Market Segmentation: How Much Choice is too Much Choice?

Today's class focused on better understanding market segmentation, targeting, and positioning differentiation (STPD).

Marketers believe that strong upfront research about consumers (which leads to segmentation which leads to targeting which ultimately leads to positioning differentiation) is one of the keys to marketing success. After thinking on a deeper level about the benefits of market segmentation however I ask myself... How much choice is too much choice?

 

"Market segmentation is based upon development on the demand side of the market and represents a rational and more precise adjustment of product and marketing effort to consumer or user requirements." (Smith 1956)

 

So basically (according to this definition) consumers today expect every need to be met and there is a constant need to adjust a product based on ever-changing demands. High demands to some would imply that we know exactly what we want. I think however that we know everything that we don't want and expect someone else to figure out the other parts for us. This has ultimately led to a smorgasbord of options and too much choice. I went to Staples recently and had a choice of 50+ new staplers (don't they all do the same thing?!)

After watching Barry Schwartz's TED Talk on "The Paradox of Choice" I would agree that consumer's high demands today are a vicious circle and no matter how hard we as marketers try to cluster, segment, target, position it will NEVER be good enough.   

 

http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice.html

A few points really hit home in this video...

1. High expectations are the root cause: high consumer expectations are the enemy.
2.  Consumers are no longer "pleasantly surprised": no matter how hard we try performance will be
     mediocre at best (mainly because of the high expectations).
3. High expectations lead to greater customer dissatisfaction: contrary to what we may believe about
    more choice giving us more freedom and ultimately more happiness the choice is overwhelming
    and shopping is often a daunting process today. We should all think minimalistic-ally
    (think of Apple's success).

One of the biggest downfalls of the human mind is that we are constantly seeking improvement. When will we decide that is enough is enough and reach a sense of "self actualization"? Lets all live a little more simply- the secret to happiness is low expectations!- well at least realizing that maybe things were better when they were worse and we could all experience a few "pleasant surprises."