Even the world's most perceptive observer of what people want will have a hard time accounting for every consumer in the increasingly complex global telecommunications market. Today's consumers are flooded with products and services and are more diverse and more difficult to please than ever.
To meet this challenge, and to be able to lead the way, an optimized and understandable segmentation model for measuring major differences between consumers is essential.
“Most operators have some model in place for targeting consumers,” says Declan Lonergan, vice president, Consumer Research, at analyst firm Yankee Group. “But most of them are not up to date. The consumers are saturated; there are more and very different kinds of services today than just a few years ago. Every player in the industry now needs a much deeper understanding of the consumer.”
Lonergan hopes that during the GSMA Mobile World Congress 2008, February 11-14, operators will embrace the need for consumer insight and segmentation more enthusiastically than in earlier years.
“It is work that has to be done and when we discuss this with operators they are aware of that,” he says. “But it is a huge task to get it in place, and at events like the Mobile World Congress, new technology is often a hotter topic than consumer segmentation. However, consumer insight will always be bubbling underneath everything you do or want to do.”
Ericsson's unit for consumer insight and segmentation, ConsumerLab, has had successful segmentation models and tools in place for decades. But it has also recently advanced and optimized its Global Consumer Segmentation framework, including a new global model. The model is based on the outside-in perspective to fully capture the market dynamics. In other words, Ericsson's segmentation starts with the consumer and not only uses characteristics such as age, gender, income, geographical location and consumption patterns, but also values, attitudes and life stages to explain market dynamics.
“Everything is more complex now. The market is changing, and the consumer is becoming increasingly important,” says Henrik Pålsson, head of Ericsson ConsumerLab. “How are you going to know both what makes a teenager in the UK tick and what is important to a farmer in Uganda? The Global Consumer Segmentation Model measures differences between consumers regarding their needs as well as their basic views on mobile communication, handsets, functions and services today and in the coming three to four years.”
The model has a pure individual focus, and it segments consumers into eight groups such as pioneer youth, mainstream materialists and basic phoners. So far, several hundred thousand interviews have been carried out all over the world.
“Ericsson has experience in this area and is innovative, and our customers recognize it,” says Pålsson. “We work with them to share this knowledge. Segmentation will become an increasingly important part of our relationship with our customers.”
Lonergan agrees. “Operators will look increasingly to companies such as Ericsson to help them with consumer segmentation, and benefit from it,” he says.
