avatar_48x48
Contact BSI
Derrick Daye
888.706.5489 Email us
Brand Management

Segmenting The Market For Power And Profit

by

Segmenting The Market For Power And Profit

You’re either pregnant or you’re not. And the market for pregnancy testing kits would appear to be similarly dichotomous: you either need a pregnancy test kit, or you don’t. If you do, you buy one and it helps you answer the first question in the affirmative or in the negative.

So you’d think there’s not much to the market – not much market segmentation potential.

And yet…

The first level of segmentation is between the medical in-the-doctor’s-office kind of pregnancy tests, versus the at-home, end-user, self-administered test kits. In the 1990s, Quidel, a San Diego based company, held nearly an 80% share of the medical market for pregnancy testing kits, but only 18% of the consumer market.

To conquer the end-user market, Quidel could have taken its medical story of efficacy, accuracy, and speed to the consumer. You can picture the tv commercial: (baritone) “80 percent of doctors prefer the definitive results of Quidel’s test kits.”

Instead, they chose first to ask the seemingly obvious question “why do consumers buy pregnancy kits?”

The answer was surprisingly far from obvious.

It revealed two very different kinds of buyer of pregnancy kits: those who hopefully await a positive result, and those who anxiously wish for a negative one.

These two segments deserved to be served differently. So the product was launched differently for the two types of consumer: one for “the hopefuls” and another for “the fearfuls,” differentiated in name, packaging, pricing and in-store placement.

For the fearfuls the product was named “RapidVue,” it came in a plain white clinical pack design, priced at $6.99 and displayed near the condoms in the contraception aisle.

For the hopefuls, on the other hand, the company created a pretty pink box labeled “Babystart,” featuring a gurgling, rosy-cheeked infant, priced 50% higher at $9.99 and sold near the ovulation predictor kits.

It was a dramatically successful strategy for Quidel. A new way of segmenting the market was born.

Divide To Conquer

By splitting the market into two distinct segments, the company gains twice the shelf space, designs and delivers a product that is much more tailored to the customers’ needs, and throws competitors into disarray for a time if not creating a sustainable competitive advantage. While competitors scramble to figure out a response, Quidel gains market share in the consumer market.

So even when (especially when) the question seems unnecessary, ask why consumers buy.

Contributed to Branding Strategy Insider by: Niraj Dawar, Author of TILT: Shifting Your Strategy From Products To Customers

The Blake Project Can Help: Contact us for more on our segmentation research expertise.

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

FREE Publications And Resources For Marketers

Recommend this story

Subscribe, Follow and Stay Connected to BSI

Submit

Leave a Reply

Submit your comment