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. .