WHAT IS MARKET SEGMENTATION ?
Market segmentation can be defined astheprocessofdividingapotential
Before the widespread adoption of the marketing concept, the prevailing way
of doing business with consumers was through mass marketing --- that is,
offering the same product and marketing mix to all consumers. The essence of
this strategy was summed up by the entrepreneur Henry Ford, who offered the
Model T automobile to the public ---
“ in any color they wanted, as long as it was black.” One of the four groups that hav
in the VALS system of lassification of consumer psychographics.
Actualizers are those consumers who are successful, sophisticated,
and active and have dominant characteristics. Their purchases often re
THE REAL FACE OF YOUR SEGMENTS
MARKETING IS ALL ABOUT IDENTIFYING
MARKET SEGMENTATION BASES AND
Density of Area
North, South, East, West.
Major metropolitan areas, small cities,towns
Urban, suburban, exurban, rural
Temperate, hot, humid
Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75+
Single, married, divorced, lining together,
Under $15000,$15000-$24000, $25000-$39999,
$40,000-$64,999, $65,000 and over.
Some high school, high school graduate, some
college, college graduate, postgraduate
Professional, blue-collar, white-collar, agricultural
MARKET SEGMENTATION BASES AND
Shelter, safety, security, affection, sense of self
Extroverts, introverts, aggressives, compliants
Low risk, moderate risk, high risk
Low involvement, high involvement
Positive attitude, negative attitude
Swingers, straights, conservatives, status seekers
American, Italian, Chinese, Mexican
Jewish, Catholic, Protestant, other
African-American, Caucasian, Oriental, Hispanic
Lower, middle, upper
Bachelors, young marrieds, empty nesters
MARKET SEGMENTATION BASES AND
Demographic Psychographic Profile
Heavy users, medium users, light users, nonusers
Unaware, aware, interested, enthusiastic
None, some, strong
Leisure, work, rush, morning, night
Personal use, gift, snack, fun, achievement
Home, work, friend’s home, in-store
Self, friends, boss, peer
Convenience, prestige, economy,
Combination of demographic and psychographic
Young Suburbia, Blue-Blood Estates
Actualizer, fulfilled, believer, achiever, striver,
experiencer, maker, struggler
AIO MODEL FOR GILETTE
If Gillette decided to evaluate the target market for its successful Sensor razor in
terms of psychographic characteristics, it might use the following statements to
capture individual and family predispositions toward the Sensor razor system :
Personal Statements :
I’m a demanding person.
For me, seeking perfection in what I do is really not important.
When I wake up in the morning, my appearance is uppermost on my mind.
When it comes to the way I dress, I’m not particularly fashion conscious.
Family Statements :
“Good” grooming is important to all members of my family.
Members of my family frequently comment about how good I look after I shave.
We are more likely to try new products than most of our friends and neighbors.
I imagine that we buy and use more grooming products than other people we
INFLUENCES ON LIFECYCLE
Culture and Society
Group and Individual
Expectations and Values
Market Reaction of
Lifestyle Patterns and
Activities Interests Opinions Demographics
Work Family Themselves Age
Hobbies Home Social Education
Social events Job Politics Income
Vacation Community Business Occupation
Entertainment Recreation Economics Family size
Club member Fashion Education Geography
Community Food Products City Size
Shopping Media Future Lifecycle
Sports Achievements Cultural Dwelling
Progressive Repositioning of an Existing Product
R1 First repositioning
R2 Second repositioning
To divide the market into separate segments on the basis of a common
need or characteristic that is relevant to the product or service, marketers
must be able to identify the relevant characteristic. Some segmentation
variables, such as geography (location) or demographics (age,gender,
occupation, race), are relatively easy to identify or are even observable.
Others, such as education, income, or marital status, can be determined
through questionnaires. Still other characteristics, such as benefits
sought or lifestyle, are more difficult to identify. A knowledge of
consumer behavior is especially useful to marketers who employ s such
intangible consumer characteristics as the basis for market segmentation..
For a market segment to be a worthwhile target, it
must have a sufficient number of people to warrant
tailoring a product or promotional campaign to its
specific needs or interests. To estimate the size of
each segment under consideration, marketers often
use secondary demographic data, such as that
provided by the United States Census Bureau (and
available at most local libraries), or undertrake a
probability survey whose findings can be projected to
the total market.
Most marketers prefer to target consumer segments that are relatively stable
in terms of demographic and psychological factors and needs, and that are
likely to grow larger over time. They prefer to avoid “fickle” segment that
are unpredictable in embracing fads. For example, teenagers are a sizable
and easily identifiable market segment, eager to buy, able to spend, and
easily reached. Yet by the time a marketer produces merchandise for a
popular teenage fad, interest in it may have waned. The popularity among
teenagers of Batman Merchandise (T-shirts and caps) during the highly
successful run of Batman I (the movie) was not repeated during Batman II,
when much of the tie-in promotional merchandise remained unsold.
A fourth requirement for effective targeting is accessibility, which means that marketers
be able to reach the market segments they wish to target in an economical way. Despite
the wide availability of special-interest magazines and cable TV programs, marketers are
constantly looking for new media that will enable them to reach their target markets with a
minimum of waster circulation and competition. One innovative communications company
has devised an advertiser’s dream : it created a cable television channel that provides a
captive audience of junior and senior high school students daily with two minutes of
commercials. Each school showing the 12-minute news and information report and two
minutes of commercials receives $50,000 worth of free satellite dishes, television sets, and
VCRs. The same company offers a set of six glossy magazines for display in doctors’
waiting rooms to 15,000 physicians who agree to cancel all but two other publications.
Advertisers are offered a large captive audience and a pledge of exclusivity : all six
magazines feature only one brand in any product category.
ACTUALIZERS are successful, sophisticated, active, “take-charge” people
with high self-esteem and abundant resources. They are interested in
and seek to develop, explore, and express themselves in a variety of ways--
sometimes guided by principle, and sometimes by a desire to have an effect,
to make a change. Image is important to Actualizers, not as evidence of
status or power, but as an expression of taste, independence, and character.
Actualizers are among the established and emerging leaders in business and
government, yet they continue to seek challenges. They have a wide range
interests, are concerned with social issues, and are open to change. Their
lives are characterized by richness and diversity. Their possessions and
recreation reflect a cultivated taste for the finer things in life.
FULFILLEDS are mature, satisfied, comfortable, reflective people who
value order, knowledge, and responsibility. Most are well educated, and in
(or recently retired from ) professional occupations. They are well-informed
about world and national events and are alert to opportunities to broaden their
knowledge. Content with their careers, families, and station in life, their
leisure activities tend to center on their homes. Fulfilleds have a moderate
respect for the status quo, institutions of authority, and social decorum, but
are open-minded about new ideas and social change. Fulfilleds tend to base
their decisions on strongly held principles and consequently appear calm and
self-assured. Although their incomes allow them many choices, fulfilleds are
conservative, practical consumers; they are concerned about functionality,
value, and durability in the products they buy.
BELIEVERS are conservative, conventional people with concrete beliefs and strong
attachments to traditional institutions : family, church, community, and the nation. Many
Believers possess moral codes that are deeply rooted and literally interpreted. They follow
established routines, organized in large part around their homes, families, and the social or
religious organizations to which they belong. AS consumers, they are conservative and
predictable, favoring American products and established brands. Their education, income ,
and energy are modest bust sufficient to meet their needs.
ACHIEVERS are successful career and work-oriented people who like to --and generally
do--feel in control of their lives. They value structure, predictability, and stability over risk,
intimacy, and self-discovery. They are deeply committed to their work and their families.
Work provides them with a sense of duty, material rewards, and prestige. Their social lives
reflect this focus and are structured around family, church, and business. Achievers live
conventional lives, are politically conservative, and respect authority and the status quo. Image
is important to them. AS consumers , they favor established products and services that
demonstrate their success to their peers.
STRIVERS seek motivation, self-definition, and approval from the world
around them. They are striving to find a secure place in life. Unsure of themselves and low
on economic, social , and psychological resources, Strivers are deeply concerned about the
opinions and approval of others. Money defines success for Strivers, who don’t have enough
of it, and often feel that life has given them a raw deal. Strivers are easily bored and impulsive.
Many of them seek to be stylish. They emulate those who have more impressive possessions,
but what they wish to obtain is generally beyond their reach.
EXPERIENCERS are young, vital, enthusiastic, impulsive, and rebellious. They seek
variety and excitement, savoring the new, the offbeat, and the risky. Still in the process of
formulating life values and patterns of behavior, they quickly become enthusiastic about new
possibilities but are equally quick to cool. At this stage in their lives, they are politically
uncommitted, uninformed, and highly ambivalent about what they believe. Experiencers
combine an abstract disdain for conformity and authority with an outsider’s awe of others’
wealth, prestige, and power. Their energy finds an outlet in exercise, sports, outdoor recreation,
and social activities. Experiencers are avid consumers and spend much of their income on
clothing, fast food, music movies, and video.
MAKERS are practical people who have constructive skills and value self-sufficiency. They
live in a traditional context of family, practical work, and physical recreation, and have little
interest in what lies outside that context. Makers experience the work by working on it --
building a house, raising children, fixing a car, or canning vegetables - and have sufficient skill,
income, and energy to carry out their projects successfully. Makers are politically conservative,
suspicious of new ideas, respectful of government authority and organized labor, but resentful
of government intrusion on individual rights. They are unimpressed by material possessions
other than those with a practical or functional purpose (e.g., tools, pickup trucks, or fishing
STRUGGLERS’ lives are constricted. Chronically poor, ill-educated, low-skilled, without
strong social bonds, aging, and concerned about their health, they are often despairing and
passive. Because they are so limited, they show no evidence of a strong self-orientation, but
are focused on meeting the urgent needs of the present moment. Their chief concerns are for
security and safety. Strugglers are cautious consumers. They represent a very modest market
for most products and services, but are loyal to favorite brands.
Brand Personalities of Select Brands
BRAND SEX AGE OTHER CHARACTERISTICS
LEVI’S M/F 15-40 Individualistic,lavish,smart,trendy, upper crust
LEE COOPER M/F 20-35 Individualistic,sporty,tough,risk taker, assertive
LEE M 20-30 Anti establishment, macho, wild, outdoors,
WRANGLER M 20-25 Single, well off, handsome, tough & tough,
FLYING M 15-25 Ambitious, innocent, confident, flirtatious, good
KILLER M 25-35 Reasonably well off, rough & rough, ‘bad guy’
semi-urban, unattractive to girls
BRAND MARKETING STRATEGY
LEVI’S Target product at a wide age band between 15 and 45; emphasise the
cult status of the brand around the world, price the product at a premium
to every brand.
LEE Position the jeans as an extension of the American Dream; sell through
showrooms to maintain aura; price the product at the same level as top
LEE COOPER Offer different fits to occupy comfort pattern; price product at the same
level as top end competitors; draw associations from European lifestyle.
WRANGLER Target young urban buyers through customised communication;
position the product to appeal to outdoor instincts; use the type
generated by mega brands to push sales.
JORDACHE Position the product as high fashion weekend casual wear; use
lifestyle advertising to create an aura of affluence; sell through
exclusive counters at premium stores.
PEPE Position the product as the choice of the fashion conscious; offer
different ranges for men and women separately; expand reach by
selling through multi-brand outlets.
POSITIONING ACCORDING TO TREACY AND WIERSEMA
THIS IS BASED ON THE NOTION THAT IN EVERY MARKET
THERE IS A MIX OF THREE TYPES OF CUSTOMERS.
SOME CUSTOMERS FAVOR THE FIRM THAT IS ADVAN-
CING ON THE TECHNOLOGICAL FRONTIER (PRODUCT
LEADERSHIP); OTHER CUSTOMERS WANT HIGHLY
REALIABLE PERFORMANCE (OPERATIONAL EXCELLENCE),
AND STILL OTHER WANT HIGH RESPONSIVENESS IN
MEETING THEIR INDIVIDUAL NEEDS (CUSTOMER
1. BECOME THE BEST AT ONE OF THE THREE VALUE
2. ACHIEVE AN ADEQUATE PERFORMANCE LEVEL IN
THE OTHER TWO DISCIPLINES.
3. KEEP IMPROVING ONE’S SUPERIOR POSITION IN THE
CHOSEN DISCIPLINE SO AS NOT TO LOSE OUT TO A
4. KEEP BECOMING MORE ADEQUATE IN THE OTHER
TWO DISCIPLINES, BECAUSE COMPETITORS KEEP
RAISING CUSTOMERS’ EXPECTATIONS.
1. UNDERPOSITIONING: SOME COMPANIES DISCOVER
THAT BUYERS HAVE ONLY A VAGUE IDEA OF THE
BRAND. THE BRAND IS SEEN AS JUST ANOTHER
ENTRY IN A CROWDED MARKETPLACE. WHEN
PEPSI INTRODUCED ITS CLEAR CRYSTAL PEPSI IN
1993, CUSTOMERS WERE DISTINCTLY UNIMPRESSED.
THEY DIDN’T SEE “CLARITY” AS AN IMPORTANT
BENEFIT IN A SOFT DRINK.
2. OVERPOSITIONING: BUYERS MAY HAVE TOO NARROW
AN IMAGE OF THE BRAND. THUS A CONSUMER
MIGHT THINK THAT DIAMOND RINGS AT TIFFANY
START AT$5000 WHEN IN FACT TIFFANY NOW OFFERS
AFFORDABLE DIAMOND RINGS STARTING AT $1000.
3. CONFUSED POSITIONING: BUYERS MIGHT HAVE A CONFUSED
IMAGE OF THE BRAND RESULTING FROM THE COMPANY’S
MAKING TOO MANY CLAIMS OR CHANGING THE BRAND’S
POSITIONING TOO FREQUENTLY. THIS WAS THE CASE WITH
STEPHEN JOB’S SLEEK AND POWERFUL NEXT DESKTOP
COMPUTER, WHICH WAS POSITIONED FIRST FOR STUDENTS,
THEN FOR ENGINEERS, AND THEN FOR BUSINESSPEOPLE, ALL
4. DOUBTFUL POSITIONING: BUYERS MAY FIND IT HARD TO
BELIEVE THE BRAND CLAIMS IN VIEW OF THE PRODUCT’S
FEATURES, PRICE, OR MANUFACTURER. WHEN GM’S CADI-
LLAC DIVISION INTRODUCED THE CIMARRON, IT POSITIONED
THE CAR AS A LUXURY COMPETITOR WITH BMW, MERCEDES
AND AUDI. ALTHOUGH THE CAR FEATURED LEATHER SEATS,
A LUGGAGE RACK, LOTS OF CHROME, AND A CADILLAC LOGO
STAMPED ON THE CHASIS, CUSTOMERS SAW IT AS A DOLLED-
UP VERSION OF CHEVY’S CAVALIER AND OLDMOBILE’S
FIRENZA. THE CAR WAS POSITIONED AS “MORE FOR MORE”:
CUSTOMERS SAW IT AS “LESS FOR MORE.”
PRODUCT SERVICES PERSONNEL CHANNEL IMAGE
Maintenance and repair
WHY BUY ME IN PREFERENCE TO OTHERS?
•BRAND PROPOSITION :FUNCTIONAL REASONS TO BUY
VS OTHERS (WHAT DO YOU DO
•BRAND ATTRIBUTES RATIONAL REASONS TO BUY VS
OTHERS (REASONS TO BELIEVE/
•BRAND VALUES : EMOTIONAL REASONS TO BUY
VS OTHERS (INNER & OUTER
•BRAND PERSONALITY THE WAY THE BRAND SPEAKS
. . ... ..
IMPACT ON FABRICS
FOR A DETEREGENT
Belonging to a club
LACOSTE IDENTITY PRISM
All data processing
Big business, , Ivy League
Order and collectiveness
East coast, Wall Street
‘I am a pro’
Those who take
their business seriously
Changing the organisation