MARKET SEGMENTATION The process of analizing and classifying customers in a given target market and putting them into smaller, more precise target market.

WHO IS YOUR TARGET? When crafting your business plan or giving it an overhaul, it's critical to thoroughly understand your target customers. Understanding your target customers' demographics helps you determine exactly what your products or services will be, and what kind of customer service tactics work best.

DEMOGRAPHICS-Age-gender-race-family- income, etc… As the boundaries between categories begin to blur, and consumers no longer like to be singled out based on income, gender, ethnicity or education, one of the keys to keeping your marketing cutting-edge is customization, and personalization--essentially letting your customer know you think of them as an individual and understand their lifestyle. If you don't speak to their lifestyle, a customer will tune you out. Get a firm grasp on the lifestyles of the five very distinct generations:

BOOMERS – born Boomers Until the boomer generation hit age 50, marketers generally forgot consumers once they passed that age mark. Today, however, they're awakening to the buying power of this 76 million-strong group. On average boomers spend $400 billion more per year than any other generation. They're at many life stages: empty nesters or full nesters, boomer grandparents, single or married, etc. What they have in common is exceptional drive and the ability to evaluate advertising and determine its value to them. Between 2005 and 2030, the over-60 group will grow by 80 percent--as they age, be careful not to label them as "old." This generation has a Peter Pan complex--play up their youthfulness in marketing.

Baby Boomer Generation

GENERATION X – Born Gen X They are perhaps the most overlooked generation, falling in the shadow of the powerful baby-boom generation. But the 44 million Gen Xers born between 1965 and 1980 are entering their peak earning and buying years. They're tech-savvy and love to shop. They have a high value for education and knowledge. Unlike Gen Yers, brand prestige alone won't woo this generation--let them know why your product is a good value. They are independent and like to save.

Generation X

GENERATION Y – Gen Y Also referred to as millenials, they are the children of boomers. Because of higher costs of living or, in some cases, the over-protective nature of their boomer parents, many are choosing to live at home. University of Michigan economics and public policy professor Bob Schoeni told Time magazine that the percentage of 26-year-olds living with their parents rose from 11 percent to 20 percent between 1970 and They're 75 million strong and they have disposable income because of their parents' support. Growing up with computers means this generation is especially responsive to internet campaigns. They process information quickly and are especially brand loyal. Gen Yers like innovative marketing approaches and advertising that uses humor or is "outside the box."

Generation Y – Born around 1981 to 1995

GEN Z – Born between The internet generation, they're the children of the youngest boomers. Because this generation is still very young, marketing and demographics theories are still developing. One huge distinction, however, can be made: This generation is the only one to be born entirely in the internet era, and to parents who are generally more accepting and knowledgeable of such technology. A significant aspect of this generation is its widespread usage of the internet from a young age. Members of Generation Z are typically thought of as being comfortable with technology, and interacting on social media websites accounts for a significant portion of their socializing. Some commentators have suggested that growing up through the September 11 terrorist attacks and the Great Recession has given the feeling of unsettlement and insecurity.September 11 terrorist attacksGreat Recession

Generation Z

Comparing generations…

Geographic segmentation tries to divide markets into different geographical units: these units include: Regions: e.g. in the UK these might be England, Scotland, Wales Northern Ireland or (at a more detailed level) counties or major metropolitan areas Countries: perhaps categorised by size, development or membership of geographic region City / Town size: e.g. population within ranges or above a certain level Population density: e.g. urban, suburban, rural, semi-rural Climate: e.g. Northern, Southern Geographic segmentation is an important process - particularly for multi-national and global businesses and brands. Many such companies have regional and national marketing programmes which alter their products, advertising and promotion to meet the individual needs of geographic units. GEOGRAPHIC SEGMENTATION

Examples of Geographic Segmentation

PSYCHOGRAPHIC SEGMENTATION Psychographic segmentation is sometimes also referred to as behavioural segmentation. This type of segmentation divides the market into groups according to customers’ lifestyles. It considers a number of potential influences on buying behaviour, including the attitudes, expectations and activities of consumers. If these are known, then products and marketing campaigns can be customized so that they appeal more specifically to customer motivations.

PSYCHOGRAPHICS Opinions, interests and hobbies – this covers a huge area and includes consumers’ political opinions, views on the environment, sporting and recreational activities and arts and cultural issues. The opinions that consumers hold and the activities they engage in will have a huge impact on the products they buy and marketers need to be aware of any changes. Good recent examples include the growth of demand for organic foods or products that are (or are “perceived” to be) environmentally friendly

PSYCHOGRAPHIC SEGMENTATION

MORE EXAMPLES OF PSYCHOGRAPHICS Degree of loyalty – customers who buy one brand either all or most of the time are valuable to firms. By segmenting markets in this way, firms can adapt their marketing in order to retain loyal customers, rather than having to focus constantly on recruiting new customers. It is often said that it is ten times more profitable selling to existing customers than trying to find new ones. So the moral is – work hard at keeping your customers.

Examples of Psychographic Segmentation

PSYCHOGRAPHICS Occasions – this segments on the basis of when a product is purchased or consumed. For example, some consumers may only purchase flowers, wine or boxes of chocolates for celebrating birthdays or Christmas, whereas other consumers may buy these products on a weekly basis. Marketers often try to change customer perception of the best time to consumer a product by promoting alternative uses for a product. For example, recently Kellogg’s has attempted to change the image of cereals to that of an ‘any time’ snack, rather than simply a breakfast meal.

QUIZ 1. What generation is the only one to be born entirely in the internet Era? 2. What is demographic segmentation? 3. This type of segmentation divides the market into groups according to customers’ lifestyles…name that segmentation. 4. Countries, towns, population density and climate fall under what segmention? 5. What generation was born between 1965 to about 1980?