Segmentation Strategies

Segmentation Strategies

1. Psychographic Segmentation

   • divides consumers based on lifestyle and personality
   • advantages
     • rich data
     • understand why individuals buy
     • develop customer profiles
   • disadvantages
     • data is harder to collect
     • might vary from product to product
     • product usage
   • VALS2
   • Species of Shoppers (AC Nielson research)
     • Mercenaries
       • Store hop
       • compare prices
       • price conscious
       • promotionally aware
       • money=key motive
     • Frenzied Copers
       • always choose same things
       • process large amounts of information
       • fast shoppers
       • special offers
     • Self-Indulgents
       • little regard for price
       • jobs in cities
       • motivation=what's best for them
       • buy wine and fresh coffee
     • comfortable contenters
       • enjoy cooking
       • live in nice houses
       • usually the wife who shops
       • buy good quality brands in bulk
       • overspend
       • loyal
     • Habit Bound Die Hards
       • Older in profile
       • careful and prudent shoppers
       • strong traditional values
       • Dogmatic
     • Strong Idealists
       • idealogical principles
       • likes environmentally friendly products
       • convictions hampered by constraints
     • shopping haters
       • 15% of consumers
       • cynical and brand-conscious

2. Geographic Segmentation

   • dividing buyers into different geographical units such as
     • nations
     • regions
     • counties
     • neighbourhoods
   • advantages
     • language
     • climate
     • world views
   • disadvantages
     • globalisation

3. Demographic Segmentation

   • dividing the markets into groups based on variables such as
     • age
     • gender
     • family size
     • family lifecycle
     • income
     • occupation
     • religion
     • race and nationality
     • social class
   • advantages
     • measurable
     • related to sales
   • disadvantages
     • doesn't provide complete understanding of the differences

4. Geo-Demographic Segmentation

   • ACORN
     • "A Classification Of Residential Neighbourhoods"
     • use 40 variables from population census data to group residential areas
     • "Feathers of the same flock fly together"
     • ACORN categories and groups
       • A-Thriving
         • 1-Wealthy achievers, suburban areas
         • 2-Affluent greys, rural communities
         • 3-Prosperous pensioners, retirement agents
       • B-Expanding
         • 4-Affluent executives, family areas
         • 5-Well-off workers, family areas
       • C-Rising
         • 6-Affluent urbanities, towns and grey areas
         • 7-Prosperous professionals, metropolitan areas
         • 8-Better-off executives, inner city areas
       • D-Settling
         • 9-Comfortable agers, mature home owning areas
         • 10-Skilled workers, home owning areas
       • E-Aspiring
         • 11-New home owners, mature communities
         • 12-White collar workers, better-off multi-ethnic areas
       • F-Striving
         • 13-Older people, less prosperous areas
         • 14-Council estates residents, better-off homes
         • 15-Council estate, high unemployment
         • 16-Council estate residents, greatest hardships
         • 17-People in multi-ethnic, low income ages

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