisfying these objectives? Start with the solution What solution will satisfy the customer job? What are the solutions capabilities? What barriers does it overcome? What objectives can it address? In what circumstances will it be most effective? For what jobs is the solution applicable?