MM: You can do that, yes. Which end you draw the market map from doesn’t really matter. The really important thing is to start segmenting both the end-user market and the population in each important junction box.

RTM: Don’t companies almost automatically segment these days?

MM: The best ones do. But many don’t. And nothing is more annoying than when people talk about unsegmented groups, such as, say, architects, farmers or high-net-worth individuals.

RTM: Why?

MM: Such things do not exist. Saying that all 150,000 farmers in the UK are the same is as useful as a bird of prey with a squint.

RTM: Yes, but segmentation is really difficult. And, having come up with segments, it is often extremely difficult to put each intermediary or consumer into the right box.

MM: No one ever said segmentation was easy.  Keeping fit is not easy. But you can do it if you put the effort in. Typically, particularly if they have a direct sales force, most suppliers can segment well.

“I am still constantly coming across clowns who want to segment their own database.”

Explain the concept, and a sales force can come up with a segmentation that makes perfect sense. I have never, ever failed to segment any market anywhere in the world.

RTM: And, having done the segmentation…?

MM: You can hone your offer to meet the specific needs of each segment. And what is truly extraordinary is that the segment that buys on price is never more than 10% of the market. I have been segmenting markets for 27 years and I have never seen a market where price is more than 10%, ever.

RTM: You mean companies worry too much about price?

MM: Absolutely. And if you compete on price you just become a pimply little me-too. All great companies know how to create demand-pull at high prices. Look at Kellogg, Intel, Heinz, Castrol GTX, Alfa Laval, SKF Bearings…..

“The classic value chain is still some idiot dumping it into the channel and hoping for the best.”

RTM: But haven’t large retailers become far more powerful? Hasn’t P&G now blamed the power of big retail for poor results?

MM: Maybe, but retailers still need the suppliers. And there doesn’t seem to be much wrong with Unilever’s numbers.  If you understand your market, you will be able to reach your end-users, no matter how many junctions you have blocking them.