http://www.cs.tut.fi/ihtehttp://www.cs.tut.fi/kurssit/IHTE-3100

HCProLecture 4 (17.1.2012):

Diffusion of innovation, user segmentation,user values and product targeting

Jarmo Palviainen

Lecture 4 contents

• Diffusion of innovation• Segmentations• User values directing design• Personas describin user types• Targeting and positioning products

Segmentations as basis for human centereddesign

• There’s no such product that would be targetedto all humankind

• Or is there?

• Product design and marketing should betargeted to user/customer groups that areknown

• User segment should be meaningfull for thepurpose of design/marketing.

• Eg. Old people vs. ”gray panthers”

Why segmentation is needed

• Users and consumers are different• Different basis for grouping them• Backgrounds, motivations, needs, wealth, lifestyle• Education, experience, culture, technology attitudes etc.

• Different people have different needs• latent & explicit• Targeting => “right product for right segment”

• Defining segments/target groups crucial for planning andrunning successful business

• Basis for product dev. & marketing• Defining business case• Strategic tool for

• following environment• Planning product portfolio

Meaningfull segmentation is basis for all product development

How technology spreads from early adopters to masses –innovation diffusion

LaggardsInnovators Early Majority34% 34%13.5% 16%2.5%

Late Majority

Leading edge Mainstream

CHASM (“KUILU”)

[Rogers, Moore]

IS-curve of innov. diffusionaika

omaksujat

EarlyAdopters

Varhaisetomaksujat

Varhais-enemmistö

VastahakoisetMyöhäisetomaksujat

Concepts of technology spreading

• One’s capability to adopt innovation (new idea, practice orproduct) depends on [Rogers]

• Relative advantage• Combatibility (experiences, values and needs)• Need for change• Triability• Observability

• Social Pressure• Treshold (kynnys)• Critical mass

• Trouble of not using is bigger than takinginnovation in use (also for laggards)

• See also: The Tipping Point: How LittleThings Can Make a Big Difference,Malcolm Gladwell,

How to make a technology product become amass product

• Some segments are faster adopters than the others• To Whom should you concentrate in product design and marketing

• Innovators and early adopters have positive attitudestowards tecnology

• Are they the main target group?

• Getting over the chasm requires e.g decent userexperience/usability

Properties for low threshold of adopting innovations[Rogers]

Socio economical• age (no clear affect)• Education, reading skills• Highs social status• Social status going up

Personality traits• Empathy• Less dogmatic (perhaps)• Ability to think abstractly• Rationality• Intelligence• Tolerance for uncertainty• Less fatalism• More ambition

Communication• Cocially participating more• More connections• More cosmopolit• Opinion leaders (depending on

the norms)

- G. Simmel: ”Strangers in their own community”- Homophily - heterophily

A bit more about diffusions: Bass’s model

Time

New

adop

ters

Innovators

Imitators

Summed

NetworksCritical massTakeoff -point

[Bass 1969]

Bass’s model

Time

New

adop

ters

Adopting based on mass media

Adopting based onpersonal interaction

Is Bass’s model valid still?

Segmentation categorization

General Product specificCan be noticed Cultural

GeographicalDemocraphicalSocio-economical

User StatusUsage frequencyBrand loyaltySituational

Can not benoticed

PsychographicalValue-basedPersonalityLife-style

PsychographicalProductpreferencesBenefits

Market Segmentation Conceptual and MethodologicalFoundations, Wedel and Kamakura, 2000

Good segmentation is…

• Meaningfull for the product group and for thecompany

• Possible to use in wide area• Different functions in the company• Partners, sub contractors• Market specific vs. global

• Descriptive names• ”Gray panther”, ”Mildred” = taistelunhaluinen äiti (USA/Statt),

”Fun Seekers” (global/Roper Reports Worldwide Survey 97)• Objective/verifiable, measurable, fine granalarity,

recognizability

• A Profile describes the typical features of asegment

Example one 1: Segmentation based ondemography and behaviour

• Demography• Family size: 1-2, 3-4, 5+• Life phase: Young, married, no kids, youngest kid <6, no kids, retired,

...• Profession: Technical, management, student, …• Other criteria: Income, education, living area, social class, ...

• Behaviour• User status: Non-user, ex, potential, first time, regular user• Expectations from the benefits: quality, speed, cheap price…• Usage patterns: random use, special occasions, regular use,…

[Kotler, p. 264]

What would be the demography for the targetgroups of these products?

Example 2: VALSTM (Values and Lifestyles)framework by SRI consulting (USA)

• Currently based on psychological traits• Developed in USA

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

”VALS™ is a marketing and consulting tool thathelps businesses worldwide develop and executemore effective strategies.”

”The system identifies current and futureopportunities by segmenting the consumermarketplace on the basis of the personality traitsthat drive consumer behavior.”

VALS framework

Primary Motivation• Ideals - knowledge andprinciples.• Achievement - demonstratesuccess to their peers.• Self-expression - desire socialor physical activity, variety,and risk.

Resources• Energy, self-confidence,intellectualism, novelty seeking,innovativeness, impulsiveness,leadership, and vanity.

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

VALS-survey - 31 multiple choise questionsThe first 8:

1. I am often interested in theories.Mostly disagree Somewhat disagree Somewhat agree Mostly agree

2. I like outrageous people and things.Mostly disagree Somewhat disagree Somewhat agree Mostly agree

3. I like a lot of variety in my life.Mostly disagree Somewhat disagree Somewhat agree Mostly agree

4. I love to make things I can use everyday.Mostly disagree Somewhat disagree Somewhat agree Mostly agree

5. I follow the latest trends and fashions.Mostly disagree Somewhat disagree Somewhat agree Mostly agree

6. Just as the Bible says, the world literally was created in six days.Mostly disagree Somewhat disagree Somewhat agree Mostly agree

7. I like being in charge of a group.Mostly disagree Somewhat disagree Somewhat agree Mostly agree

8. I like to learn about art, culture, and history.Mostly disagree Somewhat disagree Somewhat agree Mostly agree

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

VALS: Thinkers

“Thinkers are motivated by ideals. They aremature, satisfied, comfortable, and reflectivepeople who value order, knowledge, andresponsibility. They tend to be well educatedand actively seek out information in thedecision-making process. They are well-informed about world and national events andare alert to opportunities to broaden theirknowledge.

Thinkers have a moderate respect for the statusquo institutions of authority and social decorum,but are open to consider new ideas. Althoughtheir incomes allow them many choices,Thinkers are conservative, practical consumers;they look for durability, functionality, and valuein the products they buy.“

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

VALS: Makers

“Like Experiencers, Makers are motivated by self-expression. They express themselves andexperience the world by working on it - building ahouse, raising children, fixing a car, or canningvegetables - and have enough skill and energy tocarry out their projects successfully. Makers arepractical people who have constructive skills andvalue self-sufficiency. They live within a traditionalcontext of family, practical work, and physicalrecreation and have little interest in what liesoutside that context.

Makers are suspicious of new ideas and largeinstitutions such as big business. They arerespectful of government authority and organizedlabor, but resentful of government intrusion onindividual rights. They are unimpressed by materialpossessions other than those with a practical orfunctional purpose. Because they prefer value toluxury, they buy basic products.”

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

VALS: Applying it to design…

Let’s say you know the age group andtypical education of your target group.By using VALS you could decide which toemphasize:• Preference for:

• Control vs. freedom• Tradition vs. novelty• Information vs. stimulation• Hands-on activity vs. intellectual abstractions

Conclusions about segmentations in productdesign

• In the beginning of product design you need to define thetarget group thath will be partipicipated in the designprocess

• Or a sample of this group

• Demography does not tell much about product needs• Value and life style based segmentations give deeper

understanding about target group needs and desiresconcerning the product

• Selecting the target group is critical, both in studies and indesign

Company as a customer: segmentingcompanies

Company demography• Field• Size• Location

Operating variables• Technology used• User vs. no user –status• Size of the cust. need

Approaches to bying• Centralized vs. de-centralized

bying functions• Engineering / economy driven...• Bying criteria (e.g. quality, price)...

Situational factors• Busy or not• How largely is applied in the

company• Order size

Personal characteristics• ”buyer-seller similarity”• Attitude towards risk taking• Loyality

[Kotler; Bonoma&Shapiro, Segmenting the Industrial market, 1983]

End users as target groups in businesssystems

• Professsion• Education• Training for use• Computer skills• Age• ...

• Also the users in the companies are humans – psychography andother factors do not disappear in work context either!

• Attitude towards technology has big influence on productivity of work

Segmentations - conlusions

• Segmentations are shifting towardspsychography

• Segmentations change over time• Changin life-styles, values and attitudes

• Qualitative and quantitave data is needed• Segement sizes, income/bying potential, frequency of

bying etc.• Motivations, values, attitudes, life-style etc.

What values do the target groups have?

Personas for describing target groups(fi: persoona)

Persona concept is developed by Alan Cooper (Goal-Directed Design) :Cooper, A. (2003). About Face 2.0:The Essentials of Interaction Design, Wiley.

Personas describing a segment

Archetype/mode of a segmentHelp understand users goals, habits, motives and values

direct design decisionsPersonas help stakeholders to get a common view of the user

groups

Paulo JoséPaulo José has completed high school, is 37 year-old andis employed. He is not the leader of a team, but one of itsmembers.“I don't have patience to read pages to get to the point.I thought a little study would take me to the target.”“I don't have patience to try and learn the whole pieceright now, but I can see its value.”

[Aquino & Leite Figueiras, 2004]

[http://www.7nights.com/asterisk/sara_locke.gif](accessed on 1.2.2008)

Personas help in different stages of productdevelopment

• Communicating product ideas to stakeholders, e.g. uppermanagement

• Choosing functionality• Creating content• Prioritizing, e.g. based on user values• Evaluating product concepts nad prototypes

• Does this product fulfill the needs of the personas

• NOTE! Personas do not replace having real users involved inthe development

Article for lecture 4:

Differentiation in the cloud: methodology for integratingcustomer values in experience design, Andrey Sirotkin

et al, SEAA 2012http://www.cloudsoftwareprogram.org/theses-and-articles/i/28680/1570/differentiation-in-the-cloud-methodology-for-integrating-customer-values-in-

experience-design

30

27.1.2014

References

• Cockton, G. (2005). A development framework for Value-Centred Design. InProceedings of the CHI 2005 Extended Abstracts, ACM Press, pp. 1292-1295.

• Cockton, G. (2006). Designing worth is worth designing. In Proceedings ofNordiCHI Conference, ACM Press.

• Cooper, A. (2003). About Face 2.0: The Essentials of Interaction Design, Wiley.• Kujala, S. and Kauppinen, M. (2004). Identifying and Selecting Users for User-

Centered Design, Proceedings of NordiCHI’04.• Kotler, Marketing Management, 1999 (Millenium edition), Prentice Hall.• Moore, G. A. (1991) Crossing the Chasm. HarperBusiness, USA.• Plinio Thomaz Aquino Junior, Lucia Vilela Leite Filgueiras (2005). User modeling

with personas, Proceedings of the 2005 Latin American conference on Human-computer interaction CLIHC '05 Publisher: ACM Press

• Pruitt J. and Adlin T. (2006) The Persona Lifecycle: Keeping People in MindThroughout Product Design, Morgan Kaufman, San Francisco, CA.

• Rogers, E. M. (2003) Diffusion of Innovations, 5th edition, New York, USA, FreePress

• Ries, A. and Trout, J. (2001). Positioning, How to be seen and heard in theovercrowded marketplace, McGraw Hill.