PMRG Segmentation POV 1007

P i F kPresentation Framework

What we won’t do:What we won t do:Teach “Research 101”Teach or discuss analytic techniques

What we will do:Identify “pitfalls” that most often derail segmentation studiesProvide tips on how to maximize the utility of a segmentation studyProvide tips on how to maximize the utility of a segmentation study

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Marketers’ #1 Marketing Priority Supports SegmentationMarketers #1 Marketing Priority Supports Segmentation As A Strategy

Understanding Our Customers a Key InitiativeUnderstanding Our Customers a Key Initiative

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Wh S ?Why Segment?

Customers rarely have identical “needs” and companiesCustomers rarely have identical needs and companies cannot be all things to all people

Segmentation groups consumers based on purchase/use/Rxing g g p p grelevant behaviors, attitudes, characteristics and needs

Marketing Approaches

UndifferentiatedMass Marketing

AtomizedOne-to-One Marketing

SegmentedTargeted Marketingg One to One MarketingTargeted Marketing

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E S i i Si ilEvery Segmentation is Similar

Common GoalsCommon Goals

Obtain greater customer understandingIdentify competitive advantage/marketable PoDIdentify competitive advantage/marketable PoDAchieve greater customer relevance Maximize marketing efficiencies given ever-shrinking resourcesAlign brand goals w/ marketing strategy/tactics$$ Grow share/revenue $$

5PoD: Point of Differentiation

E S i i DiffEvery Segmentation is Different

Unique GoalsUnique Goals

Every brand has its unique set of challengesSegmentation must be designed to address the unique challengesSegmentation must be designed to address the unique challenges of the brand Examples:

G i E tGeneric EntryManaged Care PressuresNew Product Launching O d d M k tOvercrowded Market

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T di i l A hTraditional Approach

Heavy reliance on statistics to “discover” segmentsHeavy reliance on statistics to discover segmentsSegmentation precedes (and is used for) strategy developmentMethods for how to implement segment tactics considered AFTER completion of the segmentationR lti iResulting in:

Segmentation that may or may not be linked to core competenciesSegment drivers are unrelated to marketing issues / capabilitiesg g pSegment opportunity based on “presumed” rather than assessed potentialLimited actionability and failed expectations

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Limited actionability and failed expectations

P d N A hProposed New Approach

Segmentation ought to be constructed to meet specificSegmentation ought to be constructed to meet specific brand objectives and challenges“Tie-backs” to planned/potential marketing tactics should be built into the study design to ensure “actionability”Test potential “solutions” to estimate opportunityS l t l ti t h i i i t diSelect analytic techniques as is appropriate, proceeding from simple to complex techniquesTell a compelling story about how the brand can reach itsTell a compelling story about how the brand can reach its objective and overcome challenges

Linked to core competencies

P id “t l ” f k ti li ti

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Provide “tools” for marketing application

Section 2

Case Studies

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S i E lSegmentation ExampleObjective: Segmentation that provides direction for developing promotional effort; learn what role BRAND plays in management

“Habits and Practices” – A/O Type SurveyHabits and Practices A/O Type Surveyattitudes abt DISORDER & Tx (> 100 items)character of disorderproduct use patterns

D l Attit di lcustomer characteristics/demosbenefits desiredevaluation of market offeringuse of informational channels

Develop Attitudinal Factors

Apply Clustering / use of informational channels pp y C uste g /Grouping Technique

Deprived butReluctantlySelf-BlamingR R j t R R tiN t li t

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Deprived but “Dealing”

Reluctantly Reliant

Self Blamingand AshamedRx Rejecter Rx ReceptiveNaturalist

S i E lSegmentation ExampleFactor Scores by Segmenty g

1

1.5

0

0.5

-1

-0.5

Factors:-1.5

Product Reliant

Rx Cautious

Multiple Impacts

Stress Pro-OTC Pro-Rx Advocates of “Natural”

Personal Impact

Guilt and Shame

Rx Receptive Reluctantly Reliant Self Blaming and Ashamed

11NOTE: Shows acceptable within-group homogeneity and across-group heterogeneity

Rx Receptive Reluctantly Reliant Self-Blaming and AshamedNaturalists Rx Rejecters Deprived but “Dealing”

S i E lSegmentation ExampleSegments by Size, CONDITION Severity and Rx Use

Mor

e

Rx Receptive

Seg e s by S e, CO O Se e y a d Use

Mse

Self-Blaming & Ashamed

p

Highlights the relationship between CONDITION severity and Rx Use

% R

x U

s Ashamed

Reluctantly Reliant

Naturalist

“Need” drives Rx Use

Less

Deprived by “Dealing”

Rx Rejecter

% SevereLess More

j

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S i E lSegmentation ExampleSegments by Key OpinionsSeg e s by ey Op o s

NEED + Risk : BenefitRx ReceptiveM

ore

analysis discriminates receptivity to Rx option

Rx

Ass

ista

nce

Rx Rejecter

Reluctantly Reliant

ived

Nee

d fo

r R Self-Blaming and Ashamed

Naturalist

Per

cei

Deprived but “Dealing”

Less

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Rx Benefits Outweigh RiskLess More

S i E lSegmentation ExampleProduct Use Index by Segments oduc Use de by Seg e s

1.411.5 1.411.5

0.58

0.5

1

-Mea

n

Number of OTC medsNumber of Rx meds0.50 0.58

0.5

1

-Mea

n

Number of OTC medsNumber of Rx meds

0.15 0.07

0 37

-0.16-0 33

-0.10-0.15

0 5

0

mbe

r of M

eds

-

0.15 0.07

0 37

-0.16-0 33

-0.10-0.15

0 5

0

mbe

r of M

eds

-

-0.47-0.370.33

-0.57

-1

-0.5

Rx Receptive Reluctantly Reliant


Naturalist Rx Rejecter Deprived but“Dealing”

Num -0.47

-0.370.33

-0.57

-1

-0.5

Rx Receptive Reluctantly Reliant


Naturalist Rx Rejecter Deprived but“Dealing”

Num

14NOTE: Current usage patterns used as proxy for potential

Reliant & Ashamed Dealing

Selected Targets

Reliant & Ashamed Dealing

P i S i E lPatient Segmentation ExampleRx Receptive: Summary RecommendationsRx Receptive: Summary Recommendations

Main Challenge: Although BRAND enjoys high share in this group, expanding share will require promoting benefits relative to otherexpanding share will require promoting benefits relative to other MOAs; high concomitant OTC useRecommended Response Strategy: Differentiate BRAND from MOAs on efficacy safety and side effectsMOAs on efficacy, safety and side effectsMessages for market penetration/expansion:

Effectively managing CONDITION is important; BRAND is highly effective safe with fewest side effectseffective, safe, with fewest side effects

Media PreferencesPrint ads may be most effective for communicating the substantive information they require to decide

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information they require to decide

A i “A i bili ”Assessing “Action-ability”

Traditional CriteriaTraditional CriteriaDifferentiated Real / ReliableRelevantIdentifies target segmentsMake “marketing sense”gReachable

Is this enough?Is this enough?

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G i i G “A i bili ”Gaining Greater “Action-ability”

Today’s Additional RequirementsToday s Additional RequirementsProvide information that supports strategy for achieving brand goalsProvide estimates of segment opportunity and potential ROI to b tt f k ti ff tbetter focus marketing effortsProvide a mechanism for guiding the development of tactics and media plansProvide targeting tools

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U S i P

443322

Use a Segmentation Process

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Animate and Animate and ImplementImplement

44

Test /AnalyzeTest /Analyze

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Establish the Establish the FrameworkFramework

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PreparePrepare

11

• Conduct Discovery

• Convene the Team

• Build the Sampling Frame

• Develop Analytic Approach

• Create Profiles

• Build Segment

• Kick-Off the Project

• Create the Segmentation Blueprint

• Design the Qnrg

Identifying Tools

• Link Segment Results to Media Db

p

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R S i E lRe-Segmentation Example

Re segment consumers on dimensions that differentiateRe-segment consumers on dimensions that differentiate willingness to use BRAND

Size and characterize segmentsIdentify / Prioritize segments such that:

BRAND penetration / uptake is optimizedMarketing productivity and ROI is maximal

Obtain information that will guide messaging and promotional development for generating trial and usage of BRAND

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NOTE: Objectives are re-defined in terms of furthering the brand’s ultimate goals

R S i E l

Define the Potential Patient Population

Re-Segmentation Example

Define the Potential Patient PopulationUS Female Population

109.2 MMNo CONDITION

Past Year Sufferer59.1 MM

No CONDITION

15%Non-Qualified

Sufferers

Potential Patient Population

32.8 MM

45%55%

30%QualifiedSufferers 32.8 MM

Yes CONDITIONPast Year

Must determine inclusion criteria and comprised the potential

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customer pool

R S i E l

Identify strategies for achieving brand growth


Identify strategies for achieving brand growthMust be a viable strategy for brand

32.8 MM Qualified Sufferers

30%Current

BRAND User

Maintain/Cultivate

Non-Rx Users

26.2 MMRx Users

6.6 MM 70%Competitor

User

80% 20%

Informs Sampling PlanSwitch

EXPANDSHARE

EXPAND Rx MARKET

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Informs Sampling Plan


Survey ContentSurvey ContentExperience of condition and Hx of managementNeeds identification Drivers of a medication choicePerceived benefit of resolving CONDITIONEvaluation of BRAND/CompetitorspBarriers to Rx User/BRAND useSolutions to barriers and the degree to which potential solutions address barrieraddress barrierLinking questions to CRM and media database

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Needs Rx Motivations Brand Appeal Barriers Potential forNeeds, Rx-Motivations, Brand Appeal, Barriers, Potential for Overcoming Barriers Differed by Rx Status/Hx

Rx status linked to strategy

Maintain & Cultivate Greater

SwitchCompetitor Attract Non-

Potential Strategies

Cultivate Greater Usage

Competitor Users Rx Users

Segmentation Conducted for Each Strategy

Segments Segments Segments

g gy

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R S i E l

Targets were chosen within strategy group


Targets were chosen within strategy groupBrand Team owns the final prioritization

A. Expand Share B. Expand MarketM i t i /C lti t S it h Att t

BRAND Loyal High BRAND Potential

Competitor Loyal

Maintain/Cultivate Switch Attract

BRAND Vulnerable

Indeterminate BRAND Potential

Low BRAND

Potential Switchers BRAND Appeal High

Potential Switchers Low BRAND Potential

Potential Switchers BRAND Appeal Low

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Profiles included not only segment size but estimates ofProfiles included not only segment size but estimates of BRAND’s “real” potential

Satisfaction with BRAND EvaluationCurrent Approach

Degree to which Barriers can be Overcome

Perceived Need

Apply Established Algorithms for Estimated PotentialApply Established Algorithms for Estimated Potential

Estimate Segment Potential

% and # of patients expressing high likelihood to stay on/take BRAND

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likelihood to stay on/take BRAND


Segment scoring tools created for identifying segmentSegment scoring tools created for identifying segment members in:

CRM patient registry Media databases (e.g., MARS, Simmons)

Provides in-depth media usage information used to develop media plans

Screening subsequent research participant for segment specific follow-up research

information used to develop media plans

follow up research

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Segmentation OutcomesSegmentation OutcomesSegmentation of patients along dimensions that impact the brand’s potential for growthE ti t f t’ “ l” t ti l d di ti b t hi hEstimates of segment’s “real” potential and direction about which segments might be most responsive to promotional effortLinkages to MARS database, enabling the Development of Tactics

d M di Pland Media PlansMultiple targeting tools for identified “uses” of the segmentation

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Section 3

Segmentation Guidelines

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S i Phil hSegmentation Philosophy

Segments are not “out there” waiting to be found; there isSegments are not out there waiting to be found; there is not “one right way” to segment a marketStatistical prowess and analytic tools alone are not enough There are no “cookie cutter” or “black box” systems that will do an adequate jobS t ti t b t fit t b d’ lSegmentation must be custom fit to your brand’s goals, markets and competitive situationSegmentation research must be goal directedSegmentation research must be goal directed

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S i P

443322

Segmentation Process

11

Animate and Animate and ImplementImplement

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Test /AnalyzeTest /Analyze

33

Establish the Establish the FrameworkFramework

22

PreparePrepare

11

• Conduct Discovery

• Convene the Team

• Build the Sampling Frame

• Develop Analytic Approach

• Create Profiles

• Build Segment

• Kick-Off the Project

• Create the Segmentation Blueprint

• Design the Qnrg

Identifying Tools

• Link Segment Results to Media Db

p

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Pl f “ i bili ”1 Prepare2 Establish FrameworkPlan for “action-ability”

Identify end users of the segmentation and learn how they

2 Establish Framework3 Test / Analyze4. Animate / Implement

Identify end users of the segmentation and learn how they will be tasked to use the resultsKnow what marketing tactics are available for advancing brand strategy

To the extent possible, build in methods for tactical utility

“Begin with the end in mind”

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C d Di1 Prepare2 Establish FrameworkConduct Discovery

Re/Evaluate results from existing research to inform the


Re/Evaluate results from existing research to inform the brand’s challenge

Primary and Secondary Sources

Identify significant “gaps” in knowledge and conduct research to “fill in” gaps

Typically qualitative but can be short “quant” surveys (e g screenerTypically qualitative, but can be short quant surveys (e.g., screener or omnibus studies)

Confirm the boundaries of the target marketMarket sizing researchTarget list development

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C h “T ”1 Prepare2 Establish FrameworkConvene the “Team” 2 Establish Framework3 Test / Analyze4. Animate / Implement

Leveragable segmentation requires a strong partnership between all charged with

Team Members

Brand VP / DirectorP d t M between all charged with

advancing the brand7 – 9 Core Team members ideal; group size beyond 12 –15 tend to lose effectiveness

Product ManagersMedicalRegulatoryM k t R h 15 tend to lose effectivenessMarket ResearchCompetitive IntelligenceManaged Care DirectorAd AAd AgencySales Leadership

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S d “Ki k ff”1 Prepare2 Establish FrameworkStudy “Kick-off”

Create the segmentation blueprint informed by strategy


Create the segmentation blueprint, informed by strategy

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S li F1 Prepare2 Establish FrameworkSampling Frame

All sampling frame records are pre-


Patient Segmentations All sampling frame records are preappended with data enhancement

At minimum, geo-demographic and CONDITION data

Patient Segmentations

Syndicated segmentationsPRIZMP$YCLE

Other “list” characteristicsOther list characteristicsPre-appending data enhancements ensures 100% coverage of data to be used for creating a DB scoring g gmodelDatabase variables also offer potential segmentation variables

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D i h S1 Prepare2 Establish FrameworkDesign the Survey

Design to “test” and address “hypotheses”


Design to test and address hypothesesPotential segmentation dimensions

Test tactical “solutions” to brand growth barriers and quantify incremental business that can be realized from addressing the barrier Include Qs that provide linkage to tactical DBsInclude Qs that provide linkage to tactical DBs

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S i A l i1 Prepare2 Establish FrameworkSegmentation Analysis 2 Establish Framework3 Test / Analyze4. Animate / Implement

Traditional Approach: Exploratory and statistically-drivenTraditional Approach: Exploratory and statistically driven

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S i A l i1 Prepare2 Establish FrameworkSegmentation Analysis

New Approach: Objectives-driven


e pp oac Objec es d e

t

Guided AnalysisAnalyses conducted to test/investigate hypotheses about

Blu

eprin

t

1y g yp

what advances brand’s objectiveInputs should include data from primary research and available databases

enta

tion

2 Segments are formed based on direction contained in the segmentation blueprint

“Grouping” technique selected as is appropriate for the data

Seg

m

3 Result reviewed for refinement/revision to achieve maximal utility for furthering brand objectives

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T ll E h S ’ S Strategy: AcquireTell Each Segment’s Story Strategy: Acquire

Priority: High

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I l iImplementation

Profiles provide foundation for positioning workProfiles provide foundation for positioning work Typing tools / Database scoring

Sales TargetingMedia Planning

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I l iImplementation

“Best” segmentation will fail unless the company is committedBest segmentation will fail unless the company is committed to and capable of executing segmentation strategyThe implementing company must:

Have the discipline to concentrate resources on high potential target segments and ignore others Understand how to tailor persuasive messages for each target p g gsegmentExercise skill in using information to make media buys or effective direct marketing programsg p gPossess the capability to customize marketing mix for target segments for optimal penetration

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SSummary

Market segmentation must be designed to meet specificMarket segmentation must be designed to meet specific brand objectives and overcome specific challengesMarket segmentation research must be carefully planned to ensure maximal actionability once completedSegmentation as a marketing approach must be supported at all levels of an organizationat all levels of an organization

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i f i lFor more information, please contact . . .

Anthony BogleDirector, Market Research,

Susan Lee Simpson Thomas M Mills

Director, Market Research, Sanofi-Aventis

Susan Lee SimpsonVP, Client Services, Burke

513-564-8382susan simpson@burke com

Thomas M. MillsStatistical Consultant, Burke

513-564-8381thomas mills@burke [email protected] [email protected]

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PMRG Segmentation POV 1007

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