We share the same frustrations as innovation guru Clayton M. Christensen, Intuit's Cofounder and Chairman Scott Cook, and the Advertising Research Foundation's Chief Strategy Officer Taddy Hall, the authors of a recent piece in the Harvard Business Review, "Marketing Malpractice: The Cause and the Cure," with conventional approaches to market segmentation. They write, "the prevailing methods of [market] segmentation that budding managers learn in business schools then practice in the marketing departments of good companies are actually a key reason that new product innovation has become a gamble in which the odds of winning are horrifyingly low." They cite scenarios based on product-type and price point (e.g., this group wants a big expensive drill, this group wants a small but expensive drill, while that group wants a small, cheap drill) and type of customer (e.g., small, medium, large businesses; heavy, medium, light users; Baby Boomers, Gen Xers, Gen Yers, Echo Boomers, etc.) as examples of "broken paradigms of market segmentation."

Since market segmentation, and subsequently targeting strategy development, is one of the least well-developed skills in marketing today, we are happy to see one of marketing's dirty little secrets exposed in such a prestigious publication. At the same time, however, we have serious concerns about their recommended approach. Christensen et. al offer as an alternative defining buyer groups by the "jobs" that need to get done. "If a marketer can understand the job, design a product and associated experiences in purchase and use to do that job, and deliver it in a way that reinforces its intended use," they explain, "then when customers find themselves needing to get that job done, they will hire that product."

Unfortunately, the authors' job-based segmentation scenario is not new. In various forms, it's been around for two decades. It sounds identical to the occasions or situational segmentation many companies—McDonald's, most of the leading car manufacturers, and distilled spirits companies are ones we know of, for instance—already use today. To the authors' point, there are many, many categories where the specific job the buyer needs to get done, occasion, or situation has a major impact on the needs and problems customers have and are looking for products and services to solve. The authors talk about cars: you might be looking for a car for a child who's graduating from college; a car that will only be used to get you to and from the train each day; or a car that will impress your neighbors. Wine is another example. You might be looking for a wine for a special date; wine that will impress your neighbors; or a wine for a casual dinner at home. A quick service restaurant is yet another instance. You might go for a quick cup of coffee in the morning; a treat after a great presentation or a hard week at work; or for fun place to take the kids for their dinner. You get the picture. In these cases and many others, segmenting the market by situation or occasion offers important insights for strategy and programs.

What the authors don't seem to have considered are the categories where buyer interest in particular attributes or benefits of a product or service is a function of individual needs, problems, pains, preferences, and are not influenced by a distinct or unique event or issue, a time-period, a particular day-part, etc., in the buyer's life. For instance, whether you are brushing your teeth before a big date, before bed, before going to a wedding, or before going to the dentist, your needs and problems don't change dramatically. You want to fight cavities, have fresh breath, have a whiter smile, protect sensitive teeth, etc. In the market for life insurance? Whether you're shopping for life insurance for yourself or for a loved-one, you want a brand with a proven track-record that's going to be financially solvent for a long time, offers a variety of products, is sold by reputable agents, etc. These attributes and benefits are all technically "jobs" the product does for you, that's true, and could form the basis of a compelling positioning strategy, a.k.a., the reason for buying you promote to buyers. But we're not sure they form the basis of a workable market segmentation scheme. There's too many potential "jobs"—five or six different customer groups is one thing, but 25 to 30 is another. Besides, aren't the "jobs" in these cases more like the product "features and functions" that the authors rightly contend should not form the basis of segmentation?

Noticeably absent from all the authors' discussion of job-based segmentation is any mention of profitability. Perhaps this is implicit in the authors' minds—that marketers would consider the feasibility and costs associated with doing a job, as well as a buyer's price sensitivity—but we find it a troubling omission. It goes without saying that companies want to direct their marketing efforts to the group (or groups) of buyers that represent the highest economic value to the brand. Who in their right mind would want to go after folks who are uninterested in the brand, ultra-price sensitive, and uninvolved in the category? After they have the market segmented into different groups and marketers go to select a target, the question they should ask is not, "is there a job that a group of buyers wants/needs to get done that we can do for them," but "is there a job that a group of buyers wants/needs to get done that we can do for them profitably?"

Other profit-related criteria that marketers should consider include whether a segment is sufficient in size to merit disproportionate attention (e.g., 10 to 30 percent); growing rather than shrinking over time; and different demographically and therefore differentially reachable with media, salespeople, channels, etc. The mere existence of (or ability to create) a product or service in a company's arsenal that addresses a job the members of a particular segment need to get done is not any indication of the potential ROI of marketing investments aimed at one segment versus another.

Most disturbing to us, however, is the emphasis throughout the article on "the job, not the customer" as "the fundamental unit of analysis for a marketer." "Why do so many marketers try to understand the consumer rather than the job?" the authors opine. Most marketers generally ignore the customer to begin with so to encourage ignoring the customer borders on marketing malpractice itself.

Developing an actionable marketing segmentation that will enable a marketer to select a target group of buyers—which is why you do segmentation in the first place—that has the highest probability of returning a significant return on marketing investment, requires specific, individual-level customer information. If you just focus on the job and not the customer, you'll likely end up with some internally generated ideas about the jobs customers need to get done, but no information about their brand preferences, consumption patterns, demographics, and media exposure patterns—in other words, the elements that help marketers create distinctly different buyer groups. Sure, focusing on the job is great for generating new product ideas, but it doesn't do much for the other elements of marketing strategy.

The most effective way marketers have used the kind of job-based segmentation that the authors describe is to do a segmentation that is based on the customer—identifying the factors most predictive of profitability—and superimpose a job-based segmentation over it. In the categories where the specific job the buyer needs to get done, occasion, or situation has a major impact on the needs and problems customers have, most buyers will move in and out of different segments at different times. In the case of a quick service restaurant, for example, a target buyer might go in the morning for a quick cup of coffee on their way to work every day, every couple of days for an afternoon treat, and every now and then with the kids for a fun dinner. By understanding what jobs or occasions for which the most profitable customers might use a product, service, or brand most frequently, a marketer can better tailor marketing programs, products, services, etc. If the most profitable customers for wine, for instance, most frequently purchase the product for special events and to impress their friends, there's guidance on positioning, advertising messaging and timing, and more right there.

Again, we applaud the authors for raising the issue of poor segmentation as a root cause of routine marketing failure and we think their focus on jobs products and services can do has important implications for positioning and new product/service development. But when it comes to segmenting the market, a job-based approach is not new or universally applicable and a singular focus on the job, as opposed to the customer, is more dangerous than productive.

Nobel Laureate George Bernard Shaw famously quipped, "We learn from history that we learn nothing from history." There are plenty of examples in the geo-political and military spheres of leaders making similar egregious mistakes that turn out to be their undoing. Napoleon famously invaded Russia, occupied Moscow, and ignored the warnings of his generals about the extremes of the on-coming winter, significantly contributing to his ultimate defeat. Over 100 years later, Hitler followed in Napoleon's footsteps with the same result. There are also examples in business and, specifically, in marketing, the most recent of which is Bacardi's decision to follow the same course Bud, Miller, and Coors into brand oblivion.

For over a decade, Bud, Miller, and Coors followed a rapidly accelerating downward spiral towards the lowest common denominator of humor in their advertising. What began innocently enough with talking lizards and frogs moved on to "Boxing for Boobs," to women mud-wresting in a "cat fight," to well-endowed twins, to a farting horse and crotch-biting dog. Laura Ries, author of The Origin of Brands, commented that clearly the major beer marketers believed, "all men are idiots and all they think about are girls mud wrestling." Not only were these marketing communications efforts of rapidly declining entertainment value, but they also offered nothing in the way of a clear, compelling message about why to buy Bud, Miller or Coors. "Following the lead of A-B's [Anheuser-Busch] powerhouse Bud Light, brewers served a steady stream of humorous ads where entertainment value frequently overshadowed any effort to build or differentiate brands," lamented Advertising Age in its recent "The Death of Beer" report.

Thanks in large part to these ardent efforts, key demographic groups have now migrated from beer to other alcoholic beverage options. "People will tell you that beer is not sophisticated enough, or stylish enough, to compete with wine and spirits," Miller's CMO admitted to the Wall Street Journal. "Why do they think that? Well, I believe it's because we told them to." Now Baby Boomers choose wine, while young women and the older members of the Echo Boom (children of Baby Boomers born from the late 1970s through early 1990s) order spirit-based cocktails. Among the coveted 21-27-year-old target, 40% said spirits were their favorite drink compared to less than 30% in 2003. A survey by Simmons Research showed 44% of white males 21 to 29 said they drank regular domestic beer in Fall 2004, down from 49% in Fall 1999. Just over 39% said they drank light beers in 2004, down more than a point from Fall 1999. Beer's share of the U.S. alcoholic-beverage market hit a record high of 61% in 1995, but has fallen to 58% over the course of the last decade. At the same time, spirits' share has inched up from 27% to 28% and wine from 12% to 14% during the same time period. In other words, wine and spirits are eating into beer's share.

The defection of key groups—particularly 21-27 year-olds—and loss of share has beer executives so rattled that there's growing momentum behind a movement to launch what the WSJ refers to as the beer industry's "equivalent of the dairy industry's popular 'Got Milk' campaign." "We've marketed our way into this problem," explained Miller's CMO, "and we can market ourselves out of it." The plan is for brewers to donate advertising space for the industry campaign spots. Possible executions include TV ads that would show different people around the world drinking beer and toasting in different languages and print ads with celebrities saying with whom they'd like to have a beer.

The beer industries problems didn't happen 100 years ago—they are happening now—so all we can figure is the brand managers of the world's best-selling rum have been living under a rock. How else to explain their decision to run the new Bacardi Guy and Cola campaign?

"In the past couple of years of tracking, we've been losing some share of that audience [adult consumers] to Grey Goose (vodka) and even losing some share to (rum rival) Captain Morgan," explained Bacardi's group marketing manager. "We had an opportunity to revitalize our brand among adult consumers, 21 to 29, specifically males. The goal is to get them to go up to that bar and order Bacardi and cola instead of rum and cola." With beer on the ropes, Bacardi picked an auspicious time to mount a new communications campaign to reinvigorate its rum brand.

Now emblazoned on the Bacardi rum bottle are the words "original premium rum." The company has over 140 years of history and precise distilling process to ensure quality, described in rich detail on its website. So one might think these attributes might form the basis of messaging in a new advertising campaign.

Strangely, there's nary a mention of premium attributes, history, or quality. There's not even a discussion of taste. Instead, spots feature "a dynamic duo saving the night—and amply endowed women," so reported the USAToday. The well-coiffed and mustached white Bacardi Guy and black Cola appear to be a spoof of Crockett and Tubbs of the popular 1980s cop show Miami Vice. Spots feature Bacardi Guy and Cola standing in different party-like atmospheres where air-headish women with big boobs and tight clothing come up to them to talk. The ads close with the jingle, "Bacardi and Cola. They get the job done."

"It's so over the top," gushed the chief creative officer of David and Goliath, the creative force behind the ads. "If you go back to Tom Selleck and Matt Houston days with their large cellular phone, women with exposed cleavage and guys with the big mustaches, you look at it and laugh." We didn't. And we weren't the only ones. Only twenty-one percent of those polled for the USAToday's Ad Track say they like the ad, about average for advertising today according to the USAToday. Bear in mind that the fact that on average 20% of people like a spot is hardly a reflection of commercial greatness—it means the vast majority of folks are indifferent or feel negatively towards it! In the case of Bacardi, more Americans (19%) than average (13%) told USAToday's Ad Track they disliked the ad, with 28% of women reporting a dislike.

The campaign doesn't entertain and it doesn't educate—there's no mention of why to ask for Bacardi instead of just rum. While there is some indication that perhaps Bacardi has realized the dangerous path its trodden down—just days ago it announced that it was consolidating advertising with Y&R, leaving David and Goliath behind—we still say, Mr. Shaw, you were so right.

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Sponsorships and events are one of the biggest beneficiaries of the mass migration away from traditional media. According to Sponsorclick, a sponsorship marketing consulting company, sponsorships are the fastest growing marketing and media channel with spending topping $43.1 billion in 2005 and forecasted to top $48 billion in 2006. Media pundit Jack Myers' Jack Myers Report projected spending on event marketing would increase by 12% in 2005 to $93.5 billion. What's strange about all the spending is that companies have no more of a clue what they're getting from sponsorships and events than they had with television 50 years ago.

According to SponsorClick, 60 percent of marketers are not satisfied with their current tools for measuring the ROI of sponsorship dollars. The Association of National Advertisers reported that 56 percent of marketers report serious challenges in measuring the impact of sponsorships and events. There's little to no factual evidence to support their case that sponsorships and events will yield a relative ROI higher than traditional media options; marketers just have faith that it will turn out to be true.

Despite their machinations, we're not entirely sure most marketers are really all that comfortable or confident in the power of their faith to overcome the, let's face it, incredible odds that sponsorships and events ranging from high profile, broadly appealing, international sporting events such as the Summer Olympics to the upscale, lower-key Sundance film festival to regional or local events will actually yield greater return for the brand in terms of sales, brand and customer equity than, say, TV advertising, even in it's current state of decline. We know CEOs and CFOs sure aren't. Luckily, the days of faith-based media selection, at least as far as sponsorships and events are concerned, are coming to an end.

Companies generally have a list of questions about sponsorship and event options they want to answer including what are/will/did we get out of this sponsorship and how can we improve performance? Up until now, most companies have been content with generating numbers about people exposed to a sponsorship or event, but these numbers are little better than the circulation figures for a magazine or newspaper or total audience reached for a TV buy. They offer marketers little if any information about the short- and long-term effects of a sponsorship, or any insights into how it's working. For instance, is awareness translating to brand preference, and if not, why not?

There are several types of research companies can do that go miles beyond reporting "circulation" type data:

Pre-testing. To screen different sponsorship ideas, respondents are exposed to a sponsorship concept, just as they might be in a pre-test of a new product or service, and asked questions about the event, the sponsoring brand, and brand preferences.

Short-term ROI Measurement (sales). If a sponsorship is big enough and can be measured within a defined geography (e.g., Dunkin' Donuts sponsorship of the New England Patriots), a company can measure the effect on sales to gauge short-term effects of the sponsorship on the brand in general, compare the relative ROI of sponsorships in terms of sales other forms of marketing mix elements (TV, magazine, promotions, etc.), and understand the interactions between sponsorship activitation (a.k.a., the advertising that promotes the brand's relationship to the sponsorship) and other marketing investments. A company might discover, for instance, that print advertising, particularly in magazines, complements the performance of sponsorship-related advertising.

Long-term ROI Measurement (Brand and Customer Equity). Research that assesses brand and customer equity can offer insights into the long-term impact of a sponsorship on the brand and continuous tracking research could measure the effects of sponsorship in the context of overall marketing effects

Pre-post tracking research. Companies can further assess the impact of a sponsorship or event along what we and others refer to as the "hierarchy of effects." A chain of events occurs after buyers are exposed to marketing communications. In a perfect world, buyers become aware of an event—a NASCAR race or film festival, for example. Next, they become aware of a brand's involvement followed by awareness of the message the brand communicates at/through the event. Their perceptions and attitudes are then positively impacted by the message and, finally, their preference for the brand and intention to purchase improve. But the world isn't perfect and very often there are missing links in the chain. By pinpointing where problems—be they major or minor—have occurred a company can understand why performance isn't what they had hoped for and how to address the problem. If "hierarchy of effects" research incorporates individual-level GRPs, then companies could chart whether the timing of advertising promoting the sponsorship coincides appropriately with the event (i.e., does ad campaign performance peak when it needs to) and evaluate the effectiveness of each element of the communications mix in reaching and influencing the target market.

These research options could be applied before, during, and after a sponsorship or event has run, depending on the availability of sales and tracking data. The type of research is dictated more by the size of the sponsorship, a company's budget, and availability of existing sales and tracking data than by lack of readily available research tools. Clearly, faith-based media selection has a fact-based counterpart that will quickly capture the attention of apprehensive marketers.

For more on the sponsorship evaluation services offered by Copernicus and its sister firm MMA, click here.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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Google fascinates us. We use it constantly, we read about it all the time. We find the Google-lead explosion of paid search—a business which has gone from $0 to $4 billion in five years—incredible. So we eagerly picked up a copy of The Search, written by tech industry insider John Battelle, founder of the now defunct but very much missed Industry Standard and one of the original editors of Wired. He shares our interest in the company and moves well beyond the walls of Google's corporate headquarters to talk about rivals and expound on the future of the web.

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We hope we're not wrong in assuming that in the waning weeks of 2005, many of you have already transitioned to a 2006 calendar. If you haven't, go out and buy one. It's time to start thinking about your professional development efforts in the year ahead and the conferences you should attend to help advance your career. For your consideration, here is preliminary information about three events where Copernicus' own Kevin Clancy will speak:

5th Annual Six Sigma for Sales and Marketing
Presented by IQPC
The Venetian, Las Vegas, Nevada
March 28 & 29

2nd Annual Senior-Marketing Executives Roundtable, Linking Marketing to the Bottom Line
Presented by The Conference Board
InterContinental, The Barclay
New York, New York
April 5 & 6, 2006

2nd Annual Senior-Marketing Executives Roundtable, Linking Marketing to the Bottom Line
Presented by The Conference Board
The Westin River North, Chicago, Illinois
May 16 & 17, 2006

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