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02a Segmentation and Consumer Profiling


									 Segmentation /
Consumer Profiles
• As marketers and business people, we will sell our
  products to whomever will buy it
              • wedding gowns to seniors

              • Retirement funds to a teenager

 • Yet these aren’t our “most likely customers” we need
   to optimize our marketing dollar….let’s get the
           “the most bang for the buck”
• Everyone has unique physical features, personality,
  values, beliefs, geographic location and history

• These differences are demonstrated by the daily
  decisions and behaviors these different people do

• As a marketer, the more we know about our potential
  customers, the better we are able to anticipate or
  influence their buying decisions
• Marketers therefore create “Consumer Profiles” of the
  kind of people most likely to be attracted to a specific

• Each identified group of consumers with common
  characteristics and buying habits is called a “consumer
  segment” which is accomplished through the process
  of “segmentation”.
• Once identified, marketers will focus their efforts on
  trying to reach and influence these segments

 • For some products, there may only be one
   segment….for others there may be multiple segments

 • Examples:

        – One segment:         Wedding Gowns (females, 20-30, getting married)

        – Multiple segments:   Levi Jeans (how you sell jeans to teens is different than
                               middle age, etc.)
Let’s look at how this is done……...
• Categorizing potential consumers in this way enables
  marketers to direct their efforts toward a target
  market, a specific group of consumers who will be
  most interested in their product

• The study of obvious characteristics that categorize

• These characteristics include age, gender, family life
  cycle, income level and ethnicity and culture

• Each characteristic is then subdivided into variables
  or ranges
Let’s look at each of the main variables………
        A. Age

• Depending on the market, people are
  grouped into various groups

• Stats Canada divides the population as such:
      • 0-15, 15-24, 25-44, 45- 64, 65-74, 75+

• Depending on the product / service, marketers need to
  determine the age group that will most likely
  purchase their product
 B. Gender

• The classification of the population into either male
  or female
• Marketers must determine whether the target market
  for their product or service is mainly male, female or
  both and strategize accordingly
       • Ie:
               • Male – Cologne, Tools, Cars, Football
               • Female – Perfume, Purses, Romantic Novels
               • Both – Groceries, Gas, Movie Rentals
C. Family Life Cycle

• A consumer’s stage in the family life cycle determines many
  of his or her wants, needs and purchasing patterns

• Businesses use this demographic to determine who buys what
  for whom

         • Ie:
             • New Family – diapers, baby food

             • Older Family – Ipods, computers
Examples of Family Life Cycle Stages

 • Single
 • Married (no children)

 • Family (young children)

 • Family (older children)

 • Empty Nesters (children left)

 • Retirees
D. Income Level

• Grouped by how much money the targeted
  consumer earns

• Allows marketers to determine how many consumers can
  afford their product / service

• In Canada, the average gross family income (before taxes) in
  2008 is $ 90,000
• Based upon these statistics, marketers can generally
  define the Canadian population into the following
  income segments:

        • Wealthy / Affluent ($ 150,000 +)

        • Middle Income ( $ 50,000 - $150,000)

        • Lower Income ( $ 50,000 or less)
E.   Ethnicity & Culture

•    It is vital for a marketer to understand the ethnic and cultural
     differences of their market

•    Marketers must design their marketing strategy to appeal to
     their target market, yet make sure they don’t offend them

     Ie… Wedding Gowns
           –   In our western culture, white is the norm
           –   In India and parts of China, red is worn for “good luck”

•    Understanding our target market’s culture is essential to
     marketing success
• A system of measuring consumers’ beliefs, opinions, and

• A way of profiling consumers on the way they “think”…

• IE:

        • Religious beliefs, lifestyle, musical tastes, attitudes, etc.

• They are much harder to measure, yet they are vital in creating
  an effective customer profile
• A system of measuring “where” consumers live
• Do your customers live:

       • in a rural / urban / suburban area?
       • Do they live in “pockets” or concentrations in certain

              • tractors – rural Canada
              • Indian Cuisine – focus on areas of high Indian population
              • Toronto Raptors – focus on urban / suburban GTA
What is the target consumer for People magazine?

 Profile Category   Profile Group       Targeted Consumer
                    Family Life Cycle
Profile Category   Profile Group       Targeted Consumer
Demographics       Age                 25-40
                   Gender              Female
                   Income              Middle
                   Family Life Cycle   Single or Married, No Children
                   Culture             ‘Western’ culture oriented.
                                         Hollywood references.
Psychographics     Lifestyle/Values    Watches movies and television.
                                       Follows fashion. Buys name
Geographics        Country/City        North America, urban / suburban
A business will obviously sell their product to whomever
  they can, yet they need to focus their marketing efforts on
  those who are most likely to buy it

• However, if a marketer is able to effectively profile their target
  market, they can then begin to create a marketing plan that
  focuses on that “target”

• Although this doesn’t guarantee business success, your chances
  are much greater with a well reseached and targeted customer
The End !!

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