Market Segmentation

Market Segmentation

The process of dividing a potential market into distinct subsets of consumers and selecting one or more segments as a target market to be reached with a distinct marketing mix.

Three Phases of Marketing Strategy
‡ Phase 1: Market Segmentation ‡ Phase 2: Target Market and Marketing Mix Selection ‡ Phase 3: Product/Brand Positioning

and nutrition ‡ Price conscious ‡ Work part-time over summer ‡ Value leisure time ‡ Family income $30.000 .Table 3.1: Sodexho¶s Segmentation of College-age Eating Patterns Star Gazers ‡ Light. out-going ‡ Family income > 100. taste.000 Fun Express ‡ Variety.60.000 . healthy foods ‡ Price insensitive ‡ Brand conscious ‡ Employed full-time over summer ‡ Active.

³Best´ Customer Segmentation High High Consumption Current Share Low Hi-Highs (stroke) Low-Highs (chase) Low Hi-Lows (tickle) Lo-Lows (starve) .

g.g. Centrum) ‡ Designed to guide the repositioning of a product (e.g..Segmentation Studies ‡ Designed to discover the needs and wants of specific groups of consumers in order to develop specialized products to satisfy specific group needs (e.. People and Teen People) . Nintendo) ‡ Used to identify the most appropriate media for advertising (e..

Bases for Segmentation ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Geographic Segmentation Demographic Segmentation Psychological Segmentation Psychographic Segmentation Sociocultural Segmentation Use-Related Segmentation Usage-Situation Segmentation Benefit Segmentation Hybrid Segmentation Approaches .

$50.Table 3. Mountain States. high school graduate. humid. $100. postgraduate Professional. college graduate. widowed Under $25. $35. some college. 50-64. female Single.000.000-$34.000-$99. small cities. rainy Under 11. suburban. 75-99. $25. divorced. white-collar.999. Alaska. towns Urban. rural Temperate. blue-collar. agricultural. living together.000 and over Some high school. hot.999.000-$49. married. 18-34. $75. 35-49.000-$74.999. Hawaii Major metropolitan areas. 100+ Male.999. military .2 Market Segmentation SEGMENTATION BASE Geographic Segmentation Region City Size Density of area Climate Demographic Segmentation Age Sex Marital status Income Education Occupation SELECTED SEGMENTATION VARIABLES Southwest. 65-74. exurban. 12-17.

outdoors enthusiasts. couch potatoes. full nesters. safety. young married. empty nesters . security.2. Mexican. continued SEGMENTATION BASE Psychological Segmentation Needs-motivation Personality Perception Learning-involvement Attitudes Psychographic (Lifestyle) Segmentation Sociocultural Segmentation Cultures Religion Subcultures (Race/ethnic) Social class Family life cycle SELECTED SEGMENTATION VARIABLES Shelter. moderate-risk. Italian. Chinese. Hispanic Lower. upper Bachelors. high-risk Low-involvement. aggressives. other African-American.Table 3. Caucasian. Protestant. Jewish. negative attitude Economy-minded. novelty seeker. affection. middle. status seekers American. Moslem. sense of self-worth Extroverts. low dogmatics Low-risk. French. high-involvement Positive attitude. Asian. Pakistani Catholic.

maker. family members. work. achievement Home. work. strong Leisure. economy. rush. value-for-the-money Combination of demographic and psychographic profiles of consumer segments profiles ³Money and Brains. aware. friends. boss. enthusiastic None. some. achiever. snack. medium users. fun.´ ³Old Yankee Rows. believer. long lasting. friend¶s home. gift. experiencer.´ ³Black Enterprise. struggler . peers Convenience. light users. interested. striver.´ ³Downtown Dixie-Style´ Actualizer.SEGMENTATION BASE Use-Related Segmentation Usage rate Awareness status Brand loyalty Use-Situation Segmentation Time Objective Location Person Benefit Segmentation Hybrid Segmentation Demographic/ Psychographics Geodemographics SRI VALSTM SELECTED SEGMENTATION VARIABLES Heavy users. fulfilled. non users Unaware. morning. social acceptance. night Personal. in-store Self.

state. region. or city).g.. .Geographic Segmentation The division of a total potential market into smaller subgroups on the basis of geographic variables (e.

and Occupation . Education.Demographic Segmentation ‡ ‡ ‡ ‡ Age Sex Marital Status Income.

Mid-life explosion ± Second Adulthood ‡ Settling Down. Retirement . Mellowing.Age: Segmentation by Age Effects and Cohort Effects ‡ Seven Life Development Stages (Table 3. Questions/questions.3) ± Provisional Adulthood ‡ Pulling up roots ± First Adulthood ‡ Reaching out.

Marital Status ‡ Households as a consuming unit ± Singles ± Divorced ± Single parents ± Dual-income married .

Psychological Segmentation ‡ ‡ ‡ ‡ ‡ Motivations Personality Perceptions Learning Attitudes .

AIOs Psychographic (lifestyle) variables that focus on activities. and opinions. interests. .

Table 3.6 Excerpts from AIO Inventory Instructions: Please read each statement and place an ³x´ in the box that best indicates how strongly you ³agree´ or ³disagree´ with the statement. sometimes just too fast. If I could consider the ³pluses´ and ³minuses. but I often don¶t [1] [2] [3] [4] [5] [6] [7] have the time to take advantage of them. I feel that my life is moving faster and faster.´ technology has been good for me. Given my lifestyle. Agree Completely Disagree Completely [1] [2] [3] [4] [5] [6] [7] [1] [2] [3] [4] [5] [6] [7] [1] [2] [3] [4] [5] [6] [7] [1] [2] [3] [4] [5] [6] [7] I like the benefits of the Internet. I have more of a shortage of time than money. I find that I have to pull myself away from e-mail. .

Table 3.7 A Hypothetical Psychographic Profile of the Techno-Road-Warrior ‡Sends and/or receives 15 or more e-mail messages a week ‡Regularly visits Web sites to gather information and/or to comparison shop ‡Often buys personal items via 800 numbers and/or over the Internet ‡May trade stocks and/or make travel reservations over the Internet ‡Earns $100.000 or more a year .

Figure 3.1 Centrum Targets Lifestyle .

Sociocultural Segmentation ‡ Family Life Cycle ‡ Social Class ‡ Culture. Subculture. and Cross-Culture .

income. family status ‡ Implicit basis: age. employment .Family Life Cycle ‡ Phases a family goes through in their formation. and final dissolution ± Bachelorhood ± Honeymooners ± Parenthood ± Post-parenthood ± Dissolution ‡ Explicit basis: marital status. growth.

Use-Related Segmentation ‡ Rate of Usage ± Heavy vs. Unaware ‡ Brand Loyalty ± Brand Loyal vs. Light ‡ Awareness Status ± Aware vs. Brand Switchers .

2 Campbell¶s Seeks to Create Awareness and Interest .Figure 3.

± I always buy my wife flowers on Valentine¶s Day. we always take her out to dinner. gets a raise.Usage-Situation Segmentation ‡ Segmenting on the basis of special occasions or situations ‡ Example Statements: ± Whenever our daughter. ± When I¶m away on business. Jamie. I try to stay at a suites hotel. .

Figure 3.3 Ad Designed to Spell Out Rewards of Consumer Loyalty .

4 OccasionSpecific Ad .Figure 3.

Benefit Segmentation ‡ Segmenting on the basis of the most important and meaningful benefit ± Prudential .financial security ± Iomega .data protection ± Wheaties .fresh breath .good health ± Eclipse .

Figure 3.5 Ad Offering Combined Benefits .

Hybrid Segmentation Approaches ‡ Psychographic-Demographic Profiles ‡ Geodemographic Segmentation ‡ SRI Consulting¶s Values and Lifestyle System (VALSTM) .

3 36.000 Men Professionals/ Managers Age 35-49 Household income >$100.5 25.0 55.593.8 Demographic-Psychographic Profile of Newsweek ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Total adult readers 19.0 12.Table 3.000 Married Own laptop PC Spent $3000+ on vacation last year % Index 100.4 12.3 100 117 174 114 172 109 150 164 .1 62.9 35.

Online.9 Demographic-Psychographic Internet Shopping Styles ‡ ‡ ‡ ‡ ‡ ‡ E-bivalent Newbies Time-Sensitive Materialists Clicks & Mortar Hooked. & Single Hunter-Gatherers Brand Loyalists .Table 3.

6 Targeting An Active Lifestyle .Figure 3.

S.S. fashion magazines play golf . 55-64 ‡ Country club members. drink imported beer.1% of U. 25-34 ‡ 35-44. ‡ Yuppies.8% of U. households ‡ 1. read own mutual phones.10 Sample Claritas Geodemographic Clusters Blue Blood Estates Young Influentials ‡ . households ‡ Professional ‡ Professional ‡ Elite super-rich ‡ College graduate ‡ College graduate ‡ Under 24. 45-54.Table 3.

Figure 3.8 VALS ACTUALIZERS High Resources Principle Oriented Status Oriented Action Oriented FULFILLEDS ACHIEVERS EXPERIENCERS BELIEVERS STRIVERS MAKERS STRUGGLERS Low Resources .

Figure 3. Actualizers periencers Ac ie ers a ers Ful illeds Stri ers Belie ers Strugglers 0 2 4 8 10 12 14 ountain/roc clim ing Jet s iing/ a e running/ ater i ing nline s ating .9 VALS 2 Segments and Participation in Selected Sports Percent o adults in eac VALS 2 t pe o participated in selected sports in 1995.

7 11.5 17.5 . Si e of VALS Segment as Percent of U.7% 10. Population VALSTM SEGMENT Actualizer Fulfilled Believer Achiever Striver Experiencer Maker Struggler PERCENT OF POPULATION 11.8 12.Table 3.S.9 12.0 14.0 9.

Mindbase Segmentation ‡ Monitor Mindbase based on Yankelovich¶s Monitor Survey of American Values and Attitudes ‡ Table 3.12 .

12 Eight Major Mindbase Segments ‡ ‡ ‡ ‡ Up and Comers Young Materialists Stressed by Life New Traditionalists ‡ ‡ ‡ ‡ Family Limited Detached Introverts Renaissance Elders Retired from Life .Table 3.

Criteria For Effective Targeting of Market Segments ‡ ‡ ‡ ‡ Identification Sufficiency Stability Accessibility .

Sign up to vote on this title
UsefulNot useful