Marketing : Market Segmentation Continued

Psychographics Segmentation

Although demographic segmentation is useful, marketers can use alternative segmentation variables which aim to develop more accurate profiles of their target segments. Psychographics segmentation can be broken down into lifestyle, social class, and personality characteristics.

Lifestyles segmentation

The Oxford English dictionary defines a lifestyle ’as a way of life' and lifestyle segmentation aims to examine the way people live.

Our lifestyle, our every days activities, our interest, opinions and beliefs on certain issues dictates who we are. Marketers refer to these as AIO’s (Activities, Interest and Opinions), and our AIO’s dictate our everyday behavior from where we shop to what we buy. Marketers develop and aim products/services at particular lifestyle groups and develop lifestyle profiles on their target market. If we understand the lifestyle of a particular group we can sell them product/services on the basis that it will enhance their lifestyle. A lifestyle group is a particular segment defined by the organization that is marketing a product or service. This lifestyle segment is labeled because individual within it display similar characteristics. For example in the early 1980s within the UK as the economy was booming the City of London were increasingly employing young independent staff on very high salaries. The media termed this group as YUPPIES; they were young upwardly mobile professionals, associated with mobile phones, money, expensive cars, and prestigious city jobs.

Third agers are another group termed and identified by the marketing industry. They are people in their 50’s retired from a profession, and have a high disposable income with time on the hand.

Many of these third-agers are adventurous and experimenters, as they have spent their past lives working hard and they seek enjoyment from their remaining years and have the income to spend on luxury items. In the United States there are 70 million third-agers who are the fastest growing users of the internet, spending more time on the internet then their younger counterpart. www.thirdage.com has a hit rate of 500,000 per month.

Personality Characteristics

Products and brands can also be aimed at particular personalities. Pigaio motorcycles are aimed at young 18-25 outgoing, independent persons. Often marketers try to develop personalities for their brands and products that mimic that of their target market. Ask yourself if Nike or Levi’s was a person, what type of person would they be?

Social Class Segmentation

Divides society into 6 distinct groups based solely on occupation.

A Professional staff

B Middle management

C1 Junior management

C2 Skilled manual

D Semi-skilled and unskilled workers.

E Those dependent on the state.

Social class segmentation works on the assumption that the higher your profession the more you will earn. Thus the more affluent lifestyle you will lead. Marketers use this type of information to sell products and services based on lifestyle behavior, and your profession does have an impact on the way you behave.

Behavioral Segmentation

Refers to why people purchase a product or service. Behavioral segmentation can be broken down into the benefit a consumer seeks from purchasing a product. How will the product enhance their overall lifestyle? When purchasing a computer the benefit sought maybe of ‘ease of use’ to the ‘need for speed’. Occasion is another variable. When should a product be purchased? The demand for turkeys increases during Christmas, flowers and chocolates on mother’s day and so on. Occasion segmentation aims to increase the ‘reason to buy factor’ and thus increase sales. Usage rate divides customers into light, medium and heavy users. Heavy users obviously contribute more to turnover then light or medium users, the objective of an organization should be to attract heavy users who will make a greater contribution to company sales.