Metalcraft: a case study of different market segments

Welcome to Case Study 5 of the series. I'm Roddy Mullin, a business consultant, making retail firms, the professions, government bodies and charities make money since 1987. I'm both a chartered marketer and a chartered engineer. I'm also an author of marketing and sales books since 1999. See the last but one slide for a list of my books.

Though there are many case studies available to view online, searching for them is time-consuming. Case studies illustrate ideas and success, pitfalls or failure of marketing, advertising and sales. See the previous case studies in this series for a full explanation of the benefits, or read my books. This is a case study I've called "Different Market Segments" because that was the key parameter by which a company manufacturing metal sculptures managed to handle over 400 retail customers, split into three market segments, each group with quite different perceptions of the company itself. Once this had been realised and a routine for handling each of them established, it all worked very well.

The simple message for everyone is you must place your customer at the center of your business. Start with the customer and through insight, that is market research, however obtained, the Engram for example, which analyzes social media, establish the customer's needs and the way they think, all from the customer viewpoint. Whether they are a business buyer or the end customer, they have a view. Remember too, that as individuals, that view may change depending on their circumstance. Myer, of Australia, have segmented their customers according to the way they shop, as much as on the basis of what they buy. "Busy Belinda", always in a hurry and often with kids. "Premium Polly", who loves designer and high-end trends. "Trendy TJ", would be and want to be Premium Polly's. "Low-involvement Lou", who'd rather not shop if they can help it, and "Discount Dora", who loves to snag a bargain. This has helped their marketers and staff in assessing how to treat shoppers. In this study, the segmentation was department stores, gift shops, and craft shops that sell art, sculptures, painting, and pottery. It is possible to segment, then throw out the non-value customers. A London City financial services firm's clients were analyzed, and only 10% out of hundreds were found to be very high-net worth, with a further 18% high-net worth, 72% were potentially valuable. The bulk of clients generated very little commission income. The 20-80 Pareto rule applied. The top 28 were profiled and across the city, a further 20,000 individuals with a similar profile were found. These identified high-value clients were targeted as a segment at a rate of 200 per year, seeking 20 new clients per year. Interestingly, they all preferred to pay on a fee basis rather than on a commission basis for the financial services offered. The fee income was considerably larger than the sum obtained from the previous commission-based operation. And the hundreds of other financial services' clients, they were sold to another firm. But let's move on to this case study example.