Chapter

9
Identifying
Market Segments
and Targets

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 Bases for Segmenting Consumer
Markets
• Market segment
– A group of customers who share a similar set
of needs and wants

Geographic Demographic
segmentation segmentation

Psychographic Behavioral
segmentation segmentation

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 Geographic Segmentation
• Geographical units
– Nations, states, regions, counties, cities, or
neighborhoods
• Nielsen Claritas’ PRIZM
– Education and affluence
– Family life cycle
– Urbanization
– Race and ethnicity
– Mobility
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Demographic Segmentation

Age & life-

Life stage
cycle stage

Race & Gender

culture

Generation Income

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 Demographic Segmentation
• Age and life-cycle stage
– Our wants and abilities change with age
• Life stage
– A person’s major concern (e.g., divorce)

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 Demographic Segmentation
• Gender
– Men and women have
different attitudes and
behave differently
• Income
– Income segmentation is
a long-standing practice

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 Demographic Segmentation
• Generation

Millennials (Gen Y) Gen X

Baby Boomers Silent Generation

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 Demographic Segmentation
• Race and culture

Hispanic Americans Asian Americans

African Americans LGBT

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 Psychographic Segmentation
• Buyers are divided into groups on the basis of
psychological/personality traits, lifestyle, or
values

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BEHAVIORAL SEGMENTATION
• Needs and benefits
• Decision roles
– Initiator
– Influencer
– Decider
– Buyer
– User

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 HEAVY AND LIGHT USERS OF COMMON
CONSUMER PRODUCTS
PRODUCT (% USERS) HEAVY HALF LIGHT HALF
Soups and
detergents (94%) 75% 25%
Toilet tissue (95%) 71% 29%
Shampoo (94%) 79% 21%
Paper towels (90%) 75% 25%
Cake mix (74%) 83% 17%
Cola (67%) 83% 17%
Beer (41%) 87% 13%
Dog food (30%) 81% 19%
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Bourbon (20%) 95% 5%
USER AND USAGE-RELATED
VARIABLES

Occasions User status

Attitude Usage rate

Buyer-
Loyalty
readiness
status
stage

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PORTER’S FIVE FORCES MODEL

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Evaluating & Selecting the Market
Segments
• Figure 9.4: Possible Levels of Segmentation

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