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Demographic Segmentation.docx

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MKT 2210
Subbu Sivaramakrishnan

Demographic Segmentation - Demographic segmentation: Dividing the market into groups based on demographics variable such as sex, age, family size, family life cycle, income, occupation, education, religion, race, and nationality. - Demographic factors are the most popular bases for segmenting customer groups. One reason is that customer needs, wants and usage rates often vary closely with demographic variables. Another s that demographic variables are easier to measure than most other types of variables. - Table 7-1 Major Segmentation Variables for customer markets (231) Age and life cycle - Age and life cycle: Dividing the market into different age and life cycle groups. - Customer needs and want change with age. Gender - Gender segmentation: Dividing a market into different groups based on sex. Income - Income Segmentation: Dividing a market into different income groups. Psychographics Segmentation - Psychographics segmentation: Dividing a market into different groups based on social class, lifestyle, or personality characteristics. Behaviour Segmentation - Behaviour Segmentation: Dividing marketing into groups based on customer knowledge, attitudes, use, or response to a product. - Occasion Segmentation: Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use their purchase item. Benefit Sought - Benefit Segmentation: Dividing the market into groups according to the different benefits that customers seek from the product. User Status - Markets can be segmented into groups of non-user, ex-users, potential users, first-time users, and regular users of a product. Usage rate - Marketers also can be segmented into light, medium, and heavy user groups. Heavy users are often a small percentage of the market, but account for a high percentage of total buying. Loyalty Status - A market can be segmented by customer loyalty. Some customers are completely loyal-they buy one brand all the time. Others are somewhat loyal- they are loyal to 2 or 3 brands of a given product or favour one brand while sometimes buying others. Still other buyers show no loyalty to any brand. They either want something different each time they buy or they buy whatever is on sale. Segmenting Business Markets - Table 7-3 Major Segmentation Variables for Business Markets - Within the chosen industry, a company can further segment by customer size or geographic location. - Within a target industry and customer size, the company can segment by purchase approaches and criteria. - Programmed buyers à they buy the products as a routine purchase, usually pay full price, and accept below-average service. - Relationship buyers à these buyers regard packaging products as moderately important and are knowledgeable about competitors’ offering. They prefer to buy from a retailer as long as its price is reasonably competitive. They receive a small discount and a modest amount of service. - Transaction bu
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