Segmentation

The Ahwahnee holds the secret of Capitalism

One time I made the mistake of equating sales and marketing and my girlfriend’s dad conspiratorially pulled me aside and shared this differentiation:

Marketing makes the guns, Sales fires them.

I didn’t think much of it at the time, I just wanted to hang out with his daughter. But in retrospect, he was right on; marketing is strategy, sales is execution.

Build a better mousetrap, and marketing determines if anyone finds it — or buys it.

Later I took some marketing classes. We covered the 3Ps: Product, Price and Place. The first two are self explanatory, the third includes stuff like supply chain, distribution, delivery.

But it was only much later that I learned the ultimate secret to marketing and the pillar of capitalism, and it’s Segmentation.

Segmentation takes your mousetrap and positions it across different markets be they demographic, geographic or behavioral, targeting each group individually.

All customers are decidedly not equal.

If you can only pick one group to sell to, eat the rich. They aren’t price sensitive. They want experiences, they want prestige and for that, they’ll pay.

If you want to sell a ton, you need to market to everyone else — smaller profit margin sure, but more unit sales means more money.

Segmentation lets you cover both extremes and everything in between. A Toyota Corolla will get you to the grocery store just as good as a Lexus. However, the Corolla is $20K, the Lexus $150K. Toyota sells a million Corollas every year for a bit of money, they only sell thousands of the fanciest Lexus, but they make a lot more money on each.

While you’re at the store you’ll find tons more product segmentation like an entire aisle of breakfast cereals, each one branded, targeted and priced for a different demographic, while made from the same five ingredients and by the same two companies.

We are constantly being sold to, and now, with the granular targeting ecommerce and social media makes possible, ever more efficiently.

Last week I was eating a burger in the Ahwahnee, Yosemite’s grand hotel.

Why is this place even here?

Ahwahnee burger view. Originally there was a woman across from this man, but she was blocking the view, so I used Nano Banana (Googles latest AI) to get rid of her. See the little SynthID watermark in the corner?

My first experience at the Ahwahnee wasn’t even in Yosemite, it was in Disneyland. Why bother with Yosemite when you can stay in the reproduction for a $1,000 a night with a direct entrance to Disneyland?

I was there for a conference and we sprung for the Princess Breakfast with R, only to have her absolutely terrified by a visit from Snow White. She ended up under the table¹. Today’s rate for the princess breakfast is $150 a head.

Disney knows segmentation. Disney and the Decline of America’s Middle Class

This article covers the struggles and financial burden of one Grandma’s heroic attempt to take her family on a once-in-a-lifetime trip to Disneyland, versus a Silicon Valley Dad’s experience taking his daughter. Disneyland was a big part of my childhood in LA (E-Ticket!), so this growing rift between privilege and paycheck hits hard.

The author nails how Disney has honed segmentation to a point where experiences for normal folk are increasingly diminished or plain out of reach — all to grab ever more dollars across the broadening class divide.

In the 1920’s, Stephen Tyng Mather, the first director of the National Park Service, pushed for the construction of the Ahwahnee. Segmentation. He knew bringing wealth into the valley would be good for the park and pull tourists in who might otherwise go to one of the grand Alpine lodges in Europe.

But the NPS isn’t Disney, and as I wrote earlier this week, Yosemite and the real Ahwahnee try hard accommodate everyone. Skip the car — for $20 a big purple YARTS bus will get you in from every road that enters the park.

When the valley bus pulled up at our stop to take us over to El Capitan, the driver yelled to stay clear as the wheelchair ramp extended like a red carpet for a lady wheeling her elderly mom off. They happily rolled away to checkout Yosemite Falls.

1. The other time we made it to Disneyland as a family, Chaos Monkey was now mobile too, and I thought I nailed it by getting a room with a separate bedroom for the kids, complete with princess bunk beds. I ended up sleeping in the teeny princess bunk while JFran and the kids piled into the King.