Bases for Segmenting Consumer Markets
- Market Segment- consists of a group of customers who share a similar set of needs and wants
- Some researchers define segments by looking at descriptive characteristics:
- Geographic Segmentation- divides the market into geographical units such as nations, states, regions, counties, cities, neighborhoods.
- Grassroots marketing- marketers concentrate on making such activities as personally relevant to individual customers as possible.
- The groups take into consideration 39 factors in five broad categories:
- Education and affluence
- Family life cycle
- Urbanization
- Race and ethnicity
- Mobility
- Demographic Segmentation- variables such as age, family size, family life cycle, gender, income. occupation, education, religion, race, generation, nationality, and social classes are so popular with marketers is that they're often associated with consumer needs and wants.
- Age and Life-Cycle Stage- Consumer wants and abilities to change with age
- Life Stage- People in the same part of the life cycle may still differ in their life stage.
- Life stage defines a person's major concern, such as going through a divorce, going into a second marriage, taking care of an older parent, buying a home, and so on.
- Gender- Men and women have different attitudes and behave differently, based partly on genetic makeup and partly on socialization.
- Income- a long-standing practice in such categories as automobiles, clothing, cosmetics, financial services, and travel.
- Generation- Each generation or cohort is profoundly influenced by the times in which it grows up-the music, movies, politics, and defining events of that period.
- Millennials (Gen Y)- Born from 1977 through 1994
- Generation X- Born from 1964 through 1978
- Baby Boomers- Born from 1946 through 1964
- Silent Generation- Born from 1925 through 1945
- Race and Culture
- Multicultural marketing- an approach recognizing that different ethnic and cultural segments have sufficiently different needs and wants to require targeted marketing activities and that a mass marketing approach is not refined enough for diversity of the marketplace.
- Psychographic Segmentation the science of using psychology and demographics to better understand consumers.
- In psychographic segmentation, buyers are divided into groups on the basis of psychological/personality traits, lifestyles, or values.
- Behavioral Segmentation- marketers divide buyers into large groups on the basis of their knowledge of, attitude towards, us of, or response to a product.
- Behavioral variables can include needs or benefits, decision roles, and user and usage.
- Needs and Benefits-Not everyone who buys a product has the same needs or wants the same benefits from it.
- Decision Roles
- People can play five roles in a buying decision:
- Initiator
- Influencer
- Decider
- Buyer
- User
- User and Usage-Related Variables
- Many marketers believe variables related to users or their usage-occasions, user status, usage rate, buyer readiness stage, and loyalty status are good starting points for constructing market segments.
- Occasions- mark a time of day, week, month, year, or well-defined temporal aspects of a consumer's life.
- User status- Every product has its nonusers, ex-users, potential users, first-time users, and regular users.
- Usage rate- We can segment markets into light, medium, and heavy product users.
- Buyer-readiness stage- Some people are unaware of the product, some are aware, some are informed, some are interested, some desire the product, and some intend to buy.
- Marketing funnel - to break the market into buyer-readiness stages
- Loyalty status- Marketers usually envision four groups based on brand loyalty status: hard-core loyals, split loyals, shifting loyals, and switchers.
- Attitude
- Five consumer attitudes about products are:
- Enthusiastic
- Positive
- Indifferent
- Negative
- Hostile
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