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Tuesday, April 27, 2010

Obama: The Right and Wrong Way to Target a Market

President Obama’s recent video clip on the DNC 2010 voting site (http://2010.democrats.org/) represents a teachable moment in how to segment (another word for diving up and organizing) a market and target a specific group within that market. Just as there are numerous ways to organize a deck of 52 playing cards (by suit, by face cards/non face cards, red/black, point cards/non point cards, etc. etc.), there are numerous ways to segment a market – whether the market is defined as a market of consumers purchasing a product or a market of voters in a Congressional race. Effective market segmentation requires that the members of each market segment be as similar (homogeneous) as possible and that each segment be as different (heterogeneous) as possible from other segments.

One way to segment and target a market is to do what Obama has done here - categorize the market based strictly on demographics such as race, gender, income etc. Demographic segmentation represents the most basic and rudimentary way to segment a market, and is often one of the least effective ways to divide up a market. Why? Because while marketers can infer some things about segments by their gender, race, and income levels, too often this results in “stereotypes” that may or may not be true about the segments’ members. It is an especially poor way to segment for any product that tries to appeal to its market in an emotional way – fashion, beverages, alcohol, and of course, politics.

So what should Obama and the DNC have done? Clearly, they need to do a better job in segmenting the market based upon more of a psychographic approach vs. a demographic approach. In other words, the market should be segmented and targeted based upon any number of psychographic measures, including the attitudes and beliefs of the market (for example, feelings on where the country should be headed, feelings on initiatives that have been passed, etc.), values of the market (at its core, what is most important to voters), voter frequency/likelihood, or even personality of the market.

Don’t believe me? Next time you are at a mall, go into an Apple store and look strictly at the demographics of the customers in the store. Chances are you will find every age, gender, and ethnicity within the store. Why? Because Apple doesn’t segment the market based on demographics. Apple segments the market based on values, attitudes, and likelihood to adopt new products. It targets those consumer segments that are most likely to want to try and adopt the products that Apple puts out. Think about the commercials for the I-pad/I-phone, etc. How many times do you actually see a user? The messaging focuses on the product and the features that will appeal to a wide range of users from 7 to 70.

It’s a lesson that the Obama team should take to heart.