Types of Customers  Customers can be divided into groups with similar characteristics  Each separate group is known as a segment  This allows businesses to more easily meet a customers needs or wants.

Market or customer segmentation  Businesses commonly segment a market according to: –Age: some products are clearly linked to age –Sex: products such as cosmetics, clothing etc are clearly targeted at women –Socioeconomic factors: usually by considering the occupation or wage earners in the family. –Lifestyle: by a combination of personality, class, attitude and patterns of expenditure or spending –Geo-demographic: using a combination of economic and geographical factors.

UK Population Age Structure  Population structure is described as the proportion of population that falls within different age groups. E.g. 0-5, 12-16,  The UK is said to have an ageing population – which means a high proportion of the population falls within the older age range and the birth rate is decreasing.  Both these can be attributed to rising income levels and the general prosperity of the nation (which in turn means better health care) People with higher incomes can afford to look after their health better  Greater national wealth makes it easier for the government to raise money from taxes and therefore more money to raise from health care  More economic opportunities means people place more emphasis on their careers.

Sex or Gender  Obviously some products are gender specific – e.g. a dress or a tie  Some businesses cater only for one sex – particularly true of clothes shops –e.g. Top Shop (although now unisex)  Others cater for both but their main customers are from one sex – e.g. majority of Boots’ customers are mainly women due to popularity of cosmetics (beginning to change)

Income  As people’s incomes rise they have more money to spend on goods or services  People with higher incomes can afford more expensive products – tend to shift their demand towards so-called luxury or non-essential goods/services rises (businesses can cater for this by providing luxury items)  At higher income levels the % of income spent actually declines, but such people will still consume more than those on lower incomes

Socio-economic  Strongly connected with income is the idea of a socio- economic grouping which in part determines someone’s class  The Registrar General’s scale places people into seven different groupings to help determine a person’s class  Upper class, middle class and working class are still terms in use and reflect in part a person’s occupation, location and background (particularly their parent’s occupation), and also their political views  Still a major determinant of spending habits in for example newspapers: Sun, Daily Mirror – working class, The guardian/Observer – middle class, The Times/Telegraph – middle/upper, upper class

Registrar General’s Scale Categories  I –Professional etc occupations  II –Managerial and Technical occupations  III –Skilled occupations –(N)  non-manual –(M)  manual  IV –Partly-skilled occupations  V –Unskilled occupations

Lifestyle  A relatively new concept used to describe people according to their attitude, class, personality and income  Many strange names given:  DINKY- dual income, no kids yet  Silver surfer - 50 years or older, who frequently surfs the Internet and spends time online  L-Plate Lad: young, single and lives at home with parents  SOPPIE: sensible older person with pension and insurance  SITCOME: single income, two kids, oppressive mortgage

Geo-demographic  Allows businesses to target consumers according to where they live  Assumes that people who live in the same area have similar patterns of behavior  Can be related closely to income levels- e.g. people in a wealthy part of London may go skiing at least once a year  However can also be related to lifestyle – in a particularly wealthy part of London such as Mayfair its accepted that people will go skiing at Christmas

Changes in segments  Businesses will change to meet the needs of the market  Any changes in these segments will make businesses adapt to meet the needs of their customers  E.g. some supermarkets now offer online shopping to reflect the quite recent rise of the silver surfer