Segmentation Methods In Millennium Era

Segmentation methods are based on geographical location, demographic or demographic identity, psychographic / description of interests, and behavior-based segmentation.

Geographical segmentation can be done by opening a map. Maps can trigger insight that climatic conditions can trigger uniform needs in geographical locations. For example, hot areas need fans and air conditioning. Maps also help understand competitors’ control ranges. Where is the area of ​​competition on one item that is tight, which area has not been touched by competitors.

Facebook ads or Facebook Ads, provide tools to share viewers based on that geographical location.

Demographic or demographic identity

Demographics talk about the total population, the population per age group, the population in each sex. Demographics also include family size, income, and income, level of education, religion, race, generation, nationality, and social class. For marketers the data needed is data on the number and distribution of population per sex and age. In addition, data on industrial development is needed to estimate purchasing power.

The data inspires marketers about interest. How to?

Age

Age changes usually have a strong relationship with changes in tastes and changes in the type of goods needed. Suppose small children need a small T-shirt, sweet toothpaste with cute packing, toys, candy and so on. While in their teens they no longer need such items. Teenagers need acne medication, bigger shirts, toothpaste for adults, mountain bikes, textbooks and so on.

Life Stages

Human life can be distinguished according to the stages of life. Each stage has different tasks and needs. School age has learning tasks. Pre-marital working age has the task of finding a mate and preparing a marriage. The new bride has the task of preparing the house. Even though sometimes people have a house before the new bride. New couples have children who have the task of caring for children. It is a stage of life that has its own tasks. Each task has consumption needs. If the new bride is in charge of preparing the house, it means that marketers have the opportunity to offer housing products according to their budget.

Gender

Men and women have different attitudes and interests. The type of clothes needed is different. The culture of a society usually divides the different roles between men and women. There are people who authorize women to buy self-care items, such as soap, shampoo, toothpaste. Sometimes changes can occur, for example, many men begin to play that role. So that the ad adapts itself to the tendency of the sex of the target market.

Income

Different income also usually has different tastes. There are items that can only be reached by the price of people with high income. Examples of luxury items such as luxury cars, luxury homes, luxury cellphones, luxury cameras and so on.

Generation

Each generation is generally influenced by the situation and spirit of the era and the common mode of communication. The division of generations in Indonesia, with millennial terms, for example, is an imitation of the division of generations in America. Indeed there are similarities between America and Indonesia, for example baby boomers. The baby boom after the second world war occurred in both the United States and Indonesia, including in other countries. Another equation is millennial generation. The millennial generation of these two countries is the same as using mobile phones along with the internet as a mode of communication.

Marketers in America usually divide generations in American society into several parts, namely, the Silent Generation (born between 1925-1945), baby boomers (born 1946-1964), generation X (born 1964-1978), and millennial (born 1977-1994 ) The silent generation does not mean a silent generation. They also talked a lot to their young people. It is naming the marketer’s point of view today. For today’s marketers, they are a generation that is old and senior, their task is to become grandfather for their grandchildren.

Competition Landscape

When choosing a market segment, not only is the potential considered. Also consider threats. Sometimes it must be avoided, by looking for other segments. Even so, the easiest segment has threats. Michael E Porter formulated threat factors as well as generic competitive strategies, or outlines. Threats are dynamic, so the strategy is effective so that it needs to develop. The following threats in a business field.

The threat of hard competition.

Hard competition is not always caused by market attractiveness, for example large demand and purchasing power. It could also be because companies that enter the market are unable to get out of the business. Large investments have been made. Do not have the skills to strive in other fields. Such conditions encourage price wars and advertising wars. Profits shrink and costs increase.

The threat of newcomers

The most interesting market segment is that if newcomers find it difficult to enter and the old players are easy to get out. The terms are high entry barrier and low exit barrier. So that new players will have difficulty entering a business field.

That situation can change. The existence of the internet can change this, for example the circulation of rotiboy recipes, allowing new players in the same bread field. Thus, Rotiboy can no longer enjoy monopoly as before.

If entry barrier and exit barrier are high, profits may be high, if between players form a price agreement. But in such situations, players can compete hard, because they have no other choice.

If the entry barrier is low and the exit barrier is high, competition will tend to be tight. More and more players, there are no exits. Production exceeding market capacity can occur and prices fall.

Threats from substitute or substitute products

In this era of digital technology, more and more new innovations, substitute products often appear. Telecommunication shops are replaced by symbian phones. Symbian mobile replaced Android or Apple smartphone. It can also happen that these substitute products are cheaper and easier, so that they reduce prices and profits.

Threats from the bargaining power of buyers

A market segment is less attractive if the buyer has large and increasing bargaining power. Suppose that the bargaining power of national minimarket at suppliers will tend to be large along with the amount of turnover. The national minimarket erodes competitors, so that suppliers increasingly lose alternative buyers, then with a large turnover can reduce prices. The bargaining power of buyers increases if the product does not have a differentiator or an easy buyer switches to another supplier with risk and low cost. The best defense is to arrange good and inimitable products, so buyers don’t move.

Threats from the size of the supplier’s bargaining power

Market segments are less attractive if suppliers can easily increase prices or reduce the amount of goods sold. The strength of suppliers is strong if goods are scarce and there are no substitute or substitute materials, and it is difficult to change suppliers. The best defense is to build mutually beneficial relationships or use a variety of sources.

These are the factors that influence the competitive climate. Each market segment has a different level of competition based on its industrial structure. With that insight, it is better to choose an industry with a low level of competition and not increasing. Even so, in general every business sector is always in competition.

Psychographics Segmentation in Millennium Era

Psychographics divide the market into groups or segments based on psychological characteristics. This psychological characteristic includes personality, lifestyle and values. People in one geographical and demographic segment, can have various types of psychographic segments. So psychographic segmentation details more geographical and demographic segmentation. Groups of men aged 24-30 in the same area can have a variety of personalities, lifestyles and values. Popular psychographic classification is the VALS Strategic Business Insight’s (SBI) framework. VALS divides Americans into 8 main groups based on questionnaires about 4 elements of demographics and 35 elements of attitude. You can get the questionnaire here www.strategicbusinessinsights.com/vals/presurvey.shtml .

 

  
 

In VALS, the division of segments is based on psychological characteristics, namely innovators, thinkers, believers, accomplishers, fighters, experiencers, Makers, people who survive. Based on information on Wikipedia https://en.wikipedia.org/wiki/VALS, an explanation of the characteristics is as follows.

Innovator

Innovators are people who lead change. They have big income, confidence and rich resources so they are free to set goals and reach them. Maintaining the image is something that is important to them, as a reflection of taste, independence, and character. They are looking for better things.

Thinker

They have high resources and are motivated by ideal things. They are mature, responsible, professional and educated. His leisure activities are centered at home, but they know what is happening in the world. They are open with new ideas and social change. They are high income and rational and practical decision makers.

Believer

Those consumers with low resources are also motivated with ideal things. They are consumers who are conservative and predictable. They like local products and established brands, do not dare to try new things.

Achiever

They have great resources that are motivated to achieve achievement. They are satisfied with work and family and excel. His political attitude is conservative and respects the authority and status quo. They like established products and services and show their success to their peers.

Fighters

They are low-power consumers who are motivated to achieve achievement. They have interests such as achievement, but they have weaknesses in economic, social and psychological resources. Style is very important to him because they imitate the people they admire.

Hunter experience

These consumers are high in resources. They are motivated by self-expression. Their age is the youngest, an average of 25 years. They have a lot of energy for physical and social activities. They love shopping for clothes, food, music and other young tastes.

Maker

These consumers are low-resource groups who are motivated by self-expression. They think practically and like to make things themselves. They focus on family, work and physical recreation and are less interested in the wider world. They like practical and functional products.

 Survivors

They are consumers with the lowest income. They have very few resources. They are the oldest segment, with a middle value of around 61. With limited facilities, they tend to be loyal to the brand.

To find out psychography based on the VALS framework, it is necessary to conduct a questionnaire research. It could also use existing research.

Besides VALS, Facebook and Google have tools that indicate someone’s interest. Google detects someone’s interest based on keywords typed by search engine users. The number of search engine users has increased from year to year. According to http://www.internetlivestats.com, in 2017, 46.8% of the global population has accessed the internet. In one day, August 22, 2018, there were 4 billion internet users in the world, and there were 2.6 billion Google users, and 2.3 billion Facebook users. With many Google and Facebook users, many user profiles are recorded in their database. Not only geographic and demographic, but also signals of interest, or psychographics. The signal of interest can be known from the keywords used in the google search engine. For Facebook, signals of interest can be known from which status makes users stop (a sign of concern and interest), and their involvement in status in the form of thumbs up, comments, and sharing. From there, Facebook identifies user interest profiles. Facebook and Google use computing algorithms to identify it. The algorithmic formula is not published, but marketers can use the identification results.

The method of introducing market interest through Google and Facebook is easier, cheaper and more update compared to VALS survey research above. The percentage comparison between the sample and the population is clearly bigger than Google and Facebook. Facebook has a list of the interests they identified from their algorithms. We can access it via the desktop or laptop computer screen (not via the smartphone screen) in the link below https://web.facebook.com/ads/audience-insights

Millennial Generation Characteristic

• Creative. Because it is easy to communicate and get information from many people with rich levels of variation, millennial tend to be creative. Creative means, able to produce new ideas in business and work. Millennial are pretty much building their own businesses, rather than working in large institutions. Millennial create startup business like grab, gojek (online motorbike taxi), online business, and work independently on websites that mediate service users and service providers. Examples of this brokering web are, for example, adsense.com, teespring.com, 99design.com, fivver.com, and so on.

• Connected. Millennial tend to be connected to the internet via smartphones. Through smartphones, they are not bound to access the internet. They can access the internet anywhere and anytime. Previous modes of communication, such as face-to-face and mass communication, were not lost, but their roles were not like before. Even more so when people are increasingly individualized, even when meeting face-to-face even millennial cannot be separated from paying attention to smartphones with internet connections.

• Confidence. Communicating via the internet has the characteristics: without face to face, two-way, do not have to respond directly. With these characteristics, users train their courage and compose their unique opinions in conversations on social media. Millennial often debate hard on social media. Not always debating with argumentation, but labeling both positive and negative without argumentation. Meme wars often occur between two camps on social media. They are also oriented towards being entrepreneurs.

With these three types of character, the millennial generation has a stronger aspiration to build their own business than the previous generation. That way business competition increases. When they market online, there are competing skills and strategies online, the more important online marketing knowledge is. First, to be able to compete with fellow marketers. Second, to be able to use the opportunities available on online media.