Lean Six Sigma Meets Darwin and Market Segmentation

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y Gary A. Gack

Lean Six Sigma – like most things that continue to flourish – evolves. It grows, expands and adapts to fill new niches. Marketing professionals have identified evolutionary patterns common to many different products, services and markets – including Lean Six Sigma. Understanding these patterns is significant when considering purchase of Lean Six Sigma services and often when executing Black Belt or Green Belt projects.

Market Segmentation

Markets for products and services are not homogeneous – the needs and wants of individual consumers differ from those of corporations, governments are not the same as businesses, manufacturing concerns are different from banks or software companies.

Nearly all products and services begin life in a one-size-fits-all mode: Henry Ford offered his earliest autos in any color a customer wanted, so long as it was black. Six Sigma as initially conceived at Motorola was intended to be used in manufacturing. Over time, in response to varied customer demands, all products begin to differentiate in order to more closely meet specific requirements. Ford now produces minivans, SUVs, sports cars in a rainbow of colors. Six Sigma providers offer variations tailored for transactional applications, software development, information technology, continuous process industries, sales and marketing, and more.

Market segmentation takes many forms, including segmentation by industry (e.g., telecom, automotive, chemicals, healthcare), by function (e.g., finance, marketing and sales, software development, logistics), and by consumers, corporations or governmental units.

Significance for Different Six Sigma Users

Buyers of Lean Six Sigma Services: Segmentation of markets leads to product and service offerings that offer value propositions optimized to the needs of specific segments. In the realm of Six Sigma training, this leads to emphasis on tools, techniques and examples most relevant to the domain of use. A Lean Six Sigma course syllabus optimized for manufacturing application will differ significantly from one designed for a software development group. A syllabus designed for a bank's back office operations group will not be the same as one intended for the sales group. Many Six Sigma deployments have run aground on the shoals of one size fits all.

Significance for Belt Project Execution: Understanding the concept of market segmentation is essential to successful execution of many Six Sigma projects. In many instances the voice of the customer is really a chorus – baritones, tenors and sopranos – often with many off-key elements. Truly effective products or process improvement solutions rarely emerge from a one-size-fits-all mindset. Internal customers can often be segmented as well – e.g., management customers, finance customers, operations customers. All may interact with the same process, but may have quite different critical-to-quality requirements.

Product Positioning by Segment

Every organization, including Lean Six Sigma providers, benefits by developing an explicit product- or service-positioning strategy designed to address the needs of each market segment they are targeting. Buyers benefit because a range of options that can be matched to circumstances becomes available.

Organizations providing Lean Six Sigma training will typically concern themselves with attributes such as content, price, mode of delivery and value. The following table illustrates hypothetical (lots of room for argument here) positioning of several options for Lean Six Sigma training.

Hypothetical Positioning of Lean Six Sigma Training Options
	Web-Based	University Classroom-Based	Customer Site	Customer Site
Content	Undifferentiated	Undifferentiated	Undifferentiated	Differentiated
Price	Low	Mid	Mid to high	May be somewhat higher
Mode	Self-paced	Instructor-led	Instructor-led	Instructor-led
Value	Low	Mid for individual (receives scholastic credit); lower for corporate sponsor (typically certification project is not completed)	Mid for individual (may or may not give scholastic credit); higher for company (typically benefits from completed project)	Highest for both individual and sponsor (optimized to domain of use)

Market segmentation and product/service positioning are valuable concepts for everyone involved in Lean Six Sigma. A great many books have been written on these topics. A couple of good ones are Marketing Management by Philip Kotler and Positioning: The Battle for Your Mind by Al Ries and Jack Trout.

About the Author: Gary A. Gack is a founding partner of Six Sigma Advantage, based in Rockland, Massachusetts, USA. He has an MBA from the Wharton School and is an ASQ-certified software quality engineer and a Six Sigma Black Belt. During his 40-year career in the software and IT industry, he has managed a variety of large-scale software projects and has consulted with dozens of Fortune 1000 firms. Mr. Gack co-authored Six Sigma Advantage's Black Belt, Green Belt and foundation curricula. He can be reached at ggack@sixsigma-advantage.com.