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BASES FOR SEGMENTATION: HYBRID SEGMENTATION STRATEGIES

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Consumer Psychology (PSY - 514)
VU
Lesson 16
BASES FOR SEGMENTATION:
HYBRID SEGMENTATION STRATEGIES
2. Hybrid Segmentation Approaches
Marketers often segment markets by combining several segmentation variables rather than relying on one. Three
hybrid segmentations are most popular in this regard:
Psychographic-Demographic Profiles Geodemographic Profiles, VALS, and Yanklovich's mind base segmentation
1. Psychographic, Lifestyle and Demographic Profile
Psychographic (lifestyles) and demographic profiles are highly complimentary, combining the two marketers are
provided with powerful information about their target markets
While designing the Psychographic, Lifestyle and Demographic Profile, marketers must answer the three
important questions, that include:
1. Whom should we target?
2. What should we say?
3. Where should we say it?
To help advertisers answer the third question many advertising media vehicles sponsor life-style research on which
to base very detailed audience profiles
Example A Popular US Magazine
For a popular US Magazine a professional audience research firm conducted a research study to identify
demographic and psychographic lifestyle profiles of the magazine readers. The collected profiles looked something
like:
Demographic Profile
Total Readers
5,227,000
Gender
Men
66%
Women
34%
Age
18-49
62%
25-54
65%
55+
27%
Average Age
45
Education
Attended College or beyond
77%
College graduate or beyond
55%
Occupation
Professional Managerial
34%
Top/Middle Manager
33%
Employed
80%
Income (Annual)($)
75%
50,000 or more
66%
60,000 0r more
50%
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Consumer Psychology (PSY - 514)
VU
75,000 or more
31%
Selected Lifestyle Profile
(Leisure Activities)
Attended movies in the last six months
73%
Bought music CD's/tapes in the last 12 months
46%
Attended live music performance in the last 12 months
29%
Book reading
45%
Entertained friends or relatives in the last 12 months
48%
Household subscribes to cable
69%
2. Geo-Demographic Segmentation
Basic Notion
People who live close to one another are likely to have similar financial means, tastes, preferences, lifestyles and
consumption habits.
Process
Computer software are used to cluster the population into lifestyle groupings based on postal or zip codes.
Clusters are created based upon consumer lifestyles. Specific cluster includes zip codes that are composed of
people with similar lifestyle scattered throughout the country
Using Cluster Data
Marketers use cluster data for:
Direct mail campaigns
Select retail sites
Design marketing strategies for specific market segments
3. Criteria for Effective Targeting of Market Segments
To be an effective target market a segment should be:
Identifiable
Sufficient (in terms of size)
Stable or growing
Accessible in terms of both media and cost
To divide the market into separate segments on the basis of common or shared needs or characteristics that are
relevant to the product or service, a marketer must be able to identify the relevant characteristics. Variables such as
Geography (location) and Demography (age, gender, occupation, race) are easy to identify. Education, income and
marital status can be known through questionnaires. Other characteristics such as benefits sought and lifestyles are
more difficult to identify
Most marketers prefer to target segments that are relatively stable in terms of demographic and psychological
factors and are likely to grow larger over time. Teenagers are sizable and easily identifiable market, eager to buy,
able to spend and easily reachable, yet when a marketer produces merchandise for a popular teenage fad, interest in
it may have waned
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Consumer Psychology (PSY - 514)
VU
4. Implementing Segmentation Strategies
Once an organization has identified it most promising segments it must decide whether to target one segment or
several segments.
Each targeted segment receives a specially designed marketing mix i.e. a specially tailored product, price,
distribution network and/or promotional campaign
Segmentation Implementing Strategies
Differentiated Marketing
Concentrated Marketing
Targeting several segments
Targeting just one segment
Differentiated Marketing is highly appropriate for:
Financially strong companies
Well established in a product category
Competitive with other firms that are also strong in the category (soft drinks, automobiles or detergents)
Concentrated Marketing is an appropriate strategy when:
A company is small or new to the field
A company can survive and prosper by filling a niche not occupied by stronger companies
Gum disease fighting toothpastes
4. Countersegmentation
Some segments concentrate over time to a point where they don't warrant an individually designed marketing
program
In Countersegmentation a company seeks more generic needs or consumer characteristics that would apply to the
members of two or more segments into a larger single segment that could be targeted with individually tailored
product or promotional campaign
Example
Some business schools with wide course offerings in each department were forced to use Countersegmentation
strategy when they discovered that students simply did not have enough available credits to take a full spectrum of
in depth courses in their major areas of studies. They had to use Countersegmentation, e.g. by combining
advertising, publicity, sales promotion and selling course into a single course called promotion
Key Terms of Chapter 3
AIO's (activities, interests, opinions)
Market Segmentation
Benefit Segmentation
Positioning
Concentrated Marketing
Psychographic Inventory
Countersegmentation
Psychographic Segmentation
Demographic Characteristics
Sociocultural Variables
Demographic Segmentation
Use related segmentation
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Consumer Psychology (PSY - 514)
VU
Differentiated Marketing
Usage situation
Geographic Segmentation
Hybrid Segmentation
Mass Marketing
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Table of Contents:
  1. INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer Behavior
  2. INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer research
  3. INTRODUCTION TO CONSUMER PSYCHOLOGY:Marketing Mix, Product, Price
  4. INTRODUCTION TO CONSUMER PSYCHOLOGY:Customer Value, Perceived Value
  5. VALUE AND RETENTION FOCUSED MARKETING AND CONSUMER DECISION MAKING PROCESS
  6. CONSUMER RESEARCH:Quantitative Research, Qualitative Research
  7. MAJOR STEPS IN CONSUMER RESEARCH PROCESS:Design of Primary research
  8. QUANTITATIVE RESEARCH DESIGNS & DATA COLLECTION METHODS
  9. QUANTITATIVE RESEARCH DATA COLLECTION TECHNIQUES:ATTITUDE SCALES
  10. QUALITATIVE RESEARCH DESIGNS & DATA COLLECTION METHODS
  11. CUSTOMER SATISFACTION MEASUREMENT, SAMPLING, AND DATA ANALYSIS AND REPORTING
  12. MARKET SEGMENTATION AND ITS BASES:Geographical Segmentation
  13. BASES FOR SEGMENTATION: DEMOGRAPHIC SEGMENTATION PSYCHOGRAPHIC SEGMENTATION
  14. BASES FOR SEGMENTATION: SOCIOCULTURAL SEGMENTATION USE RELATED SEGMENTATION USAGE SITUATION SEGMENTATION
  15. BASES FOR SEGMENTATION: BENEFIT SEGMENTATION:Intrinsic Cues
  16. BASES FOR SEGMENTATION: HYBRID SEGMENTATION STRATEGIES
  17. MARKET SEGMENTATION IMPLEMENTING SEGMENTATION STRATEGIES ENVIRONMENTAL INFLUENCES CULTURE
  18. HOW CULTURE IS LEARNT ENVIRONMENTAL INFLUENCES:Formal Learning
  19. CULTURE AND ITS MEASUREMENT ENVIRONMENTAL INFLUENCES
  20. MEASUREMENT OF CULTURE ENVIRONMENTAL INFLUENCES:Consumer Fieldwork
  21. SUBCULTURE CHAPTER 4: ENVIRONMENTAL INFLUENCES
  22. AGE AND GENDER SUBCULTURE CHAPTER 4: ENVIRONMENTAL INFLUENCES
  23. BASES FOR SEGMENTATION: BENEFIT SEGMENTATION:Market Segmentation
  24. SOCIAL CLASS CHAPTER 4: ENVIRONMENTAL INFLUENCES:Occupation
  25. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Affluent Consumer
  26. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Membership Group
  27. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Shopping Groups
  28. UNDERSTANDING PERSONALITY CHAPTER 5: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOR
  29. CONSUMER PERSONALITY, TRAIT THEORY AND SELF IMAGES
  30. CONSUMER MOTIVATION:Needs, Goals, Generic Goals
  31. UNDERSTANDING LEARNING:Intentional and Incidental Learning, Implications for Marketers
  32. INSTRUMENTAL CONDITIONING, INFORMATION PROCESSING AND MEMORY
  33. ATTITUDES:Characteristics of Attitudes, Attitudes have consistency
  34. ATTITUDE FORMATION AND CHANGE:How attitudes are learned?
  35. ATTITUDE CHANGE STRATEGIES:Resolving two conflicting attitudes
  36. INTRODUCTION TO CONSUMER DECISION MAKING:Decision Complexity
  37. Problem Recognition, Search and Evaluation and Decision and Purchase
  38. Decision and Purchase:Consumer Decision Rules, Output, Relationship Marketing
  39. Decisions Related to Post Purchase:Product Set up and Use
  40. Marketing Implications of Decisions Related to Post Purchase:Understanding
  41. Post Purchase Evaluation:Determinants of Satisfaction, Consumer Complaint Behavior
  42. Post Purchase Dissonance:Dissonance Reduction, Marketing Implications
  43. Consumerism:Roots of Consumerism, The Nature of Consumerism
  44. Consumerism Issues and Responses:Environmental Concerns, Consumer Privacy
  45. Review Consumer Psychology Course:Consumer Research, Consumerism