The changed Indian reality has altered the segmentation question: it is no longer about whether segmentation is necessary; rather it’s about deciding when it makes most sense. Many case studies support this conclusion. In skin care, for example both Fair & Handsome and Fair & Lovely pursue the male grooming market, which barely existed only a decade ago. But how does a brand recognize when segmentation is indicated? Here are four guidelines:
- 1.Culture shifts signal segmentation opportunities long before the numbers do. Trend-based decisions help brands to start early and hit the market just when a segment gathers a profitable critical mass.
- 2.A flat innovation curve indicates the need for segmentation. Low innovation categories are ripe for share gain or market expansion through segmentation.
- 3.Changes in consumer lifestyle open new possibilities. Evolving consumer lifestyles are opportune for vertical segmentation (premium realization) and horizontal segmentation (filling niches as they develop).
- 4.Growth of substitute categories can drive the need for segmentation. The appearance of substitute categories signals a significant development in consumer behavior that may indicate the need to segment and create a sharper product offering.
Head – Strategic Planning