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BASES FOR SEGMENTATION: DEMOGRAPHIC & PSYCHOGRAPHIC SEGMENTATION

OBJECTIVES:

UNDERSTANDING

• Demographic Segmentation
• Age
• Age Effect
• Cohort Effect
• Gender
• Changing Sex Roles
• Marital Status
• Stages of Family
• Family Life Cycle
• Income
• Education, Age, Income
• Psychographic Segmentation

Market consists of people, People – who are inhabitants of a certain place (e.g. city, province or country), are called population. Population can be seen in terms of many of its characteristics Demographics is a way to describe population in terms of its defining characteristics

Includes vital and measurable statistics of a population, demographic characteristics such as age, sex, marital status, income, occupation and education are most often used as the basis for market segmentation

Demographics help locate a target market. Psychological and Sociocultural characteristics help to describe how its members think and how they feel

Variables of Demographic Segmentation

Demographic Segmentation is is usually based upon the following variables:

• age
• gender (male/female)
• income • occupation
• education
• household (family – style) size

1. Age

Age is an obvious way to divide the market into segments since so many products are based upon “time of life”

a.Diapers are for babies

b.Toys are for children

c.Entertainment for “over 19”

Two kinds of effects are important to notice while considering the age factor in segmentation. These include:

a.Age Effect

b.Cohort Effect

a. Age Effect

Age effect includes occurrences due to chronological age. Examples of the age effect are heightened interest in leisure travel that often occurs for people (single, ,married) during the middle age (particularly in their late fifties or early sixties)

a. Cohort Effect Occurrences due to growing up in certain time periods are called the Cohort Effect. This is captured by the idea that people hold onto interests they grow up to appreciate.

2. Gender

Gender is an obvious way to divide the market into segments since so many products are gender-specific

• Cosmetics Industry
• Clothing
• Medical products
• Sports products/services

• Entertainment Men on the other hand have been the users of
• Psychographic Segmentation is lifestyle, social class, and personality-based segmentation.. Psychographic profile of a consumer is composite of:
• Attitudes
• Interest
• Opinions

This is commonly referred to as (AIO’s)

AIO Research

AIO research seeks consumer responses to a large number of statements that measures:

• Activities How the consumer or family spends time (Pakistani consumer & family)
• Interests Consumers’ family preferences and priorities (Home, fashion, food)
• Opinions How the consumers feel about a wide variety of events and political issues, social issues, and state of economy

AIO Psychographic Inventories

AIO Psychographic Studies use Psychographic Inventory which is designed to identify relevant aspects of consumers’ personality, buying motives, interests, attitudes, beliefs and values Example I am generally open to considering new practices and new technology

Portion of AIO Inventory used to identify “Techno Road Warriors”

Techno Warriors: business people who spend a high percentage of their work week on the road, equipped with laptops, cellular phones, electronic organizers

Psychographic Inventory Please read each of the following statements and place an “X” in the box that best indicates how strongly you “agree” or “disagree” with the statement

Hypothetical Profile of the “Techno Road Warrior”

• Goes on the internet more than six times a week
• Sends and/or receives 15 or more e-mail messages/week
• Regularly visits websites to gather information and/or to comparison shop
• Often buys personal items via internet
• Belongs to several reward programs (frequent flyer programs, rent-a-car programs and hotel programs)

Results of Psychographic Studies are frequently reflected in firm’s marketing messages