To boardrooms and sustainability: the changing nature of segmentation

Market segmentation is the process by which customers in markets with some heterogeneity are grouped into smaller homogeneous segments of more ‘similar’ customers. A market segment is a group of individuals, groups or organisations sharing similar characteristics and buying behaviour that cause them to have relatively similar needs and purchasing behaviour. Segmentation is not a new concept: for six decades marketers have, in various guises, sought to break-down a market into sub-groups of users, each sharing common needs, buying behavior and marketing requirements. However, this approach to target market strategy development has been rejuvenated in the past few years. Various reasons account for this upsurge in the usage of segmentation, examination of which forms the focus of this white paper. Ready access to data enables faster creation of a segmentation and the testing of propositions to take to market. ‘Big data’ has made the re-thinking of target market segments and value propositions inevitable, desirable, faster and more flexible. The resulting information has presented companies with more topical and consumer-generated insights than ever before. However, many marketers, analytics directors and leadership teams feel over-whelmed by the sheer quantity and immediacy of such data. Analytical prowess in consultants and inside client organisations has benefited from a stepchange, using new heuristics and faster computing power, more topical data and stronger market insights. The approach to segmentation today is much smarter and has stretched well away from the days of limited data explored only with cluster analysis. The coverage and wealth of the solutions are unimaginable when compared to the practices of a few years ago. Then, typically between only six to ten segments were forced into segmentation solutions, so that an organisation could cater for these macro segments operationally as well as understand them intellectually. Now there is the advent of what is commonly recognised as micro segmentation, where the complexity of business operations and customer management requires highly granular thinking. In support of this development, traditional agency/consultancy roles have transitioned into in-house business teams led by data, campaign and business change planners. The challenge has shifted from developing a granular segmentation solution that describes all customers and prospects, into one of enabling an organisation to react to the granularity of the solution, deploying its resources to permit controlled and consistent one-to-one interaction within segments. So whilst the cost of delivering and maintaining the solution has reduced with technology advances, a new set of systems, costs and skills in channel and execution management is required to deliver on this promise. These new capabilities range from rich feature creative and content management solutions, tailored copy design and deployment tools, through to instant messaging middleware solutions that initiate multi-streams of activity in a variety of analytical engines and operational systems. Companies have recruited analytics and insight teams, often headed by senior personnel, such as an Insight Manager or Analytics Director. Indeed, the situations-vacant adverts for such personnel out-weigh posts for brand and marketing managers. Far more companies possess the in-house expertise necessary to help with segmentation analysis. Some organisations are also seeking to monetise one of the most regularly under-used latent business assets… data. Developing the capability and culture to bring data together from all corners of a business, the open market, commercial sources and business partners, is a step-change, often requiring a Chief Data Officer. This emerging role has also driven the professionalism of data exploration, using more varied and sophisticated statistical techniques. CEOs, CFOs and COOs increasingly are the sponsor of segmentation projects as well as the users of the resulting outputs, rather than CMOs. CEOs because recession has forced re-engineering of value propositions and the need to look after core customers; CFOs because segmentation leads to better and more prudent allocation of resources – especially NPD and marketing – around the most important sub-sets of a market; COOs because they need to better look after key customers and improve their satisfaction in service delivery. More and more it is recognised that with a new segmentation comes organisational realignment and change, so most business functions now have an interest in a segmentation project, not only the marketers. Largely as a result of the digital era and the growth of analytics, directors and company leadership teams are becoming used to receiving more extensive market intelligence and quickly updated customer insight, so leading to faster responses to market changes, customer issues, competitor moves and their own performance. This refreshing of insight and a leadership team’s reaction to this intelligence often result in there being more frequent modification of a target market strategy and segmentation decisions. So many projects set up to consider multi-channel strategy and offerings; digital marketing; customer relationship management; brand strategies; new product and service development; the re-thinking of value propositions, and so forth, now routinely commence with a segmentation piece in order to frame the ongoing work. Most organisations have deployed CRM systems and harnessed associated customer data. CRM first requires clarity in segment priorities. The insights from a CRM system help inform the segmentation agenda and steer how they engage with their important customers or prospects. The growth of CRM and its ensuing data have assisted the ongoing deployment of segmentation. One of the biggest changes for segmentation is the extent to which it is now deployed by practitioners in the public and not-for-profit sectors, who are harnessing what is termed social marketing, in order to develop and to execute more shrewdly their targeting, campaigns and messaging. For Marketing per se, the interest in the marketing toolkit from non-profit organisations, has been big news in recent years. At the very heart of the concept of social marketing is the market segmentation process. The extreme rise in the threat to security from global unrest, terrorism and crime has focused the minds of governments, security chiefs and their advisors. As a result, significant resources, intellectual capability, computing and data management have been brought to bear on the problem. The core of this work is the importance of identifying and profiling threats and so mitigating risk. In practice, much of this security and surveillance work harnesses the tools developed for market segmentation and the profiling of different consumer behaviours. This white paper presents the findings from interviews with leading exponents of segmentation and also the insights from a recent study of marketing practitioners relating to their current imperatives and foci. More extensive views of some of these ‘leading lights’ have been sought and are included here in order to showcase the latest developments and to help explain both the ongoing surge of segmentation and the issues under-pinning its practice. The principal trends and developments are thereby presented and discussed in this paper

Alter ego, state of the art on user profiling: an overview of the most relevant organisational and behavioural aspects regarding User Profiling.

This report gives an overview of the most relevant organisational and\ud behavioural aspects regarding user profiling. It discusses not only the\ud most important aims of user profiling from both an organisation’s as\ud well as a user’s perspective, it will also discuss organisational motives\ud and barriers for user profiling and the most important conditions for\ud the success of user profiling. Finally recommendations are made and\ud suggestions for further research are given

CRM packaged software: a study of organisational experiences

Customer Relationship Management (CRM) packaged software has become a key contributor to attempts at aligning business and IT strategies in recent years. Throughout the 1990s there was, in many organisations strategies, a shift from the need to manage transactions and toward relationship management. Where Enterprise Resource Planning packages dominated the management of transactions era, CRM packages lead in regard to relationships. At present, balanced views of CRM packages are scantly presented instead relying on vendor rhetoric. This paper uses case study research to analyse some of the issues associated with CRM packages. These issues include the limitations of CRM packages, the need for a relationship orientation and the problems of a dominant management perspective of CRM. It is suggested that these issues could be more readily accommodated by organisational detachment from beliefs in IT as utopia, consideration of prior IS theory and practice and a more informed approach to CRM package selection

A SON Solution for Sleeping Cell Detection Using Low-Dimensional Embedding of MDT Measurements

Automatic detection of cells which are in outage has been identified as one of the key use cases for Self Organizing Networks (SON) for emerging and future generations of cellular systems. A special case of cell outage, referred to as Sleeping Cell (SC) remains particularly challenging to detect in state of the art SON because in this case cell goes into outage or may perform poorly without triggering an alarm for Operation and Maintenance (O&M) entity. Consequently, no SON compensation function can be launched unless SC situation is detected via drive tests or through complaints registered by the affected customers. In this paper, we present a novel solution to address this problem that makes use of minimization of drive test (MDT) measurements recently standardized by 3GPP and NGMN. To overcome the processing complexity challenge, the MDT measurements are projected to a low-dimensional space using multidimensional scaling method. Then we apply state of the art k-nearest neighbor and local outlier factor based anomaly detection models together with pre-processed MDT measurements to profile the network behaviour and to detect SC. Our numerical results show that our proposed solution can automate the SC detection process with 93 accuracy

Investigating e-business practices in tourism :a comparative analysis of three countries

This study examined the behaviour of tourist companies in relation to the adoption of e-business technologies and applications. The study aimed to identify groups of companies with homogenous behaviour among three European countries (Greece, Portugal and Norway). Based on data from a European survey, the study employed two-step cluster analysis which revealed 14 clusters of common behaviour (five clusters in Greece, five in Portugal and four in Norway). These clusters were named as: Leaders’ ‘Technology Experts’, ‘Fast Adopters’ ‘Beginners’, ‘Late Adopters’. In Norway, the group ‘Late Adopters’ also included companies characterised as ‘Beginners’ in the other two countries. We suggest further investigation among European countries in order to reveal more groups of similar behaviour toward e-business adoption

Models, Techniques, and Metrics for Managing Risk in Software Engineering

The field of Software Engineering (SE) is the study of systematic and quantifiable approaches to software development, operation, and maintenance. This thesis presents a set of scalable and easily implemented techniques for quantifying and mitigating risks associated with the SE process. The thesis comprises six papers corresponding to SE knowledge areas such as software requirements, testing, and management. The techniques for risk management are drawn from stochastic modeling and operational research. The first two papers relate to software testing and maintenance. The first paper describes and validates novel iterative-unfolding technique for filtering a set of execution traces relevant to a specific task. The second paper analyzes and validates the applicability of some entropy measures to the trace classification described in the previous paper. The techniques in these two papers can speed up problem determination of defects encountered by customers, leading to improved organizational response and thus increased customer satisfaction and to easing of resource constraints. The third and fourth papers are applicable to maintenance, overall software quality and SE management. The third paper uses Extreme Value Theory and Queuing Theory tools to derive and validate metrics based on defect rediscovery data. The metrics can aid the allocation of resources to service and maintenance teams, highlight gaps in quality assurance processes, and help assess the risk of using a given software product. The fourth paper characterizes and validates a technique for automatic selection and prioritization of a minimal set of customers for profiling. The minimal set is obtained using Binary Integer Programming and prioritized using a greedy heuristic. Profiling the resulting customer set leads to enhanced comprehension of user behaviour, leading to improved test specifications and clearer quality assurance policies, hence reducing risks associated with unsatisfactory product quality. The fifth and sixth papers pertain to software requirements. The fifth paper both models the relation between requirements and their underlying assumptions and measures the risk associated with failure of the assumptions using Boolean networks and stochastic modeling. The sixth paper models the risk associated with injection of requirements late in development cycle with the help of stochastic processes

Performance measures of net-enabled hypercompetitive industries: the case of tourism

This paper investigates the theory and practise of e-metrics. It examines the tourism sector as one of the most successful sectors on-line and identifies best practice in the industry. Qualitative research with top e-Marketing executives demonstrates the usage and satisfaction levels from current e-metrics deployment, selection of e-metrics for ROI calculation as well as intention of new e-metrics implementation and future trends and developments. This paper concludes that tourism organizations gradually realise the value of e-measurement and are willing to implement e-metrics to enable them evaluate the effectiveness of their planning processes and assess their results against their short and the long term objectives