This two-in-one Viewpoint distils two of Professor Malcolm McDonald’s most critical marketing arguments: the continued necessity of needs-based market segmentation, and the distinctive nature of branding in service organisations. Both are essential for any organisation trying to build real customer value and commercial differentiation in a complex, digital, and often commoditised marketplace.
Part 1 – Needs-Based Market Segmentation
Despite waves of new media and changing consumer behaviours, needs-based segmentation remains the only reliable method for defining target markets, positioning offers, and maximising ROI.
- Segmentation is behavioural, not demographic — people don’t buy based on age or postcode
- Market definition must begin with needs — not with what we sell
- Most firms still get this wrong — segmenting by outdated, production-oriented variables
Key Model: Microsegments → Needs Clusters → Segment Prioritisation
Common example groups include:
- “Save my budget”
- “Radical thinkers”
- “Technical idealists”
- “Profit engineers”
Action Points
- Map the buying process across different actual behaviours
- Develop offers based on actual use patterns
- Adapt your communications to reflect behavioural insights
Part 2 – Service Brand Strategy
Service brands cannot rely on product-based branding models. Their value is derived from culture, consistency, and customer experience.
- Service brands are built bottom-up — not just through advertising
- People and processes ARE the brand in services like banking, law, consultancy
- Consistency across touchpoints is essential to build trust and loyalty
Action Points
- Audit consistency across all customer touchpoints
- Measure how much customers actually value your brand — beyond recall
- Ensure your employees believe in and live the brand values
Quote
“A service brand is based heavily on how the company does things — not just what it says.” – Professor Malcolm McDonald
Download the Full Viewpoint
This summary presents the dual argument — the full PDF includes needs cluster visualisation, behavioural mapping frameworks, and branding tips for service-based organisations.