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Market Segmentation

Market Segmentation. Lifelong Learning 2007 Presented by Greg Marsello. We Must Segment the Market …80/20 Principle. Why Segment the Market?. You serve some, but not all, demographic groups. There is no average participant. Roughly 20% of your customers give you 80% of your operating margin.

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Market Segmentation

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  1. Market Segmentation Lifelong Learning 2007Presented by Greg Marsello

  2. We Must Segment the Market…80/20 Principle

  3. Why Segment the Market? • You serve some, but not all, demographic groups. There is no average participant. • Roughly 20% of your customers give you 80% of your operating margin. • To know who the 20% is. • To focus resources on that 20% — programs, staff, marketing. • To make sure you serve your best customers very well.

  4. Problems Caused by NOT Identifying Primary Market Segments • Ineffective program selection • Wasted promotion dollars • Decrease in repeat rate • Reduced operating margin • Wasted staff time

  5. Market Segmentation • A process by which you distinguish or differentiate your various audiences, build a separate demographic profile, and then deliver different products, possibly with different promotions. The ideal number of market segments is 7

  6. Chart 1: Organization Participants

  7. Chart 2: Net Income

  8. Chart 3: Organization Resources

  9. Chart 4: Efficiency Strategy

  10. Finding Your SevenPrimary Market Segments • Step 1: Get registration software • Step 2: Run out your best 200 participants • Step 3: Survey your best participants • Step 4: Analyze your demographics • Step 5: Get data for all participants • Step 6: Now you know

  11. Ideal Software System Registration Mailing List Word Processing Master Data File Customer Demographics History Room Locations Brochures Marketing Analysis Financial Statements Financial Analysis

  12. Finding Your SevenPrimary Market Segments • Step 1: Get registration software • Step 2: Run out your best 200 participants • Step 3: Survey your best participants • Step 4: Analyze your demographics • Step 5: Get data for all participants • Step 6: Now you know

  13. Know Your Participants & Allocate Resources Accordingly Recency Monetary Value/Activity

  14. Finding Your SevenPrimary Market Segments • Step 1: Get registration software • Step 2: Run out your best 200 participants • Step 3: Survey your best participants • Step 4: Analyze your demographics • Step 5: Get data for all participants • Step 6: Now you know

  15. Critical Customer Demographics Geography* Age* Sex Formal Education Community Courses/Events

  16. Critical Customer Demographics Geography Occupation* Job Title Age* Continuing Professional Education

  17. Critical Customer Demographics Geography Age Sex Formal Education Race/Ethnicity Credit Courses

  18. Finding Your SevenPrimary Market Segments • Step 1: Get registration software • Step 2: Run out your best 200 participants • Step 3: Survey your best participants • Step 4: Analyze your demographics • Step 5: Get data for all participants • Step 6: Now you know

  19. Demographic Analysis Examples Age Example 1 Example 2 18-20 20 10 21-25 20 70 26-30 20 30 31-35 20 20 36-40 20 40 41-45 20 10 46-50 20 10 51-55 20 5 56-60 20 5 61-65 20 0

  20. Example of Analyzing Demographic Variables CPE, Seminars, Conferences & Other Work-Related Events Example 1 Example 2 Aerospace (3812-01) 2 16 Ambulance Services (4119-02) 4 9 Architects and Related (8712) 23 12 Attorneys (8111-03) 17 9 Bookkeeping Services (8721-02) 15 6 Bldg. Mat’l Suppliers (5211-26) 2 8 Carpet/Rug Cleaners (7217-04) 5 5 Consulting Companies (8742-01) 16 11

  21. Example 1 Example 2 Computer Consult. (7379-05) 8 20 Convenience Stores (5411-03) 2 9 County Gov’ts (many) 1 14 Engineers (8711) 14 10 Hospitals (8062-02) 7 11 Insurance Adjusters (6411-02) 2 12 Landscape Contractors (0782-04) 1 9 Nail Salons (7931-02) 16 8 Printers (2752-02) 4 6 State Government (many) 12 16 Tractor Dealers (5083-04) 0 9 TOTAL 200 200

  22. LERN’s Market Segments Associations Churches Community Colleges Free Universities Co-Op Extension Museums & Gardens Hospitals & Healthcare Individuals Private Businesses Libraries Military Technical Institutions Parks & Recreation Public Schools Universities Private Colleges Community Centers YMCA, YWCA, YHA Colleges & Schoolswithin Universities

  23. LERN’s Market Segments • Universities • Community Colleges • Associations • Associations were 1% of LERN customers; decision made to grow segment; 20,000 U.S. associations • Parks & Recreation

  24. Public Schools • Colleges & Schools within Universities • Broken out from university growth focus • Technical Institutions • Broken out from community colleges to give priority

  25. Finding Your SevenPrimary Market Segments • Step 1: Get registration software • Step 2: Run out your best 200 participants • Step 3: Survey your best participants • Step 4: Analyze your demographics • Step 5: Get data for all participants • Step 6: Now you know

  26. Ways to Collect Demographic Data • Registration Form • Phone Registration • Mail Survey • Confirmation Card/Letter • First Meeting • Contact

  27. Finding Your SevenPrimary Market Segments • Step 1: Get registration software • Step 2: Run out your best 200 participants • Step 3: Survey your best participants • Step 4: Analyze your demographics • Step 5: Get data for all participants • Step 6: Now you know

  28. 7 Primary Market Segments

  29. Using Segmentation Data • Identify which courses/events your top segments take and do more of them. • Promote more to your top seven segments. • Offer special deals to your top seven segments.

  30. Survey them and survey them again. • Find others that look like your best customers. • Tailor promotions. • Build new desirable segments.

  31. Let LERN Determine Your 7 Primary Market Segments • LERN’s Segmenting Tool determines primary market segments, carrier routes, repeat rate, LifeTime Value, and star customers, as well as allowing you to generate mailing lists. • For more information contact Greg Marsello at marsello@lern.org.

  32. Thank You!marsello@lern.org

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