Market Segmentation Dr Anthony Olden Thames Valley University, London NMPLIS Summer School, July 2010

2 Criteria for segmentation  You can segment (divide up) populations in numerous possible ways, for example according to demographic, socio-economic or lifestyle characteristics.

3  Standard ways include the following, some of which are taken from Alan R. Andreasen and Philip Kotler, Strategic Marketing for Nonprofit Organisations, 7 th ed. (Upper Saddle River, N.J.: Prentice-Hall, 2008): Gender: male and female schools, colleges, religious orders, prisons and hospital wards. Age: books for children, books and magazines for young adults, holidays (Saga) for older people in the UK.

4 Marital status: holidays for single people (Club 18-30) in Europe. Do you have to be single to participate in Big Brother? Race and ethnicity: the Irish Post and Asian Brides in the UK. Income level: what cars do Georgians, Armenians and Uzbeks with different income levels drive? Geographic location: the pharmaceutical industry targets wealthy markets in the West rather than less well-off developing countries. Social class: more significant in the UK than the US.

5 Family life cycle: this is an American categorisation  Young single (under 40, not married, no children)  Newly married (young, married, no children)  Full nest I (young, married, youngest child less than 6)  Full nest II (young, married, youngest child 6 to 13)  Full nest III (older married, dependent children 14 or older)

6  Empty nest I (older married, no children at home, head working)  Empty nest II (older married, no children at home, head retired)  Solitary survivor (older single, working or retired) These categories reflect some aspects of Western life, but by no means cover everyone. How applicable would they be to marketing in your countries?

7 Occasion: those who use buses to get to work every day and those who use them only when their car is being repaired and they cannot get a lift. User status: non-smokers, regular smokers, ex-smokers, potential smokers. Usage rate: heavy smokers, light smokers. Those who use the university library every day and those who use it much less frequently.

8 Values: some people in the UK will pay extra and buy “Fair Trade” bananas from the Caribbean and tea and coffee from East Africa because the farmers and plantation workers and their families get a better return. Personality: Rachel van Riel, who specialises in the promotion of reading, refers to the reader who asked the librarian for books about people “more depressed than me”.

9  You can link many of these segments, not treat them in isolation.  Ask yourself which segments are most promising for you, and target them.  Aim to get good results as quickly as possible and for the minimum outlay of resources.  Then build on your success and wider your scope.