How To Become A Management Guru

How Politicians & Authors Have Used The Rules Of Market Segmentation Most Effectively. Some Unusual Suspects Here.

WrittenBy:Shovon Chowdhury
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To read the introduction to The Four Minute ManagerTM, click here.

Fundamentals of Market Segmentation : II

Now that you know the basics of Market Segmentation, let us learn how to use tools. The first tool created by mankind looked like this.

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It was known as the stick. After a brief amount of practice, mankind found that it could use this to bash animals, and, when necessary, each other. Archival footage of this discovery can be viewed here.

In the cow belt, this is still the primary tool used by mankind, leading to the popular saying, “Who has the stick, he has the buffalo”. Policemen in India also continue to use this as their primary tool, partly because their revolvers don’t work and partly because it helps them to round up buffaloes.

The next quantum leap in tool-making happened a few thousand years later, when a management professor thought, why use one stick when we can use two? He created a tool which looks like this.

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He called the vertical stick the Y-axis, and the horizontal stick the X-axis. In this way, he created a richer and far more complex tool called the Market Segmentation Map. This is the beauty of management. We managers take simple tools and convert them into something people have to pay money for. Sometimes, merely mentioning the Market Segmention Map is enough – but it helps if you know how to use it. The Map enables us to do something called Market Modeling, which is a more robust and enduring source of income than ordinary modeling, where even a pimple can lead to losses.

What is the purpose of a Market Segmentation Map? The purpose is to understand markets better. Markets are very complex. Sometimes, like Rahul Gandhi, they are hard to understand. We can simplify this complexity by asking ourselves, what are the two key factors that drive this market? Once we decide what they are, we can use one as the X-axis and the other as the Y-axis.

Now all you have to do is place the major players in the map, and voila! You have a market segmentation map. Voila is a French word meaning “dekho kya kamaal ki cheez hai” or “come see the beauty”. It is not essential to use French in management, but nowadays so many people have learnt English that this is no longer an advantage, unless you can speak it with an accent like Montek Singh Ahluwahlia. I once heard him on television from an adjacent room and thought hewas Queen Elizabeth.

Let us use an example to understand how this works.

Consider the Vote Market. In the Vote Market, various politicians are positioning themselves in various ways in order to get your vote. Traditionally, the key factor in politics has been the wing. Some politicians are Right-wing, while others are Left-wing. They often fight to prove their leftness or rightness. For example, Communists are very mad at the Aam Aadmi Partyfor trying to occupy their space, which is why they have accused them of everything except child molestation. The case on the Right is very similar. This constant battle on one narrow axis limits the scope for new entrants in the market.

But suppose we introduce a second factor? Traditionally, appearance has been an asset for politicians. In the US, the handsomeness of John F Kennedy was a plus point for him.Even today, this principle would apply, and many fear that Priyanka Gandhi could get a lot of votes because look at her complexion, no? In order to level the playing field, let us look at overall appearance, not just God-given looks. This makes clothingvery critical.

A market defined on this basis would look like this.

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Now let us place some of the existing players on this map.

If you click on the names, you can verify for yourself whether the placement has been correct.

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Voila! (Do you remember what this means?). Immediately you have a much clearer picture of this market. It also indicates what different brands can do to change their brand positioning. For example, Mamata Banerjee could dress better, and move up towards Brinda Karat. She would then get invited to more parties.

For a new brand, or an old brand that wants to re-position itself, this map also indicates gaps that could be occupied, like this one.

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One man has seen this opportunity and moved swiftly to occupy it. Seeing that the other segments were crowded, he has defined a niche of his own for himself.

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This is an example of successful use of market segmentation. As you can see, Mr Modi is unchallenged. His only potential challenger is Mr Chidambaran, who is gradually shifting right, but someone is constantly tugging on his veshti pulling him back.

Let us look at another case, which is of Indian novels written in English. Since you are reading this, you must know English. Since you know English, at some point you must have thought, if an idiot like XYZ can be a novelist, then I can be one too. This is quite true, but application of the Market Segmentation Model can help make your effort more successful.

We can define the X-axis and Y-axis for this market in many different ways, but here is one way to do it.

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Current English novels in India occupy two broad areas on this map.

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Authors are gaining great success, and they will continue to do so. As the crowd increases, however, it is becoming harder. But because we are management experts and know how to use advanced tools, we can easily see a way out of this trap, which will combine successful techniques used by others in a scientific way.

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Thus the ideal product for this market would be a novel in which Lord Shiva goes to IIT. However, is this enough? Can blind reliance on tools, however advanced, truly bring stupendous success?

The answer is NO. Sometimes you have to think out of the box. One must not be rigid, as Asaram Bapu said during his potency test. Here is an example of another great success, which our current map does not recognise. If we factor this in, than the ideal bestselling novel could be described as follows :

“In which Lord Shiva goes to IIT and falls in love…again”.

As you can see, this powerful tool that I have just given you can help you succeed in almost any field. As a management person, you have great power. Use it wisely, because with great power comes great responsibility.

Peepwell Case: Student Feedback

As we had hoped, several potential stars are already emerging. Vigilant Indian in particular looks like a future CEO of Microsoft. He gave us some good points:

RFM Analysis: I have no idea what this means, but if you say it with conviction, I have no doubt that the audience will be impressed. Don’t forget to mention that you will soon be arriving at independent scores for R, F and M.

Blanket As Medium: Blankets have large surface areas, and there is no reason why this cannot be used to communicate something. Peepwell could practice political market segmentation. Blankets with a lotus motif could appeal to BJP supporters, while cute khaki shorts could appeal to RSS sympathisers. The principle can be extended to a Jupiter motif for Congress supporters, buffaloes for the Samajvadi Party etc. etc.

Purposive Segmentation: The blanket market can also be segmented as per purpose e.g. making children soundproof.

Student Human has suggested a Cross-Marketing initiative, whereby Peepwell ties up with the AAP and launches a scheme of one floral blanket free with every membership (“As worn by CM on TV!”)

Student N Jayaram has suggested treating Madhu Kishwar as a market segment. I am too scared of Madhu Kishwar to respond to this.
The author can be contacted at shovon@hotmail.com and on Twitter  @Shovonc

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