So the topic today is segmentation and actually we're going to do segmentation in two pieces. The first piece has to do with how your population that you've identified as a target for your offering is broken down into fragments. And it's like playing a game of cards, you tilt a hand and you have to decide how you're going to play that hand. So you can't change the hand that you dealt, that's the fragments and the segments in the market that you basically receive. And then the second part is how do I play the hand. And that's how do I select which segments I'm going to serve, and in what order. So the first part is identifying what the important market segments are. And we'll spend time on thinking it through, illustrate how this is done, and end up with some pretty good idea of how the market is fragmented. Segmenting is a tough exercise. Your problem is that you have few hard data to analyze. Your problem is that you, out in the marketplaces, you start this enterprise, and it's only as you get into it, that the true segments begin to emerge. But you need to think a little bit about how this market, or this population that you're going to serve is going to break up into different parts or different fragments, because those fragments will require different kinds of treatment. So for instance, just to keep it simple, you might have a population comprising something as elementary as you have men and you have women in the population. And the men and the women need to be treated differently, because they have just kind of different characteristics that require attention. So the issue then is why segment? Why go through the process of segmentation? And your problem is that you're taking it a really difficult problem, and you're going into a highly uncertain market. It hasn't been there before. And life is going to be difficult enough if you go into the market without stacking the odds against you by doing some preliminary analysis and thinking about what are these underlying segments. Maybe, what you want to do is find an easier path that you can get down early and get traction as soon as possible because what that will do is firstly allow you to test your ideas. And secondly, demonstrate to the world out there as you might progress down those easier path that you in fact have and are something that's worth while. So the idea is to try to find a seed segment that promotes early demountable that we can feel confident or more confident that if we go down that road in the beginning, we'll be able to show some results. When it comes to segmentation, the're two basic ways in which groups or beneficiaries might be fragmented. Firstly, is accessibility. What are the factors that make them more accessible to your offering, make them more and more able to be able to participate and experience your offering. The second one has to do with acceptability and that is if I bring this offering to them, to what extent are they going to be willing and able to experience that intervention? And there're a number of ways of looking at and braking down accessibility and acceptability that will end up generating a list of things to look at and look for as you begin to think about how is my particular population that's the target of my enterprise going to break up. So let's have a look at Transactional Accessibility. These are differences in the segment's ability to receive the benefit or your ability to deliver the benefit to that segment. So the first one is what we call Geographic. Are our targeted population in the rural, peri-urban or urban. Are we going to densely populated or lightly populated areas? Are the population we are going to living in forests or deserts or mountains or plains. So one of the things that won't happen is because of the geographic configuration of your market, they might break up very differently. So for instance, in the Ikotoilet case, which we'll be discussing, the person who was trying to create this enterprise was going to try to build toilets for people to use in places of the kind of primitive facilities that people were using at that time. And what you can see very quickly is that your ability and accessibility of people in the slums are going to be very different from people that are living in towns. And so the way that he approached the launch of that business was to focus in first on towns and not on the slums. Because the slums are so much more difficult to access and so much more difficult for the slum dwellers to access his toilet system. A little bit more complicated, but just as important, is what we call infrastructural accessibility. And that's basically looking at the different conditions which will enhance or inhibit the deliverability of the benefit. Do we have adequate transportation systems? Do we have adequate telecommunications systems? Do we have adequate educational systems and medical services? So for instance one of the enterprises that we've looked at was a women that was trying to build maternity clinic in Senegal. And the fundamental program was that many of the people who would be giving birth in that clinic had to be brought there. And sometimes, I mean, believe it or not, one woman was brought 20 miles on a wheelbarrow while in labor because of the inadequacy of the transportation system. So inadequate transportation could be a very important way of dividing up your population and serving that population. Another one, once again a fancy word but it captures the idea is what we call socioeconomic accessibility. All the features or characteristics of this population that increase accessibility depending on their income, depending their socioeconomic category, depending on their age, depending on their gender. For instance in the education system in many developing economies, girls simply can't go to school during their menstruation period. There's just not the facilities to handle that. So what you find is that young girls entering into puberty and post-puberty are a huge disadvantaged because one week in about four to five, they can't be at school. And that needs to be taken into account. It's broken down socioeconomically that women in those societies are expected to just stay at home. Another one is cultural accessibility, or the religious or racial or tribal or customs or habits that people execute. And basically here in one of the projects we look at in Bangladesh, they were trying to deliver water, clean water to the population. And the initial assumption that women would be allowed to come down and buy water at the store, was completely invalidated by the fact that in many of the smaller towns and villages in Bangladesh, women are to stay inside their house unless they were accompanied by a man. So this religious mification takes place if we can't sell to women unless we sell to them at their home or they brought down with a man to the location. Another one is what we call technical accessibility. And that is are there reasons why a particular segment of the population does not have technical access to the service you're delivering. Many projects today depend on accessibility on mobile phones but if you go for instance to the further lands of Rio De Janeiro, the fact that kids can't get pencils stops you from doing any, a number of educational activities. Just a lack of access to something as simple as pencil and paper influences your ability to get out there and help the target population that you wish to help. Governance accessibility is another one. All the different governance factors that prevent segments of the market from being able to participate, so sometimes it might be political party membership. You won't be able to have access to people who are on part of the in political group, or suffrage differences, or simply differences in what's allowed and what's not allowed. Any project, for instance Saudi Arabia that requires women to drive. Forget about it, women are not allowed to drive in Saudi Arabia. Another one is the difference in what we call competitive proximity. How easily can these beneficiaries get alternative sort of access to the services you're trying to provide. Is there somebody right on your doorstep who's doing much the same as you're doing? Or is there no one there? And witness the problem in the United States today of homeless shelters. In some places there's a lot of homeless shelters that are providing kind of duplicate services. And the other places where we're just desperately short of places for the homeless to go. Particularly homeless abused women. Yet another is the level of distress that people are experiencing. If the people are suffering, is there kind of pockets of people that are suffering very intensely. And others where it's somewhat less intense or is it a situation where the same distresses absorbed by everybody. And this is a tough one because sometimes what happens is that the people that are in the last stages of need are the ones that consume the most resources. And it's not going to help them much anyway. So those resources might better be spent elsewhere to people less further down say the road of suffering. Now this is being a big problem for instance in Botswana where we had massive incidence of AIDS a decade ago. And many, many AIDS sufferers would come to clinics looking for assistance and they were just too many people and not enough medicines. And so the people running the clinics had to make basically triage decisions as to, there's no point in providing drugs to the people who are nearly dead. We should rather consider those drugs for the people who are better off, so this ain't fun but it's a reality. So we've spoken about accessibility, the other one we have, mercifully, a somewhat shorter list, is acceptability. So the first question to ask is are there differences in a degree to which people appreciate the benefit that you're trying to offer them. In KwaZulu-Natal, for instance, in South Africa they handed out free condoms to the women in the villages in the hope that they would be able to persuade their husbands to use condoms. And to persuade their boyfriends to use condoms. And basically this was tantamount to giving out condoms to be thrown away. Because the men simply refused to use them. So they didn't appreciate the benefit and therefore all that money went to waste. Another thing to look at in acceptability is what we call consent requirements. And that is, if I deliver the service, will they be allowed to receive that service? So an interesting example here would be even in the United States the operation of abortion clinics is going to be basically sanctioned or not sanctioned by parents whose daughters might want to go for an abortion in one of these clinics. They have to get permission, and they may not get permission. Another acceptability issue is can they afford it? Can they afford to spend the resources that are needed to receive that service? Sometimes it's not just funds that you have to worry about but what we call disposable time. Many people have to spend a huge amount of their time carrying wood, carrying water, cooking, laundering. And all that time cannot then be used to go and receive those services that are desired. So it's not just case of affordability of money but also affordability of time. And then the last one is a subtle on but a really important one and that is does the population break up along dimensions of what we call locus of control. Some people feel that it's in the lap of the gods. It's up to the gods whether I suffer or not I can do nothing. Other people feel, people who have a high internal locus of control, feel that something can be done about it and are willing to go through the effort of trying to have their problem resolved. So we've gone through this almost endless list of possible factors now. The key thing here, is you came to have every factor kick in, and fragment your mark of deal end up with an impossible array of different segments. What you're looking for is, the two or three really important factors, that are going to divide up your segments, and kind of put pressure on you to deliver that segments, in a way that segment specific. So the idea here with the project is to work through the list that we've generated, that long list of different kinds of factors. Identify any factors that you think will substantively influence the acceptance or access of that sector. And you try to reduce that list to the top three factors. As you work through the list, you also need to try and identify places where a segment which you've identified poses a particular challenge. And begin to think about it if you can identify any remedies that you can use to counter the challenges that are posed by that segment. So as we get to the end of this list, and hopefully we haven't identified too many factors, this gets us to the end of part one. And with part one, what we've done is identify how many segments they are out there and what they look like. Part two, now moves to how do I select from those many segments from the hand that I've been dealt. The segments where I'm going to first attack, and the segments where eventually I might decide not to attend to them at all. And that is the challenge of part two of segmentation, which is how do I play the hand that I've been dealt.
