Job-Based Segmentation and Targeting

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. 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 Don’t Tell • Prototyping

3. Focus on the Human Values • Are you proposing or creating value? • Who defines value?

4. 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. 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

7. 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?

9. Jobs to be done • Customers hire products to get jobs done in a specific situation. • Milkshake Marketing +

10. 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. Job Trees, Generic Job Markets, and Job Markets

12. Job Trees and Job Markets We segment within Job Markets Generic Job Market

13. Job Tree for Laundry Detergent Make clothes smell nice Preserve expensive clothes Avoid irritation Don’t want to carry a lot Oil based stains Get clothes really clean Clean really dirty clothes Clean clothes at Laundromat Kid related stains Clean clothes at home Clean Clothes

14. 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. Cleans a Variety of Stains Total Care HeavyDuty Gentle onClothing Bleach Free and Gentle Marketdemand thathas not beenmet by an Existing product Very Specialized

16. Market Grid for Online Plane Tickets I want to save money when I travel 6 5 3 4 I want to visit my parents over the summer I have to meet a client in Seattle on Monday at 10 AM 2 1 I want to save time when I travel

17. Market Grid for MBA Education I want to gain basic knowledge about business Career Changer Career Starter I want to gain business experience I want to improve my business skills Career Leapfrogger (UG BBA) Career Enhancer I want to gain advanced knowledge about business

18. Market Grid for Online Plane Tickets I want to save money when I travel 6 5 3 4 I want to visit my parents over the summer I have to meet a client in Seattle on Monday at 10 AM 2 1 I want to save time when I travel

19. Market Grid for MBA Education I want to gain basic knowledge about business Career Changer Career Starter Professional MBA Career Start MBA I want to gain business experience I want to improve my business skills EMBA Career Leapfrogger (UG BBA) Career Enhancer I want to gain advanced knowledge about business

20. 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. Cat Food Job Tree

22. Summary • Value is defined by the consumer • Jobs-to-be done vs. traditional segmentation variables • Job Trees and Job Markets

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