Services Marketing Segmentation Example

Segmentation Summary
Segment > Target > Position > Profit!!!

To get a product or service to the right person or

company, a marketer would firstly segment the
market, then target a single segment or series of
segments, and finally position within the segment(s).
Services Marketing Segmentation

Segmentation is the identification of subsets of

buyers within a market who share similar needs and
who demonstrate similar buyer behavior.
Segmentation aims to match groups of purchasers
with the same set of needs and buyer behavior. Such
a group is known as a 'segment'. Think of your
market as an orange, with a series of connected but
distinctive segments, each with their own profile.
Segmentation aims to match groups of purchasers
with the same set of needs and buyer behavior. Such
a group is known as a 'segment'.
Defining Segments

Segmentation is sometimes difficult to do!

Defined Segments should meet the following criteria:
 Can we make a profit from it?
 Is the segment accessible? How easy is it for us to get into the
segment?
 Is the segment measurable? Can we obtain realistic data to
consider its potential?
The are many ways that a segment can be defined.
 by geography - such as where in the world was the product bought
 by psychographics - such as lifestyle or beliefs
 by socio-cultural factors - such as class
 by demography - such as age, sex, and so on.
Segmentation…

Forces us to better know the VOC and CCRs

Allows us to match the right Services Solution with
segment need.
GAP 1: Deliverable CSA Stimuli
Segment 1 Segment 2 Segment 3 Segment 4
Timeliness
Business advice
● ● ● ●
Training for operators, mechanics, ● ● ● ●
technicians ● ● ● ●
Coverage for theft ● ● ● ●
Help in managing costs and improving ● ● ● ●
efficiency ○ ● ○ ●
Handbooks, information (available online?)
Equipment demos and events
○ ● ○ ●
Seminars (e.g., managing maintenance ○ ● ○ ●
costs) ● ● ● ●
Better understanding of cost details ● ●
Parts availability (guaranteed delivery in X ● ●
● ● ● ●
hours)
Financing ● ● ● ●
Guaranteed maintenance costs ● ● ● ●
Risk protection ○ ● ○ ●
Guaranteed buy back ○ ● ○ ●
Consulting ○ ●
Loaner machine during downtime ○ ●
Inspections
….
Segmentation Process

Gather existing primary data

 DBS
 Demographics
 Sales
 Equipment Information
 PTOS
 Opportunity
 Dealer Databases
 Surveys
Seek out secondary data sources as appropriate
 Customer Lists, etc.
Segmentation Process

Analyze the Data

 Excel…
 Access…
 Cognos...
Look for patterns in your data
Seek out and define segments
Segmentation Summary

Data sources:
 PTOS
 DBS
 Customer Value Surveys (2001 – 2005)
Segmentation Summary

Data sources:
 PTOS
 DBS
 Customer Value Surveys (2001 – 2005)
Segmentation Summary

Value Segments Based on Size

and Parts POPS-C
 Segmentation Summary

IRON Larger customers with

PLATINUM--Big and loyal whom we lose a large portion of
customers, capture most of business. Need to know what
business would drive them to spend
more with Cat.

GOLD Smaller customers,

but we capture most of LEAD Small customers with
business. More sales means no brand loyalty to Cat. Low
growing them as companies. DCAL and low number of
machines.
Segmentation Summary

We’re Losing a lot of

potential sales to this
group.
Segmentation Summary

Not as “loyal” as other

segments.

What do we focus on to address this?

Segmentation Summary

Lowest Scoring Results for IRON Segment

VOC from the

Survey!
Segmentation Summary

GOLD Segment
“Expectations are high – are we following through?”
Highest Scores by Value Segment

CSAs Score High in Each Segment!!!

Platinum – Avg 5.9

Gold – Avg 5.1

Iron – Avg 6.3

Lead – Avg 5.9

Lowest Scores by Value Segment

Platinum – Avg 5.9

Gold – Avg 5.1

Iron – Avg 6.3

Lead – Avg 5.9

Value Segment Summaries

Platinum Gold Iron Lead

Customers Number 31 331 145 2,324
Percent 1% 12% 5% 82%
Cat Eqpt Number 703 712 3,776 4,766
Avg. 23 2 26 2
Percent 7% 7% 38% 48%
Parts Sales/Cat Eqpt $3,485 $3,384 $777 $579
POPS-C 182% 311% 16% 5%
Avg. Survey Score 5.88 5.08 6.15 5.61
Top Models CV713 420D D6D D6D
Machine 844S D6D 120G 320L
D6C D4H D6R D6C
Engine 3306B 3412 3306B 3306B
3208 3208 3126 3208
3304B 3306B 3412 3306
Average Age 31 20 27 23
GAP 1: Deliverable CSA Stimuli
PLATINUM GOLD IRON LEAD
Timeliness
Business advice
● ● ● ●
Training for operators, mechanics, ● ● ● ●
technicians ● ● ● ●
Coverage for theft ● ● ● ●
Help in managing costs and improving ● ● ● ●
efficiency ○ ● ○ ●
Handbooks, information (available online?)
Equipment demos and events
○ ● ○ ●
Seminars (e.g., managing maintenance ○ ● ○ ●
costs) ● ● ● ●
Better understanding of cost details ● ●
Parts availability (guaranteed delivery in X ● ●
● ● ● ●
hours)
Financing ● ● ● ●
Guaranteed maintenance costs ● ● ● ●
To Be Risk protection
Determined… ○ ● ○ ●
Guaranteed buy back ○ ● ○ ●
Consulting ○ ●
Loaner machine during downtime ○ ●
Inspections
….
GAP1: Focus Group Validation

Timeliness
Business advice
● ● ● ●
Training for operators, mechanics, ● ● ● ●
technicians ● ● ● ●
Coverage for theft ● ● ● ●
Help in managing costs and improving ● ● ● ●
efficiency ○ ● ○ ●
Handbooks, information (available onli ne?)
Equipment demos and events
○ ● ○ ●
Seminars (e.g., managing maintenance ○ ● ○ ●
costs) ● ● ● ●
Better understanding of cost details ● ●
Parts availability (guaranteed delivery in X ● ●
● ● ● ●
hours)
Financing ● ● ● ●
Guaranteed maintenance costs ● ● ● ●
Risk protection ○ ● ○ ●
Guaranteed buy back ○ ● ○ ●
Consulting ○ ●
Loaner machine during downtime ○ ●
Inspections
….
Next Steps…

Complete a similar analysis

with your data!