Consumer Behavior,
Eighth Edition
SCHIFFMAN & KANUK
Chapter 3
Market Segmentation
3-1
Market
Segmentation
The process of
dividing a potential
market into distinct
subsets of consumers
and selecting one or
more segments as a
target market to be
reached with a
distinct marketing
mix.
3-2
Three Phases of Marketing
Strategy
• Phase 1: Market Segmentation
• Phase 2: Target Market and Marketing Mix
Selection
• Phase 3: Product/Brand Positioning
3-3
1
Table 3.1: Sodexho’s Segmentation of
College-age Eating Patterns
Star Gazers
• Light, healthy foods
• Price insensitive
• Brand conscious
• Employed full-time
over summer
• Active, out-going
• Family income >
100,000
Fun Express
• Variety, taste, and
nutrition
• Price conscious
• Work part-time over
summer
• Value leisure time
• Family income
$30,000 - 60,000
3-4
“Best” Customer Segmentation
High
High
Current Share
Low
HiHighs
(stroke)
LowHighs
(chase)
HiLows
(tickle)
LoLows
(starve)
Consumption
Low
3-5
Segmentation Studies
• Designed to discover the needs and wants of
specific groups of consumers in order to
develop specialized products to satisfy
specific group needs (e.g., Centrum)
• Designed to guide the repositioning of a
product (e.g., Nintendo)
• Used to identify the most appropriate media
for advertising (e.g., People and Teen
People)
3-6
2
Bases for Segmentation
•
•
•
•
•
•
•
•
•
Geographic Segmentation
Demographic Segmentation
Psychological Segmentation
Psychographic Segmentation
Sociocultural Segmentation
Use-Related Segmentation
Usage-Situation Segmentation
Benefit Segmentation
Hybrid Segmentation Approaches
3-7
Table 3.2 Market Segmentation
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Geographic Segmentation
Region
Southwest, Mountain States, Alaska, Hawaii
City Size
Major metropolitan areas, small cities, towns
Density of area
Urban, suburban, exurban, rural
Climate
Temperate, hot, humid, rainy
Demographic Segmentation
Age
Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Sex
Male, female
Marital status
Single, married, divorced, living together, widowed
Income
Under $25,000, $25,000-$34,999, $35,000-$49,999,
$50,000-$74,999, $75,000-$99,999, $100,000 and over
Education
Some high school, high school graduate, some college,
college graduate, postgraduate
Occupation
Professional, blue-collar, white-collar, agricultural,
military
3-8
Table 3.2, continued
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Psychological Segmentation
Needs-motivation
Shelter, safety, security, affection, sense of self-worth
Personality
Extroverts, novelty seeker, aggressives, low dogmatics
Perception
Low-risk, moderate-risk, high-risk
Learning-involvement
Low-involvement, high-involvement
Attitudes
Positive attitude, negative attitude
Psychographic
(Lifestyle) Segmentation
Economy-minded, couch potatoes, outdoors enthusiasts,
status seekers
Sociocultural Segmentation
Cultures
American, Italian, Chinese, Mexican, French, Pakistani
Religion
Catholic, Protestant, Jewish, Moslem, other
Subcultures (Race/ethnic)
African-American, Caucasian, Asian, Hispanic
Social class
Lower, middle, upper
Family life cycle
Bachelors, young married, full nesters, empty nesters
3-9
3
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Use-Related Segmentation
Usage rate
Heavy users, medium users, light users, non users
Awareness status
Unaware, aware, interested, enthusiastic
Brand loyalty
None, some, strong
Use-Situation Segmentation
Time
Leisure, work, rush, morning, night
Objective
Personal, gift, snack, fun, achievement
Location
Home, work, friend’s home, in-store
Person
Self, family members, friends, boss, peers
Benefit Segmentation
Convenience, social acceptance, long lasting, economy,
value-for-the-money
Hybrid Segmentation
Demographic/
Combination of demographic and psychographic profiles
Psychographics
of consumer segments profiles
Geodemographics
“Money and Brains,” “Black Enterprise,” “Old Yankee
Rows,” “Downtown Dixie-Style”
SRI VALSTM
Actualizer, fulfilled, believer, achiever, striver,
experiencer, maker, struggler
3-10
Geographic
Segmentation
The division of a total
potential market into
smaller subgroups on
the basis of
geographic variables
(e.g., region, state, or
city).
3-11
Demographic Segmentation
•
•
•
•
Age
Sex
Marital Status
Income, Education, and Occupation
3-12
4
Age: Segmentation by Age Effects
and Cohort Effects
• Seven Life Development Stages (Table 3.3)
– Provisional Adulthood
• Pulling up roots
– First Adulthood
• Reaching out, Questions/questions, Mid-life
explosion
– Second Adulthood
• Settling Down, Mellowing, Retirement
3-13
Marital Status
• Households as a consuming unit
–
–
–
–
Singles
Divorced
Single parents
Dual-income married
3-14
Psychological Segmentation
•
•
•
•
•
Motivations
Personality
Perceptions
Learning
Attitudes
3-15
5
AIOs
Psychographic
(lifestyle) variables
that focus on
activities, interests,
and opinions.
3-16
Table 3.7 A Hypothetical Psychographic
Profile of the Techno-Road-Warrior
•Sends and/or receives 15 or more e-mail
messages a week
•Regularly visits Web sites to gather information
and/or to comparison shop
•Often buys personal items via 800 numbers
and/or over the Internet
•May trade stocks and/or make travel reservations
over the Internet
•Earns $100,000 or more a year
3-17
Sociocultural Segmentation
• Family Life Cycle
• Social Class
• Culture, Subculture, and Cross-Culture
3-18
6
Family Life Cycle
• Phases a family goes through in their
formation, growth, and final dissolution
–
–
–
–
–
Bachelorhood
Honeymooners
Parenthood
Post-parenthood
Dissolution
• Explicit basis: marital status, family status
• Implicit basis: age, income, employment
3-19
Use-Related Segmentation
• Rate of Usage
– Heavy vs. Light
• Awareness Status
– Aware vs. Unaware
• Brand Loyalty
– Brand Loyal vs. Brand Switchers
3-20
Usage-Situation Segmentation
• Segmenting on the basis of special
occasions or situations
• Example Statements:
– Whenever our daughter, Jamie, gets a raise, we
always take her out to dinner.
– When I’m away on business, I try to stay at a
suites hotel.
– I always buy my wife flowers on Valentine’s
Day.
3-21
7
Benefit Segmentation
• Segmenting on the basis of the most
important and meaningful benefit
– Prudential - financial security
– Iomega - data protection
– Wheaties - good health
– Eclipse - fresh breath
3-22
Hybrid Segmentation Approaches
• Psychographic-Demographic Profiles
• Geodemographic Segmentation
• SRI Consulting’s Values and Lifestyle
System (VALSTM)
3-23
Table 3.8 Demographic-Psychographic
Profile of Newsweek
•
•
•
•
•
•
•
•
Total adult readers 19,593,000
Men
Professionals/ Managers
Age 35-49
Household income >$100,000
Married
Own laptop PC
Spent $3000+ on vacation last year
%
Index
100.0
55.9
35.3
36.5
25.1
62.4
12.0
12.3
100
117
174
114
172
109
150
164
3-24
8
Table 3.9 Demographic-Psychographic
Internet Shopping Styles
•
•
•
•
•
•
E-bivalent Newbies
Time-Sensitive Materialists
Clicks & Mortar
Hooked, Online, & Single
Hunter-Gatherers
Brand Loyalists
3-25
Table 3.10 Sample Claritas
Geodemographic Clusters
Blue Blood Estates
Young Influentials
• .8% of U.S. households • 1.1% of U.S.
households
• Professional
• Professional
• Elite super-rich
• College graduate
• College graduate
• Under 24, 25-34
• 35-44, 45-54, 55-64
• Country club members, • Yuppies, drink
imported beer, read
own mutual phones,
fashion magazines
play golf
3-26
Figure 3.8
VALS
ACTUALIZERS
High Resources
Principle Oriented Status Oriented Action Oriented
FULFILLEDS
BELIEVERS
ACHIEVERS EXPERIENCERS
STRIVERS
STRUGGLERS
MAKERS
Low Resources
3-27
9
Figure 3.9 VALS 2 Segments and
Participation in Selected Sports
Percent of adults in each VALS 2 type who participated in selected sports in 1995.
Actualizers
Experiencers
Achievers
Makers
Fulfilleds
Strivers
Believers
Strugglers
0
2
Mountain/rock climbing
4
6
8
10
Jet skiing/wave running/water biking
12
14
Inline skating
3-28
Table 3.11 Size of VALS Segment as
Percent of U.S. Population
VALSTM SEGMENT
Actualizer
Fulfilled
Believer
Achiever
Striver
Experiencer
Maker
Struggler
PERCENT OF
POPULATION
11.7%
10.5
17.0
14.7
11.8
12.9
12.0
9.5
3-29
Mindbase Segmentation
• Monitor Mindbase based on Yankelovich’s
Monitor Survey of American Values and
Attitudes
• Table 3.12
3-30
10
Table 3.12 Eight Major Mindbase
Segments
•
•
•
•
Up and Comers
Young Materialists
Stressed by Life
New
Traditionalists
•
•
•
•
Family Limited
Detached Introverts
Renaissance Elders
Retired from Life
3-31
Criteria For Effective Targeting of
Market Segments
•
•
•
•
Identification
Sufficiency
Stability
Accessibility
3-32
11