Segmentation / Consumer Profiles

“the most bang for the buck” As marketers and business people, we will sell our products to whomever will buy it Ie: wedding gowns to seniors Retirement funds to a teenager Yet these aren’t our “most likely customers” we need to optimize our marketing dollar….let’s get the “the most bang for the buck”

Everyone has unique physical features, personality, values, beliefs, geographic location and history These differences are demonstrated by the daily decisions and behaviors these different people do As a marketer, the more we know about our potential customers, the better we are able to anticipate or influence their buying decisions

Marketers therefore create “Consumer Profiles” of the kind of people most likely to be attracted to a specific product Each identified group of consumers with common characteristics and buying habits is called a “consumer segment” which is accomplished through the process of “segmentation”.

Once identified, marketers will focus their efforts on trying to reach and influence these segments For some products, there may only be one segment….for others there may be multiple segments Examples: One segment: Wedding Gowns (females, 20-30, getting married) Multiple segments: Levi Jeans (how you sell jeans to teens is different than middle age, etc.)

Let’s look at how this is done……...

Categorizing potential consumers in this way enables marketers to direct their efforts toward a target market, a specific group of consumers who will be most interested in their product

DEMOGRAPHICS The study of obvious characteristics that categorize people. These characteristics include age, gender, family life cycle, income level and ethnicity and culture Each characteristic is then subdivided into variables or ranges

Let’s look at each of the main variables………

Depending on the market, people are grouped into various groups A. Age Depending on the market, people are grouped into various groups Stats Canada divides the population as such: 0-15, 15-24, 25-44, 45- 64, 65-74, 75+ Depending on the product / service, marketers need to determine the age group that will most likely purchase their product .

The classification of the population into either male or female B. Gender The classification of the population into either male or female Marketers must determine whether the target market for their product or service is mainly male, female or both and strategize accordingly Ie: Male – Cologne, Tools, Cars, Football Female – Perfume, Purses, Romantic Novels Both – Groceries, Gas, Movie Rentals

C. Family Life Cycle A consumer’s stage in the family life cycle determines many of his or her wants, needs and purchasing patterns Businesses use this demographic to determine who buys what for whom Ie: New Family – diapers, baby food Older Family – Ipods, computers

Examples of Family Life Cycle Stages Single Married (no children) Family (young children) Family (older children) Empty Nesters (children left) Retirees

D. Income Level Grouped by how much money the targeted consumer earns Allows marketers to determine how many consumers can afford their product / service In Canada, the average gross family income (before taxes) in 2008 is $ 90,000

Based upon these statistics, marketers can generally define the Canadian population into the following income segments: Wealthy / Affluent ($ 150,000 +) Middle Income ( $ 50,000 - $150,000) Lower Income ( $ 50,000 or less)

E. Ethnicity & Culture It is vital for a marketer to understand the ethnic and cultural differences of their market Marketers must design their marketing strategy to appeal to their target market, yet make sure they don’t offend them Ie… Wedding Gowns In our western culture, white is the norm In India and parts of China, red is worn for “good luck” Understanding our target market’s culture is essential to marketing success

PSYCHOGRAPHICS A system of measuring consumers’ beliefs, opinions, and interests. A way of profiling consumers on the way they “think”… IE: Religious beliefs, lifestyle, musical tastes, attitudes, etc. They are much harder to measure, yet they are vital in creating an effective customer profile

GEOGRAPHICS A system of measuring “where” consumers live Do your customers live: in a rural / urban / suburban area? Do they live in “pockets” or concentrations in certain places? IE: tractors – rural Canada Indian Cuisine – focus on areas of high Indian population Toronto Raptors – focus on urban / suburban GTA

What is the target consumer for People magazine? Profile Category Profile Group Targeted Consumer Age Gender Income Family Life Cycle Culture Lifestyle/Values Country/City

Profile Category Profile Group Targeted Consumer Demographics Age 25-40 Gender Female Income Middle Family Life Cycle Single or Married, No Children Culture ‘Western’ culture oriented. Hollywood references. Psychographics Lifestyle/Values Watches movies and television. Follows fashion. Buys name brands. Geographics Country/City North America, urban / suburban

A business will obviously sell their product to whomever they can, yet they need to focus their marketing efforts on those who are most likely to buy it However, if a marketer is able to effectively profile their target market, they can then begin to create a marketing plan that focuses on that “target” Although this doesn’t guarantee business success, your chances are much greater with a well reseached and targeted customer

The End !!