FlyOnI.com |

Customer Segmentation is a common jargon in marketing. It is said that every company should first segment its customers, choose the target segment and then aim to satisfy their needs. With Internet gaining ground and becoming the ‘the’ way of doing business, it becomes imperative for companies and internet marketers to understand the consumer behavior. Prior to any marketing efforts on internet, one should know the answers to the following question.

Do I know know how to segment the customers on the basis of their internet usage pattern?

Or

Are “All users are equal for me” ?

If you don’t have this primary information, there are good chances that your efforts do not produce the desired results, no matter how effective they were for others or how hard you try.How should you go about this task ?The answer is being provided by a study conducted by Mckinsey and Media Metrix which identifies internet consumer segmentation for the first time on their usage patterns.According to the study, the different categories are:

1) Simplifiers “End-to-End” Convenience seeking people. They spend on an average 7 hours per month but have the longest tenure online(49% have been online for over 5 years). Therefore if an internet marketer wants to have sustained sales from this segment, they must provide end-to-end convenience such as ease of access, availability of information etc.

2) Surfers Logs in with a specific purpose in mind- buying gifts for example. According to the study, they constitute 8% of the active user population but account for 32% of the online time.To attract and keep Surfers, a site needs cutting-edge design and features, constant updates, a strong online brand, and an assortment of products and services.

3) Connectors As the name implies,they use the internet to connect with people through different means like email, chat etc. Although Connectors account for 36% of the active user population, 40% of them have been online less than two years, and just 42% have made purchases online (versus an average of 61%). Connectors may count on offline brands they trust to lead them to appealing content and hence Companies with strong offline presences will have the advantage in reaching these beginners.

4) Bargainers These people are driven by quest for deals. 52% of eBay visitors is constituted by this category. To extract sales from this segment, the site must not only appeal to them on rational level but also on emotional level, satisfying their need for competitive pricing, the excitement of the “search,” and the desire for community.

5) Routiners They primarily go to internet for information. As the name implies these folks are routine visitors who are suckers for news. These people visit fewer domains but spend almost twice the time per page than others do. Routiners want superior content and the sense they are getting “something special.”

6) Sportsters Uses internet mainly for sports and entertainment related information. They spend on an average of 7.1 hours( versus 9.8 average). The challenge for companies is to turn this use into revenue, usually by moving visitors from “free” content to a paid subscription.As it is clear from the study that each consumer has different needs and usage pattern thereby giving rise to a different behavior. And therefore the knowledge of these behaviors provide an advantage to online marketers to target their customers in a much better optimized manner.

Why not share!

Marketing is often characterized by 4 Ps concepts namely:

Product: This aspect deals with the specifications and features of the product and these satisfy the needs and wants of the targeted customers.

Price: As the name implies, it stresses upon the right price of the product so that the customer get value for money.

Place: It is also known by distribution. Basically it entails how a product gets to customers. What are the points from where a customer can pick up the product?

Promotion: This concept comprises advertising, branding and selling of the products.

The advent of Web 2.0 and e-commerce has put the whole picture into different perspective. Today marketers have to deal with new market forces which simply did not exist previously. Therefore to cope up with the new trends, 4Ps model has also undergone a change. New 4Ps model was devised by Idris Mootee in 2001 to supplement traditional marketing 4Ps.

Personalization: It is said that the companies should always strive for mass customization to gain more profits. With internet, it has become a reality i.e. customization of products and services to customer’s needs. Famous examples are Amazon and Dell which not only altered the traditional distribution channel (place) but set the benchmark for others to follow.

Participation: Any company exists to fill certain gaps in the value chain by satisfying some or the other need of the customer. Therefore it becomes imperative that the customers decide what a brand should stand for, what would be the product direction. Essentially this concept advocates democratization of information.

Peer-to-Peer: As the name suggests, it refers to customer networks and communities where the brand is being talked about. Brand engagement happens within the conversations among the users. A case in point is etsy.com where peer-to-peer communications has led to the vast growth of this virtual market.

Predictive Modeling: This refers to intelligent neural network algorithms which are deployed to solve marketing problems.

All these changes in the business environment have kept marketers on toes and on the look out for new untapped greener pastures.

Why not share!

With total global internet users estimated at 1320 million by 2007 year end with growth rate in
excess of 265% between 2000 and 2007, internet has become a powerful medium for communications. India boasts of 42 million users with the growth pegged at 28%. Increasing e-commerce has opened up new gates for the companies to target their potential customers through internet marketing. Currently standing at $36 billion, internet marketing is expected to grow at 69% over the next three years. Touted as fastest growing media, internet will overtake magazine marketing by 2010 and is expected to acquire 11.5% of total ad spends by the same year. In 2006, e-commerce turnover hit $12.8 trillion, taking up 18% in global trade of commodities. With such robust growth rates in e-commerce, internet marketing is bound to take off in a big way. The figure for India stands at 9000 crore with annual growth rate of 30%.According to TNS media Intelligence Reports, Internet display advertising posted a 16.7 percent increase to $2.70 billion, as marketers continued to expand their online programs in US. The table has been reproduced below. 

As clearly visible from the table, internet marketing has seen a robust growth rate in the past and is set to take a sizeable share in the whole pie. Talking about global scenario, according to ZenithOptimedia report, internet advertising is worth $36 billion in 2007 and is expected to grow by 28% in 2008 and 69% over the next three years. For India, the figure currently stands 500 crores and set to explode.

Conclusion

With growing penetration rate across continents coupled with ever increasing per capita time spent on the internet, it becomes a perfect medium for informing potential customers about products and services. Rapid growth in internet marketing is a testimony to this fact. The companies would have to integrate internet marketing in their marketing ecosystem if they want to keep afloat in this ever changing dynamic market. In future, as more and more businesses would go online, internet marketing would take over conventional marketing and would have a major chunk of the whole pie and hence presents an opportunity which needs to be tapped timely.

Why not share!