Segmentation Schemes

Mutually exclusive - separate from all others

Exhaustive - everyone must have an appropriate group

Measurable - size, purchasing power & profiles must be measurable

Substantial - each segment should have a significant membership

Actionable - can be reach through media

Benefits of segmentation

Valuable insight into product/service design to reflect market demand

Gives direction to advertising messages Yields cost savings from accurate

promotional message placement Enables focusing on competition’s

strengths/weaknesses by reducing variables

Fosters production of informed strategic marketing plans

Determine target audience

1. Undifferentiated marketing – shotgun

2. Differentiated - targets multiple segments with different incentive and message

3. Differentiated single segment (“Niche marketing” targets small groups of specific audiences

members.)

Demographic segments

Baby boomers - use benefit segments Generation Y - diversity, high income,

computer literate Teenagers - online sharing Geodemographics - use of PRIZM

lifestyle segments by zip code Millenials

Psychographic segments

Lifestyles, patterns of behavior AIO (Activities, Interests, Opinions) VALS (psychocentric, midcentric, near

allocentric, allocentric) Cohort segments - grew up at the same

time; life stages

Global Lifestyle Segments

Teens Gender Religious Symbolic capital – status

(Financial, Social, Cultural capital) Ethnic

Generic segmentation factors

Usage - rate, occasion-based, loyalty status(80/20 rule, RFM)

Price Benefits

Segment Benefit message Teens socialize w/o parents Tourist cultural exposure Employees chance to be outside

Aesthetic segmentation

Stimulation: thrilling, awesome Realism: working class Conventional sex identity: macho Shapes of round and curved: visual

stimulation Social status orientation Seriousness vs frivolity

Segmenting by action

Prosumers - consumers help design products, reject traditional ads, use Internet research

Professional Producer

+ Consumers Producing Proactive

Qualitative Approach -Persona segmentation

Consumer models = personas or archetypes

Qualitative analysis of user behavior Reveal motivations and potential usage

patterns

Niche Markets

Special interest groups Immigrants and expatriates for

homeland news Addresses needs and wants of special

segments with directed promotional messages

Questions for discussion

What is the value of cohort segmentation for targeting mature consumers for a vacation destination and why?

When would you use PRIZM vs. MOSIAC for promotion purposes?

What new market segments may emerge for future global audiences?