Market segmentation

1. NESC ONLINE
CLASSES
RETAIL PROMOTION RETAIL SERVICES
UNIT 4.9
CONCEPTS OF MARKETING STRATEGY
MARKET SEGMENTATION – FAMILY LIFE CYCLE
&
Psychographic Segmentation

2. WhatisaFamily?
 Family
 is defined as a group of two or more people (one of whom is a
householder) related by birth, marriage or adoption and residing
together
 Household:
 Is a family and any unrelated person residing in the same house
and consuming food from a common kitchen at least once a day
 Two types of household:
 Family Household
 Institutional Household e.g. Hostel
All families are households but all households are not families

3. Typesof Family
 Family of Orientation
 Consist of one’s parents and elders
 Provides orientation towards
 Social: Religion, Politics, Economics
 Emotional: Self Worth, Ambition, Love and Care
 Family of Procreation
 Consist of one’s spouse and children
 Most important buying unit in a market
The influence of Family of Orientation decreases with Age

4. Typesof Family
 Traditional Family Types:
 Married Couple:
 Simplest type of family consisting of husband and wife
 Nuclear Family:
 Consist of Husband Wife and at least one child
 Extended Family:
 Consist of a nuclear family with at least one grand parent
 Joint Family:
 Blood relatives and their spouses with kids staying together
 New Modes of Family
 Blended Family:
 A family in which either or both partner were previously married
 Single Parent Family:
 A family in which only one of the parent is present

5. Functionsof aFamily
 Provides Economic Well Being
 Provides Emotional Support
 Provides Suitable Life Style
 Provides Social Relationships
 Provides Morals and Ethical Values
 Provides Religious Values
 Provides Interpersonal Skills

6. FamilyLife Cycle(1/2)
 Stage 1 :Bachelorhood
 Few Financial Burdens
 Fashion and Recreation Oriented
 Stage 2: Newly Married Couple
 Financially better off
 Highest purchase rate of consumables and durables
 Romantically inclined
 Stage 3 : Parenthood
 Elementary school stage
 Youngest child < 6 years of age
 Low Liquid Assets
 High purchase of baby food & baby oriented products
 High school stage
 Youngest child >= 6 years of age
 Financially better off
 College Phase
 All children still financially dependent
 High family influence on purchases
 Major expense on higher education

7. FamilyLife Cycle(2/2)
 Stage 4: Post Parent Hood
 Head of the family in labour force
 No Dependent Children
 Expenditure in self development
 Stage 5 :Dissolution :
 Solitary Survivor – II
 Single Surviving head of family in labor
force
 Supported by family and friends
 Have high expendable income
 Spent on loneliness reducing products
and services
 Solitary Survivor – II:
 Single Surviving wife
 Low levels of income and savings
 Expenditure on medical products,
security, affection

8. Eight Roles in the Family Decision-
Making Process
ROLE DESCRIPTION
Influencers Family member(s) who provide information to other
members about a product or service
Gatekeepers Family member(s) who control the flow of information
about a product or service into the family
Deciders Family member(s) with the power to determine
unilaterally or jointly whether to shop for, purchase, use,
consume, or dispose of a specific product or service
Buyers Family member(s) who make the actual purchase of a
particular product or service
Preparers Family member(s) who transform the product into a form
suitable for consumption by other family members
Users Family member(s) who use or consume a particular
product or service
Maintainers Family member(s) who service or repair the product so
that it will provide continued satisfaction.
Disposers Family member(s) who initiate or carry out the disposal or
discontinuation of a particular product or service

9. HouseholdDecisionMakingProcessInbuying
Communication
targeted at
Children
Communication
targeted at
Parents
Influencer
(Children)
Initiator
(Parents,
Children)
Information
Gathering
Decision
Maker
(Parents,
Children)
Purchaser
(Parents)
User
(Parents,
Children)

10. Typesof Family Decisions
 Husband Dominated Decisions
 Husband takes the purchase decisions
 Traditionally in products like Automobiles, Alcohol, Insurance
 Wife Dominated Decisions
 Wife takes the purchase decisions
 Traditionally in products like household maintenance items, food
and kitchen appliances
 Joint Decision Making
 Both husband and wife make the decision
 Traditionally in School choice, living room furniture, vacations
 Child Dominated Decision Making
 Child makes the “final product” decision
 Traditionally on children related items
 Unilateral Decision Making
 Taken by any member of the family
 Traditionally on Personal Care items, low priced goods
These Traditional Roles are Changing

11. Conflict Resolution
 Family Decisions are bound to create conflict
 Conflicts are resolved by:
 Bargaining:
 Reaching a compromise on which product to buy
 Impression Management:
 Misrepresentation of facts in order to create favorable impressions
 Use of Authority:
 Claiming superior authority to resolve the conflict
 Reasoning:
 Using logical arguments to resolve the conflict
 Playing on Emotions:
 Using emotions to resolve the conflict
 Additional Information:
 Getting additional Data or Third Party Information

12. Market Segmentation –Psychographic :
social class, lifestyle, personality,
characteristics
Lifestyle
RETAIL PROMOTION
Life style, in many ways, is an outward expression of ones self-concept.
Life style it can be viewed as a unique pattern of living which influences and
reflected by one’sbuying habits.
Psychographics may be viewed as the method of defining lifestyle in
measurable terms

13. The Nature Of
Lifestyles
L i f e s t y l e variables are defined by how people spend
their time (activities), what they consider important in
their environment (interests), and what they think of
themselves and the world around them (opinions).
Activities:- Work, Hobbies, Social Events,
vacation , Entertainment, Club Membership
I n t e r e s t s : - Family, Home, Job, Community,
recreation, Fashion
O p i n i o n s : - Personal Relations, Social issues,
politics, Business, Economics, Education etc

14. Market Segmentation - Psychographic
Personality
RETAIL PROMOTION

15. Brand
Personality
• Consumers attribute various descriptive
like traits to different brands in a wide
variety of product categories.
• Vo l v o – representing safety / family
orientation
• Levi’s 501 jeans – dependable, rugged &
American
• B M W - performance driven
• N i v e a – Mild and caring
• N i k e - the athlete inall of us.

16. SELF CONCEPT
• Is defined as the totality of individuals thoughts and feelings having
reference to him/ her as an object.
• Life style, in many ways, is an outward expression of ones self-concept.
• H o l d s that an individuals have a concept of B
ased on who
they think they are (the actual self)
• …
…
…
…and a concept of who they think they would like to be
(ideal self).
• EXTENDED SELF : N o t only does our self image influence
products we choose, but the products (of symbolic value)
we possess frequently influence our
selfimage. E x t e n d e d self incorporates some of our m
o
r
e
important possessions into our self concept.
W e are what we wear, and what we use.

17. Actual Self
Concept
Private
Self
Socia
l Self
Actual Self
How I actually
see myself
Ideal self
How I would like
to see myself
Social Self
How others
actually see me
Ideal Social Self
How I would like
others to see me.

18. Brand Personality
Sincerity
Down-to-earth
Honest
Wholesome
Cheerful
Excitement
Daring
Spirited
Imaginative
Up-to-date
Competence
Reliable
Intelligent
successful
Sophistication
Upper class
Charming
Ruggedness
Tough
Outdoorsy

19. Social-Class
THE UPPER-UPPER CLASS--COUNTRY CLUB
•Small number of well-established families
•Belong to best country clubs and sponsor major charity events
•Serve as trustees for local colleges and hospitals
•Prominent physicians and lawyers
•May be heads of major financial institutions, owners of major
long-established firms
•Accustomed to wealth, so do not spend money conspicuously
THE LOWER-UPPER CLASS--NEW WEALTH
•Not quite accepted by the upper crust of society
•Represent “new money”
•Successful business executive
•Conspicuous users of their new wealth
11-19

20. THE UPPER-MIDDLE CLASS--
ACHIEVING PROFESSIONALS
•Have neither family status nor unusual wealth
•Career oriented
•Young, successful professionals, corporate managers, and
business owners
•Most are college graduates, many with advanced degrees
•Active in professional, community, and social activities
•Have a keen interest in obtaining the “better things in life”
•Their homes serve as symbols of their achievements
•Consumption is often conspicuous
•Very child oriented
11-20

21. THE LOWER-MIDDLE CLASS--FAITHFUL FOLLOWERS
•Primary non-managerial white-collar workers and highly paid
blue-collar workers
•Want to achieve “respectability” and be accepted as good
citizens
•Want their children to be well behaved
•Tend to be churchgoers and are often involved in church-
sponsored activities
•Prefer a neat and clean appearance and tend to avoid faddish
or highly-styled clothing
•Constitute a major market for do-it-yourself products
11-21

22. THE UPPER-LOWER CLASS--SECURITY-MINDED MAJORITY
•The largest social-class segment
•Solidly blue-collar
•Strive for security
•View work as a means to “buy” enjoyment
•Want children to behave properly
•High wage earners in this group may spend impulsively
•Interested in items that enhance leisure time (e.g., TV sets)
•Husbands typically have a strong “macho” self-image
•Males are sports fans, heavy smokers, beer drinkers
11-22

23. THE LOWER-LOWER CLASS--ROCK BOTTOM
•Poorly educated, unskilled laborers
•Often out of work
•Children are often poorly treated
•Tend to live a day-to-day existence
11-23

24. Market Segmentation - Psychographic
Characteristics
24
RETAIL PROMOTION