Unpainted Arizona: A New Segmentation Model

Phone-Makers Should Take a Few Lessons from Hollywood

How do you think the mobile industry feels after investing so much time and money developing consumer segmentation models only to have Apple pretty much own all the value in the market with a single product?

For about four years now?

Yesterday I listened to one of our clients describe a segmentation model. It was simple and sensible. It also produced essentially the same four or five profiles that fall out of most market segment models I’ve seen in the consumer-facing technology sector. This particular company kept its segment names simple, like “people who do X”. This is good and bad. Good because clearer is usually better. Bad because the segments didn’t betray their pseudo-scientific roots with silly, unnecessarily complicated names. Where, I thought, were the “razor’s edge techno-trendsetters” or the “mobile minivan mall mavens”?

Before I go on, I’d like to ask everyone who chooses these silly labels to try a bit harder. Some of them are truly cringe-worthy. So if you’re going to go that route, you should do us the courtesy of being creative. Maybe try to sneak in some inappropriate references. Or gross us out a bit. “Hairy-backed mouth-breathing gamer girls”, anyone? Come on. Have some fun with it.

Speakers at my meeting yesterday explained that they would use the segments they’d identified to inform their product development and marketing activities. Sounds like a good idea, right? Surely it’s a smart and noble thing to let the “voice of the consumer” lead your product strategy. Or is it?

In 2008, when the mobile world was very different, I heard about Nokia’s global consumer survey. It was, and perhaps still is, a world-beating database with a zillion data points spanning years and years. It held the keys to the human psychograph, or so it seemed. Its data was distilled into distinct market segments onto which Nokia’s extensive product portfolio was mapped. It was a brilliant strategic tool for Nokia, or so it was argued. No other phone-maker could touch it.

I remember naively suggesting to one of Nokia’s competitors in the US that it should segment more aggressively. I was gently but firmly reminded that the company did indeed have a broad portfolio, but its best intentions were compromised by operators, which only offered three retail price points. That number is now closer to one. It’s all about the 4 “P”s of marketing (product, price, promotion and place), and Apple controls all of them.

Now I’m going to risk grossly oversimplifying a massively complex set of inter-related technical, social, business, and other issues that got us to where we are today. I don’t like it either, but I can get away with it here because this is a blog posting.

What has segmentation done for the mobile device market lately? The guys who are doing the winning these days don’t appear to want to get too clever about it — if they care about segmentation at all.

We’ve been cautioning phone-makers for some time about the growing degree of homogeneity in handset designs. Let’s consider Samsung and HTC, by far the healthiest of the major global manufacturers. I use the term “manufacturer” deliberately. HTC has its Watch, Play, and Listen services and Samsung has its Media Hub. But these are nascent. For now, they live and die on hardware. If you’re bored, geeky, both, or genuinely interested, try this three-step test:

  1. Take a side-by-side look at HTC’s portfolio
  2. Take out the two models with Facebook buttons, neither of which are doing that well
  3. Now write a 5,000-word comparative analysis of the handsets’ designs

Good luck.

Samsung has a much broader portfolio than HTC, of course. But I’d argue it can attribute much of its recent success to its fantastically executed Galaxy S II, the industry’s (one and only) “killer” halo product.

And this wouldn’t be a proper blog without an Apple reference, so…

I don’t think that Apple thinks about its products in terms of consumer segments. Rather, it seems to think in terms of product segments. Apple tells us what we want (after it has invented it of course), and makes markets for its hardware, creating demand in spaces where others see thin air. Apple is fundamentally a platform company — a kind of formula. You’re likely to be proven delusional if you believe you can compete with them on products or services alone.

There’s a scene in the cult comedy film Raising Arizona in which an FBI agent is interviewing Nathan Arizona, ably played by the late Trey Wilson. Nathan Arizona is the irascible, fast-talking proprietor of Unpainted Arizona, a chain of furniture stores in the US southwest whose wares are uncontaminated by paint. The agent asks Arizona whether he has any disgruntled employees, to which he responds, “Hell, they’re all disgruntled. My motto is ‘Do it my way or watch your butt!'” I reckon Arizona’s unvarnished management philosophy carries straight over to his unpainted consumer product and service philosophy. He’s the Coen brothers’ version of a modern-day Henry Ford. Personally, I can’t help but conjure that scene in my mind’s eye when Apple launches a new product.

That may have been tough, but if you like the idea, you should also check out Tom Cruise’s Les Grossman character in Tropic Thunder. He stems from a similar concept, but taken to outrageous extremes.

So what’s the lesson? Of course, listening to your customers is a good idea. It may even help. But it’s not clear to me that the voice of the consumer has fed into products and services in a way that has made any markets lately. Don’t be afraid to get prescriptive. Do it with a bit of swagger. And maybe take a cue from Nathan Arizona, Les Grossman, or Steve Jobs on how to handle critics and other stuff that doesn’t quite fall your way.