Segmentation in Millenium Era

Is segmentation and targeting still relevant in the millennium? Philip Kotler, Hermawan Kertajaya, and Iwan Setiawan wrote this in the Marketing 3.0 book, that in the Information Technology era where consumers connect with each other more often, have different concepts. Not segmentation, targeting and positioning, but communitization or targeting in the community. Marketers market their products to more and more communities.

Even so Kotler’s opinion, if compared between segmentation and communitization, communitization contains segmentation and targeting as well. Segmentation divides the market into small segments, and each segment has the same characteristics of interest, even though they are not connected. Whereas communitization is a group of consumers or just consider segments that are connected to each other. As a community, they serve one another among them. According to Godin, the community does not serve business marketers. Even so, communitization is one type of market segment based on likeness. Even the segment has formed coordination with each other.

Thus segmentation and targeting are still important in the millennium era. When business competition is getting tougher, in addition to trying to make better and more beneficial products, it also strives to enter different market segments that are not affordable to competitors or not too tight competition.

Kotler, Hermawan and Iwan in Marketing 4.0 explained again, the difference between STP (segmentation, targeting and positioning) with the community. The community is a segment, or a small group in the market. But the difference is, because they are connected, they reject marketing interruptions, spam, and irrelevant advertisements. STP still considers the segment a passive target to accept persuasion, while communitization is an active group that has their own will, serving each other between them. The best approach is to observe their development and participate in serving the community members.

It’s true that Kotler and his friends say they reject marketing interruptions, spam and irrelevant advertisements. Even so relevant ads are still possible. Examples of advertising on Google Adwords and Facebook Ads. Ads on Google Adwords allow people to place ads that are relevant to the keywords that someone is looking for. The keyword reflects interest. Advertising on a keyword means an advertisement for a group of people who are expected to match their interests. For example a hotel ad in Karimun Java, can be displayed for people who write keywords: cheap hotel Karimun Java, tourism Karimun Java, the best hotel Karimun Java. Ads on facebook ads can also target groups that have particular interests. Facebook has artificial intelligence that allows it to detect someone’s interest, then Facebook lists the interests of Facebook users. Thus, advertising on Facebook and Google seeks to bring together advertisements with relevant target markets and avoid irrelevant target markets.

Disruption in Marketing Concept

1. The nature of promotion in marketing changes from interruption to permission, the approval of viewers without an editorial intermediary such as the mass media. Promotions in the era of mass media are interruptive or interrupting. Advertising can be done by interrupting viewers while watching an event. For example on a television program, Dangdut Academy, there are various advertisements inserted into the event. The level of exposure to the advertisement to the viewers was very large, even though the viewers had a remote control, because many viewers did not want to risk losing an event because they moved television channels. Besides, on other television channels, there is also a possibility that there are advertisements.

In internet interactive media, viewers have very many choices compared to when using mass media. Viewers can choose the theme they want on the search engine, then read see and listen to a presentation, both in the form of text, sound, image, and combination.

If the ad interrupts in interactive media, viewers will fight by ignoring it or marking it as spam. There is a tendency, online platforms such as search engines, e-mail, and social media provide facilities to deal with spam. So that bombarding viewers with advertising messages as is often done in the mass media, is no longer valid or at least the effectiveness decreases in internet media.

How to encourage viewers to be willing to pay attention to advertisements. The opportunity that can be done in the middle of interactive media is by giving them information or entertainment first. Compiling information according to the needs of the audience, it is very possible to do in e market needs information has been tracked and mapped on search engines and social media.

Another way to get their attention is to place ads on only interested people. When the offer in the advertisement matches the needs of the market segment, they feel undisturbed. Search Engines and social media provide facilities to customize advertisements with people who have interests. Information technology supported by Artificial intelligence is able to identify viewers’ interests.

Artificial intelligence’s way of working to recognize one’s interest is as follows. Internet users can track their profile, not only from what he wrote on the form, but also what he did. Google not only knows someone’s profile from the form he wrote in the e-mail (name, address, telephone number), but also records what someone writes on the search engine, what web is widely read, how long to read a particular web, or a particular movie broadcast . The track record on the search engines is analyzed by an artificial intelligence engine to identify their interests and what advertisements and content are appropriate for them. Marketing character changes from interruption to data-based marketing and is increasingly personal.

Facebook also records not only data that viewers write on forms, but also records what status is written, photos, videos shared, and what their reactions are to the status of others. Artificial intelligence Facebook is able to detect even photos they upload and make it as a signal of their interest. Suppose there are people who have never written cats on their status, but he uploaded photos of cats, Facebook technology is able to identify photos of the cat and be used as a signal to recognize interest. Not only photos, technology is now able to recognize videos uploaded by someone, and make it a signal to recognize their interests.

2. Mobile internet devices that can be carried everywhere will be a trend that is widely used by people. It’s not only smart phones, but also clocks, glasses, will be widely used. That is not only an opportunity for gadjet marketing but also completes marketing with market profile data. The more mobile devices used, the more market profile data can be identified. If many use bracelets, the market profile data will show more details about the places they often visit, about their activities, their level of health and so on.

3. With the strengthening of the use of information technology, marketing competition with information technology-based will strengthen. There is a race to get more with and adjust between products and market interests. Product and service offerings are based more on market needs. Proximity to viewers is getting stronger, transparency between marketers and customers is getting bigger. This is increasingly becoming the standard and demands of customers. Customers want marketers to be more responsive in communication. Companies that only deliver messages and leave without caring about customer responses will be abandoned, both by customers and by algorithms of social media and search engine platforms.

With the ability to track market response, market metrics

Technology and Business Disruption

This third millennium era is synonymous with information and communication technology. According to world stats, internet users in 1995 amounted to 16 million, or 0.4 percent of the population at the time, the trend continued to increase so that in 2017, internet users had reached 4.1 billion or 54.4 percent of the world’s population.

This communication technology is a communication channel replacing or at least reducing the previous communication channel, namely the mass media. This can be seen, for example the printed edition of Bernas Jogjakarta Daily which had experienced its heyday was closed on February 28, 2018. Bernas management chose to migrate from the print edition to online media under the name Bernas.id

Widespread use of the internet is one of the important factors in business disruption. Shifting the way media is not only stopped at how to obtain information, but changes the way of doing business. Rhenald Kasali mentioned five important things in disruption.

First, disruption results in savings in many costs due to simplification and savings in business processes. With the existence of smart phones, the cost of communication between teams and also with suppliers and customers decreases. More communication that is intensive also reduces the costs of errors and stock. For the motorcycle taxi business, smart phones reduce the energy and time to wait for passengers, and offer flexibility to work. As a result, enthusiasts to become motorcycle taxi drivers increase and are able to offer motorcycle taxi fees that are much cheaper to consumers.

Second, disruption makes any quality that is produced better than the previous one. Communication technology allows businesses to adjust customer preferences, so that it can help businesses compile quality and satisfying products and services.

Third, disruption reaches new markets, or makes them – market segments – that were previously unreachable to be affordable. Online retail business through online marketplaces / markets, such as tokopedia, bukalapak, shopee, is able to offer products to all cities in Indonesia, which were previously not affordable. The marketplace can do that because of the support of package couriers such as JNE and JNT who can send packages to various cities at affordable costs.

Fourth, the products / services produced by the disruption are more easily accessed or reached by its users. As well as ojek services (eg Gojek and Grab) or online taxis (for example Gocar), or banking services and including financial technology, everything is now available in the hand, on our smartphones.

Fifth, disruption makes everything now smart. Smarter, saving time, stock costs and more accurate. With internet technology, entrepreneurs are competing to understand the interests of market segments, then preparing products that suit their needs.

Growing Your Business

Business is a system that have purpose to grow. So all components, from products, activities, financials calculation, and team management and so on and so on support that purpose. Grow is mean sustainable increase profit. Sales of products create this profit.

How to make the growing is possible?

That is possible if,

  1. your products match with need of customer segment
  2. The customer know about your products
  3. customer segment belief about your credibility
  4. they are easy to access
  5. the price is affordable
  6. Your cost is lower than previous.

However, need of the customer segment is ongoing changing process. So growing the business need on going adjustment. These the list of idea to growing

  • Improve your value proposition or positioning. Evaluate your value proposition. Is it something that customer segment need? Is it different from competitor? Does your customer prefer your offer?
  • The value proposition define product that you offer. Is product say about the value proposition? You can add more value to current products and services.
  • Value proposition also define price. Low price have meaning affordable, efficient, good value. However, it also has meaning bad quality. Change price to make good position in the market. That is also considering another customer cost. Check customer cost and find what you can do to fix it. It include payment term.
  • Improve the copywriting. Add a more relevant benefit in your offer. The benefit is more than feature. It is result and further implication. It is also outcome.
  • Because, products have life circle, you can create new products or services.
  • Up sale is for existing customer. It means Increasing spends products that customer buy. The products usually related to other products. If they buy shoes, they also need socks. It find whether existing clients will buy another related products.
  • Find for new customer outside city or country.