Segmentation BA Fall 2000

How can we recognize and address heterogeneity in the market? What are some major bases for segmentation? n Segmentation focuses attention n Life style or psychographics n Benefits n Usage n Age n People may resist targeting if they feel it stigmatizes them (age, single status)

How can we use lifestyle to better address consumers? n Focus on how rather than what to communicate – Appropriate people, products, settings n Develop customer types (e.g., VALS2; Mobil) n Examine lifestyles of specific customer targets n Use for ad context, media selection, communication style

How can we segment customers based upon benefits sought? n Benefits focus on fundamental issue of why consumers buy - what to say rather than how n Groups differ in relative importance of benefits (e.g., four-wheel drive vehicles), can attempt to provide comprehensive benefits (Colgate’s Total toothpaste)

Can we make use of usage to segment our market? n Whom do you target - heavy, light, or non-users? – Reasons for usage level are critical – Untapped potential may differ depending on the kind of product (e.g., toothpaste vs. yogurt vs. compact disks) – Can involve the importance of reaching various segments (e.g., non-users and public/not-for-profit)

What are some important issues in using age segmentation? n Age cohorts share many experiences, values, beliefs (e.g., depression cohort) – Verisimilitude becomes important in communications, trends can be difficult to assess (e.g., teens) n Can design products to track cohorts' needs as they age – Baby boomers - Toyota, Dockers n Maintaining relationships through age transitions can be hard n Controversy over gender segmentation depends on age (e.g., new Toys “R” Us toy sections)