Segmentation, Targeting and Positioning - Learn Customer Analytics

Summary

This video introduces the synergy between customer analytics and data science, emphasizing the significance of understanding customer needs for business success. It outlines the 'S T P framework'—segmentation, targeting, and positioning—as a foundational marketing strategy. The course focuses on segmenting customers based on demographic and psychographic data, and positioning products to meet their specific needs through the Marketing Mix. Aimed at beginners, it offers a comprehensive data science training program, including courses on Time Series Analysis and Credit Risk Modeling.

Takeaways

• 💡 **Career in Customer Analytics**: A career in data science within customer analytics is a smart choice as leading companies seek skilled professionals to understand customer needs and provide desired products.
• 🔍 **Understanding Customers**: Companies require individuals who can utilize data to comprehend customer needs, which is fundamental for delivering tailored products and services.
• 🛠️ **Building Analytics Capabilities**: Essential skills include constructing analytics tools that aid in creating innovative customer experiences.
• 🧠 **Technical vs. Customer Understanding**: While technical analysis is crucial, a deep understanding of the customer is necessary for meaningful contributions to a company.
• 📈 **Importance of Customer Analytics**: Customer analytics is vital for successful business operations, with 'Know Your Customer' (KYC) principles being central to marketing strategies.
• 📊 **STP Framework**: The course focuses on the Segmentation, Targeting, and Positioning (STP) framework, a fundamental marketing model applicable across various business areas.
• 🏢 **B2C Business Model**: The datasets used are from B2C businesses, providing a richer data set for analysis due to the individual consumer focus.
• 🛒 **FMCG Data**: Fast-moving consumer goods (FMCG) companies, like supermarkets, provide abundant data due to frequent customer transactions, making them ideal for customer analytics studies.
• 🔑 **Segmentation Process**: Segmentation involves dividing customers into groups with similar characteristics and behaviors, which can predict their response to marketing strategies.
• 🎯 **Targeting Strategy**: Targeting is about assessing potential profits from each segment and deciding which to focus on, considering factors like segment size and growth.
• 🏷️ **Positioning and Marketing Mix**: Positioning involves determining product characteristics that meet segment needs and how to present and distribute these products, which is explored through the Marketing Mix framework.

Q & A

What is the main focus of a career in customer analytics?

A career in customer analytics focuses on using data to understand customers' needs and providing products that customers want to buy, as well as building analytics capabilities to deliver innovative customer experiences.

Why is understanding the customer so crucial in customer analytics?

Understanding the customer is crucial because it enables companies to tailor their offerings to meet customers' needs, which is key to creating, communicating, and delivering products and services effectively.

What does the 'KYC' acronym stand for in the context of customer analytics?

KYC stands for 'Know Your Customer,' which is a principle that helps companies create, communicate, and deliver offerings by tailoring them to their customers' needs.

What is the 'STP framework' in marketing?

The 'STP framework' stands for Segmentation, Targeting, and Positioning. It is a fundamental marketing framework that outlines the process of exploring potential customers and understanding them to tailor marketing strategies.

How does the segmentation process in customer analytics work?

Segmentation involves dividing a population of potential or existing customers into groups with similar characteristics, which are likely to have comparable purchase behaviors and respond similarly to marketing activities.

What types of characteristics do marketers use for segmentation?

Marketers use two broad groups of characteristics for segmentation: demographic and geographic data (like age, income, education level), and psychographic characteristics (like planned vs. impulsive buying behavior).

What is the purpose of targeting in the 'STP framework'?

Targeting involves evaluating the potential profits from each segment and deciding which segments to focus on, considering factors like segment sizes, expected growth, and competitors' offerings.

What does positioning involve in the context of the 'STP framework'?

Positioning involves determining the product characteristics that customers from a certain segment need and offering products with those characteristics, as well as deciding how to present and channel the product to the customers.

What is the Marketing Mix and how does it relate to positioning?

The Marketing Mix is a framework that details the specific elements a company uses to market a product, including product, price, place, and promotion. It is closely related to positioning as it helps in deciding how to present and sell the product to the targeted segments.

What type of business model does the course use as an example for customer analytics?

The course uses a B2C (Business-to-Consumer) business model as an example, specifically from a Fast-Moving Consumer Goods (FMCG) company, which is ideal due to the abundance of data available from daily consumer purchases.

What does the 365 Data Science program offer for those interested in a career in data science?

The 365 Data Science program offers a comprehensive set of data science courses to develop the full skillset for a data science job, including beginner-friendly courses on mathematics and statistics, and specialized courses like Time Series Analysis and Credit Risk Modeling.

Outlines

00:00

📊 Introduction to Customer Analytics and Data Science

This paragraph introduces the video's focus on customer analytics and data science, emphasizing the importance of understanding customer needs through data to drive business decisions. It highlights the value of a career in customer analytics, explaining that companies seek data scientists to enhance their customer analytics teams. The paragraph outlines the necessity of both understanding customer needs and building analytics capabilities for innovative customer experiences. It also introduces the 'S T P framework' (Segmentation, Targeting, Positioning) as a fundamental marketing strategy, noting that the course will concentrate on the customer aspect of analytics, with a particular focus on B-2-C businesses like fast-moving consumer goods (FMCG) companies, which provide abundant data for analysis.

05:00

🎯 Deep Dive into Segmentation and Targeting

Paragraph 2 delves into the specifics of customer segmentation, explaining it as the process of dividing customers into groups with similar characteristics and behaviors. It discusses the use of demographic and geographic data in segmentation when consumer behavior data is unavailable, and the preference for psychographic and behavioral data when it is available. The paragraph then moves on to targeting, which involves assessing potential profits from each segment and deciding which to focus on. It mentions that targeting often involves qualitative analysis and budget considerations, which are beyond the scope of the customer analytics course. The paragraph concludes by setting the stage for the course's exploration of the 'S T P framework,' with an emphasis on segmentation and positioning, including the Marketing Mix, which will be covered in more detail in subsequent videos.

Keywords

💡Customer Analytics

Customer analytics refers to the systematic analysis of customer data to understand customer behavior, needs, and preferences. In the video, it is highlighted as a crucial component for companies to provide products that customers want to buy. It's the foundation for making data-driven decisions in marketing and business strategies.

💡Data Science

Data science is an interdisciplinary field that uses scientific methods, processes, algorithms, and systems to extract knowledge and insights from structured and unstructured data. The video emphasizes the importance of data scientists in customer analytics teams to build analytics capabilities for innovative customer experiences.

💡KYC (Know Your Customer)

KYC stands for 'Know Your Customer' and is a process that helps businesses understand their customers' needs to tailor their offerings effectively. The video mentions KYC as a key principle that differentiates successful companies by enabling them to create, communicate, and deliver offerings that align with customer needs.

💡STP Framework

The STP framework, which stands for Segmentation, Targeting, and Positioning, is a fundamental marketing concept discussed in the video. It outlines a process for exploring potential customers, understanding them, and then marketing to them effectively. The video focuses on this framework to explain how to approach customer analytics.

💡Segmentation

Segmentation is the process of dividing a market into distinct groups of customers with similar needs, characteristics, or behaviors. In the video, segmentation is the first step of the STP framework, where potential or existing customers are grouped based on shared traits to predict similar purchase behaviors.

💡Targeting

Targeting involves selecting the most attractive market segments to focus on based on their potential profitability. The video explains that after segmenting the market, companies decide which segments to concentrate their marketing efforts on, considering factors like segment size and growth potential.

💡Positioning

Positioning is the act of designing the company's offering and image so it occupies a distinct and appealing place relative to competitors in the target customers' minds. The video suggests that after targeting, companies need to position their products to meet the specific needs and preferences of the chosen segments.

💡Marketing Mix

The marketing mix, also known as the '4 Ps' (Product, Price, Place, Promotion), is a set of variables that a company can control to influence the demand for its products. In the video, the marketing mix is mentioned as a framework that is closely related to positioning and is explored in more detail in the course.

💡FMCG (Fast-Moving Consumer Goods)

FMCG stands for Fast-Moving Consumer Goods, which are products that are sold quickly and at relatively low cost. The video uses the example of a supermarket to illustrate FMCG, where customer data is abundant due to frequent purchases, making it an ideal setting for customer analytics.

💡Time Series Analysis

Time series analysis is a statistical technique that deals with time series data or analysis based on the temporal order of observations. While not directly discussed in the video, it is mentioned as part of the broader data science training program, suggesting its relevance in analyzing customer behavior over time.

💡Credit Risk Modeling

Credit risk modeling is a technique used to predict the likelihood of a borrower defaulting on a loan. The video briefly mentions this as an advanced topic within the data science training program, indicating its application in specialized areas of customer analytics.

Highlights

Leading companies seek data scientists for customer analytics teams.

A career in customer analytics is a smart choice due to high demand.

Understanding customer needs is crucial for product development.

Data scientists build analytics capabilities for innovative customer experiences.

The importance of focusing on the customer aspect of customer analytics.

The 365 Data Science program offers comprehensive data science training.

Customer analytics is integral to marketing and business success.

KYC (Know Your Customer) is essential for tailoring offerings to customer needs.

Customer Analytics includes a broad range of customer characteristics and behaviors.

The 'S T P framework' is a fundamental marketing framework for customer analytics.

Segmentation divides customers into groups with similar characteristics and behaviors.

Marketers use demographic and geographic data for segmentation when behavior data is unavailable.

Psychographic characteristics are used for segmentation when customer behavior data is available.

Targeting involves evaluating potential profits and deciding which segments to focus on.

Positioning is about determining product characteristics needed by targeted customer segments.

The Marketing Mix framework is used for product positioning and presentation.

The course will cover segmentation and positioning, including the Marketing Mix.

Transcripts

Hi everyone! This is a quick crash course video where we’ll talk about customers analytics,

data science, and how the two work together! Alright, here’s something we all know – leading

companies are always on the lookout for savvy data scientists to join their fast-growing

Customers Analytics teams. In that sense, considering a career as a data scientist in

customer analytics is a super smart choice. But here’s why exactly:

First, companies need people who know how to use data to understand their customers'

needs. Once they understand their needs, they can provide the products customers want to

buy. Second – and that’s a bit more technical

– companies need people who have the skills to build the analytics capabilities that will

help them provide these innovative customer experiences.

In these videos, we’ll be focusing on the customer part of customers analytics. Why?

Because even if you know how to do the technical analyses well, unless you understand the customer,

you won’t be able to meaningfully help your company. So let’s build those foundations,

shall we? Just one more thing before we get started!

We’d like to mention something else we’ve put together – a very comprehensive data

science training. The 365 Data Science program contains the full set of data science courses

you need to develop the entire skillset for the job. It’s completely beginner-friendly.

For example, if you don’t have any maths or statistics knowledge, we’ll teach you

that first. And if you’d like to build a more specialized skillset, you can do that

with courses on Time Series Analysis, Credit Risk Modeling and more.

If you’d like to explore this further or enroll using a 20% discount, there’s a link

in the description you can check out. Perfect! Now, let’s get into customers analytics.

A good understanding of customers is extremely important for running a successful business.

KYC or ‘know your customer’ is what actually makes all the difference for many companies.

KYC helps them do their best in creating, communicating, and delivering their offerings

by tailoring them to their customers’ needs. And that makes customer analytics the most

important part of both marketing analytics and the marketing function of a company in

general. But understanding and meeting customers’

needs is easier said than done. In fact, Customer Analytics is a very broad area. It may include

a wide range of characteristics of customers and their behavior and numerous different

outcomes and performance indicators that the business might be interested in. That’s

why in this course we’ve decided to focus on one of the most fundamental marketing frameworks

– that of segmentation, targeting, and positioning, known as the ‘S T P framework’.

The ‘S T P framework’ is the most logical choice, as it applies to all areas of business

and marketing activities. The datasets that we’ll work with come from a B-2-C business

model. This means that the clients of our business are individual people rather than

firms or institutions. And that’s much better from a data science point of view, as we usually

have more data points. Okay.

The data we’ll use throughout the course come from a fast-moving consumer goods, or

‘F M C G’ company. A typical example of an ‘F M C G’ marketplace is a supermarket.

People visit supermarkets every day and most types of goods in-store are purchased daily,

too. Therefore, we have lots and lots of data available, making ‘F M C G’ a perfect

example for our customer analytics course. Great!

Now that we’ve clarified that, let’s take a closer look at the ‘S T P’ framework.

It lays out the classical process of exploring potential customers and understanding them.

The ‘S T P framework’ consists of 3 consecutive steps:

• S for Segmentation • T for targeting,

• and P for positioning. Let’s start with segmentation.

Segmentation is the process of dividing a population of potential or existing customers

into groups that share similar characteristics. The underlying idea is that, most likely,

these groups will have comparable purchase behaviors. Furthermore, these segments would

probably respond similarly to different marketing activities.

For example, not everyone likes the same brand of chocolate candy bars. Moreover, not everyone

can afford the same brand of chocolate. However, based on certain characteristics like income,

age, and gender we could divide our customers into segments where each segment prefers a

certain type of chocolate. Marketers make the case that taste or spending

habits are not the only behavioral features that could be generalized for a segment. In

fact, people within the same segment may also respond in the same way to different marketing

activities. Examples are TV advertising, online advertising, and promotions. Moreover, individuals

from different segments may respond differently to each of these marketing activities.

So far, so good. But what characteristics exactly do marketers

use to perform segmentation? In general, the types of characteristics used

for segmentation may be separated into two broad groups, based on whether marketers are

using consumer behavior data or not. Most often, especially in the process of new

product development, consumer behavior data are not available. Therefore, marketers rely

mainly on demographic and geographic customer data: age, income, education level, and others.

In other cases, marketers can use psychographic characteristics. For example, some customers

have a better-planned buying behavior, while others - more impulsive.

Alright. The second type of segmentation characteristics

is much preferable. It’s used when we have existing data for the customers’ consumer

behavior. For instance: historical data from purchases, how often customers buy, at what

time they buy, what quantities they buy, product ratings and many more. Usually, based on these

specific criteria we can divide the customers into much more representative segments.

And in this course, we will look precisely into that!

Great! Once we have our segments it’s time for

the second stage from the ‘S T P‘ framework: Targeting.

Targeting involves evaluating the potential profits from each segment and deciding which

segments to focus on. Marketers may decide to offer products to one segment, to all segments,

or just to a selected few. They take into consideration factors such as segment sizes,

expected growth, and competitors’ offerings. This stage of the framework is also the point

at which we decide on the different ways to promote our products. We can target one segment

on TV and another online. Unfortunately, targeting activities are often

focused on the qualitative examination of the consumers' perceptions. They involve psychology

and usually budget constraints. Therefore, targeting goes out of the scope of this customer

analytics course and into the ‘advertising’ territory.

Alright. Finally, once marketers have decided which

segments to target, we come to Positioning. In Positioning, the important question to

answer is what product characteristics do the customers from a certain segment need?

Or more like, what product can be offered to them that would have the characteristics

closest to the ones they need? So, we can say that positioning consists of implementing

the targeting actions for the product. But positioning concerns not only the characteristics

a product should have but also how it should be presented to the customers and through

what channel. In fact, this process is so important, that it has a framework of its

own called: Marketing Mix. In this course, we’ll learn how to perform

the S and P parts of the ‘S T P framework’. The first big part of the course will be devoted

to segmentation of customers, while the second - to positioning, and more precisely to the

Marketing Mix. And Marketing Mix is what we’ll explore

in more detail in one of our next videos. We hope you found this video helpful. And

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