Segmentation

The identification of individual or organisations with similar characteristics that have significant implications for the determination of marketing strategy.

Dividing a diverse market into a number of smaller, more similar, sub-markets.

Better serve each sub-market effectively + profitability.

Why use segmentation?

o Level of involvement o Product choice criteria (rational vs. emotional) o Buying situation

Consumers are different

o Motivations o Needs o Personality and social factors

Age-based segmentation

Sharing similar experiences and engage in shared cultural references.

Two types:

- Life stage - Generational

‘Defining moments’ influence values, preferences, attitudes and buying behaviour in ways that remain with them over their entire lifetime.

Millennials (Generation Y)

Millennials -> growing up in the new millennium. Debate what year groups

• Born between 1980 – 2000 • Or born between 1983 – 1995 • Termed Gen Y when they gained spending powers as teenagers

Characteristics:

§ Powerful economic demographic § Technologically orientated § More brand loyal § Expect instant access to information

Generation Z

Born after 1995 – 2012 Characteristics:

§ Grown-up with digital technology § Consume via smartphones, not TV § Comfortable with gender ambiguity § Congregate in visual social media § Engage with authenticity or idealised lifestyles § Uniqueness and creativity is key

Tweens and teens

Tweens -> usually between 8 – 12 years old

- Consumers in training - Beginning to make independent purchases

Teens -> all youths 13 – 18 years olds

- Large market segment - Tech-savvy (aka digital natives), heavy users of social media - Difficult to reach due to speed to changes

Generation X

• Born somewhere between 1962 – 1985 • The “lost” generation • “latchkey” kids, exposed to day care + divorce • Grew up in largely Conservative governments + economic recession • Pessimistic about financial future • Work hard, play hard • Suspicious of marketing campaigns • Prefer straightforward evidence to support claims

Baby Boomers / Boomers I

• Born between 1945 – 1964 • Post-world war II generation • Economic growth and optimism • Largest generational group • Original 1960s teenager • Source of power behind economic shifts • Era of JFK and Civil Rights movements

Boomers II / Generation Jones

Born between 1955 – 1965 Characteristics:

§ Narcissism, materialistic § Focus on self-help § Scepticism over media and institutions § AIDS era § Yuppies

Grey market

Four segments:

è Older (55-64) è Elderly (65-74) è Aged (75-84) è Very old (85+)

Characteristics:

o Autonomy (financial independence, strong buying power) o Connectedness (communities) o Altruism

Generation M

Millennial consumers that identify as Muslim. Trend settling, confident of their Muslim identities and asserting needs in travel, food, education, fashion….

Mipsterz (Muslim hipsters)

‘GUMmies’ (Global Urban Muslim consumers)

ELITE

§ most privileged group in the UK

§ distinction through wealth

§ highest levels of all three capitals

ESTABLISHED MIDDLE CLASS

§ second wealthiest

§ scores highly on all three capitals

§ largest and most gregarious group

§ scoring second highest for cultural capital

TECHNICAL MIDDLE CLASS § a small, distinctive new class group

§ prosperous but scores low for social and cultural capital

§ distinguished by its social isolation and cultural apathy

NEW AFFLUENT WORKERS

§ a young class group, socially and culturally active

§ middling levels of economic capital

TRADITIONAL WORKING CLASS

§ scores low on all forms of capital, not deprived

§ members have reasonably high house values

§ oldest average age at 66

EMERGENT SERVICE WORKERS

§ a new, young, urban group

§ relatively poor but has high social and cultural capital

PRECARIAT, OR PRECARIOUS PROLETARIAT

§ poorest, most deprived class

§ scoring low for social and cultural capital

VALS Framework

VALS segments US adults into eight distinct types – or mindsets – using a specific set of psychological traits and key demographics that drive consumer behavior. Focus on primary motivation and resources. Determines how a person will express himself or herself in the marketplace as a consumer.