Applications of IT in Research
Segmentation
Segmentation is the process which divides your total market into homogenous subsets. The members of each subset will be similar to each other and different to those in the other groups.
For example, customers can be divided according to their communication preferences or their lifestyle choices, and employees according to what stage they have reached in their careers.
The business benefit is that actions to address perceived problems can be targeted directly to the groups where the actions will have the greatest impact.
For the segmentation process we use techniques such as Cluster Analysis, Chi2 Automatic Interaction Detection (CHAID), Classification & Regression Trees and Quick Unbiased Efficient Statistical Trees(QUEST).
Client example
A European printer manufacturer commissioned us to conduct a survey amongst small businesses and home offices to establish their printer needs.
The target market was segmented using five respondent characteristics:
- Country – UK, France, Germany
- Type of office
- Pattern of magazine readership
- Gender
- Age
The 600 respondents interviewed were questioned on the following areas:
- Source of purchase for paper and ink
- Price perceptions of separate vs. single cartridges
- Preferences for separate vs. single cartridges
- Price expectations for a laser printer with inkjet-laser sharpness for images and photos
- Reasons for choice of printer technology
Segmentation results were presented as tree diagrams like those shown below:
The key findings showed that for almost all the analyses, the country was the primary determining factor. For example in terms of price expectation France had a very distinct pattern of behaviour compared to the UK or Germany. Magazine readership also had a significant impact, and home offices proved to be more cost-conscious than small businesses.
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