1. Segmentation Schemes  Mutually exclusive - separate from all others  Exhaustive - everyone must have an appropriate group  Measurable - size, purchasing power & profiles must be measurable  Substantial - each segment should have a significant membership  Actionable - can be reach through media  Mutually exclusive - separate from all others  Exhaustive - everyone must have an appropriate group  Measurable - size, purchasing power & profiles must be measurable  Substantial - each segment should have a significant membership  Actionable - can be reach through media

2. Benefits of segmentation  Valuable insight into product/service design to reflect market demand  Gives direction to advertising messages  Yields cost savings from accurate promotional message placement  Enables focusing on competition’s strengths/weaknesses by reducing variables  Fosters production of informed strategic marketing plans  Valuable insight into product/service design to reflect market demand  Gives direction to advertising messages  Yields cost savings from accurate promotional message placement  Enables focusing on competition’s strengths/weaknesses by reducing variables  Fosters production of informed strategic marketing plans

3. Determine target audience 1.Undifferentiated marketing – shotgun 2.Differentiated - targets multiple segments with different incentive and message 3.Differentiated single segment (“Niche marketing” targets small groups of specific audiences members.) 1.Undifferentiated marketing – shotgun 2.Differentiated - targets multiple segments with different incentive and message 3.Differentiated single segment (“Niche marketing” targets small groups of specific audiences members.)

4. Demographic segments  Baby boomers - use benefit segments  Generation Y - diversity, high income, computer literate  Teenagers - online sharing  Geodemographics - use of PRIZM lifestyle segments by zip code  Millenials  Baby boomers - use benefit segments  Generation Y - diversity, high income, computer literate  Teenagers - online sharing  Geodemographics - use of PRIZM lifestyle segments by zip code  Millenials

5. Psychographic segments  Lifestyles, patterns of behavior  AIO (Activities, Interests, Opinions)  VALS (psychocentric, midcentric, near allocentric, allocentric)  Cohort segments - grew up at the same time; life stages  Lifestyles, patterns of behavior  AIO (Activities, Interests, Opinions)  VALS (psychocentric, midcentric, near allocentric, allocentric)  Cohort segments - grew up at the same time; life stages

6. Global Lifestyle Segments  Teens  Gender  Religious  Symbolic capital – status (Financial, Social, Cultural capital)  Ethnic  Teens  Gender  Religious  Symbolic capital – status (Financial, Social, Cultural capital)  Ethnic

7. Generic segmentation factors  Usage - rate, occasion-based, loyalty status (80/20 rule, RFM)  Price  Benefits Segment Benefit message Teens socialize w/o parents Tourist cultural exposure Employeeschance to be outside  Usage - rate, occasion-based, loyalty status (80/20 rule, RFM)  Price  Benefits Segment Benefit message Teens socialize w/o parents Tourist cultural exposure Employeeschance to be outside

8. Aesthetic segmentation  Stimulation: thrilling, awesome  Realism: working class  Conventional sex identity: macho  Shapes of round and curved: visual stimulation  Social status orientation  Seriousness vs frivolity  Stimulation: thrilling, awesome  Realism: working class  Conventional sex identity: macho  Shapes of round and curved: visual stimulation  Social status orientation  Seriousness vs frivolity

9. Segmenting by action  Prosumers - consumers help design products, reject traditional ads, use Internet research  Professional  Producer +Consumers  Producing  Proactive  Prosumers - consumers help design products, reject traditional ads, use Internet research  Professional  Producer +Consumers  Producing  Proactive

10. Qualitative Approach -Persona segmentation  Consumer models = personas or archetypes  Qualitative analysis of user behavior  Reveal motivations and potential usage patterns  Consumer models = personas or archetypes  Qualitative analysis of user behavior  Reveal motivations and potential usage patterns

11. Niche Markets  Special interest groups  Immigrants and expatriates for homeland news  Addresses needs and wants of special segments with directed promotional messages  Special interest groups  Immigrants and expatriates for homeland news  Addresses needs and wants of special segments with directed promotional messages

12. Questions for discussion  What is the value of cohort segmentation for targeting mature consumers for a vacation destination and why?  When would you use PRIZM vs. MOSIAC for promotion purposes?  What new market segments may emerge for future global audiences?  What is the value of cohort segmentation for targeting mature consumers for a vacation destination and why?  When would you use PRIZM vs. MOSIAC for promotion purposes?  What new market segments may emerge for future global audiences?