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Market Segmentation

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Elvia De Anda

on 10 September 2013

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Transcript of Market Segmentation

Social Class
Better predictor of purchases with symbolic aspects but low to moderate prices
ex. Make-up, alcohol
Better predictor of major expenditures with no symbolic aspects
ex. Refrigerator
Social class and Income
Both needed to predict purchases of expensive, symbolic aspects
ex. New home
Market Segmentation


Show how Psychographics go beyond simple demographics to help marketers understand and reach different consumer segments
Individuals desire to make a statement about their social class, or the class to which they hope to belong, influence the products they like and dislike
Status Symbols
Consumers' lifestyles are key to many marketing strategies
Identifying patterns of consumption can be more useful than knowing about individual purchases when organizations craft a lifestyle marketing strategy
Daniel Ahn, Elvia De Anda, Caroline Lyons, Jordan Odriozola
Other names
Taste public
Consumer group
Symbolic community
Status culture
What does Lifestyle mean?
Refers to the types of consumption choices rather than social class indicators
Defines a pattern of consumption that reflects a person’s choices of how to spend their time and money
The social identity we choose to dictate to others
Did you know?
30% of Americans say their favorite activity is reading, 24% say it is watching TV, and 17% say it is spending time with family and kids
Why does it matter?
Marketers think about lifestyle in terms of how much time we have available to do what we’d like and what we choose to do with our leisure time
Lifestyle marketing perspective recognizes that people sort themselves into groups on the basis of what they like to do and how they choose to spend their disposable income.
Why does it matter?
More than just how we choose to spend our time and money
About who one is in society and who one is not
Group identities form around different types of expressive symbolism

Why does it matter?
Use AIOs (activities, interests, and opinions) to better understand their consumers’ behavior
Attempt to position a product by fitting it into an existing pattern of consumption

How Lifestyle Plays into Group Identities
People in similar social and economic circumstances follow general consumption patterns, but each person adds their own “twist” to the pattern which adds individuality to the lifestyle
Lifestyles Change Over Time

Attitudes change over time regarding physical fitness, social activism, sex roles for men and women, and fashion.
Lifestyles From Products
•Encourage a sense of community among product users

•Choose a product because they associate it with a certain lifestyle

Goal of Lifestyle Marketing

•Allow consumers to pursue their chosen ways to enjoy their lives and express their social identities

•Focus on people who use products in desirable social settings

Lifestyle Terms

•Co-branding strategies: teaming up with other companies to promote two or more items

•Product complementarity: occurs when the symbolic meanings of different products relate to one another

•Consumption Constellation: sets of products consumers use to define, communicate, and perform social rules

Because Demographics alone are not enough
Social Class and
Consumer Behavior

How to Perform Psychographic Analysis
Lifestyle Profile

A Product-Specific Profile

A General Lifestyle Segmentation

A Product-Specific Segmentation Study
Activities, Interests, Opinions (AIOs)
Helps tap into psyche of target market
The shift
Marketplace changes make it tougher to accurately place a consumer in a social class
"Affordable luxuries" are within reach of many consumers
Profound changes in global income distribution have driven this shift
Components of Social Class
Two major ones:
How Do We Use Psychographic Data?
1. Define the Target Market

2. Create a New View of the Market

3. Better Communicate Product Attributes

4. Develop Product Strategy

5. Market Social & Political Issues
Psychographic Segmentation Typologies
Values and Lifestyle System (VALS2)
High Resources/Innovation

Low Resources/Innovation
"Birds of a feather flock together"
Which is the better predictor of consumer behavior?
Behavioral Targeting
E-Commerce Customized Ads

FourSquare & ShopKick Applications

Personalized Retargeting
"Keeping up with the Joneses"
Class Difference in Worldview
Worldview: One way to differentiate among social classes
Working class more intimate and constricted
Wealthy class focus more on long-term goals
Psychographics continued...
Developed in 1960s/70s

Implemented to Address Shortcomings in Motivational & Quantitative Research

Answers not just WHO buys but WHY they buy
Division of Consumers
SBI Consulting Business Intelligence divides consumers based on attitudes toward luxury
1. Luxury is functional
2. Luxury is a reward
3. Luxury is indulgence
It's not enough just to have wealth or fame but more of it than others
Loyalty Programs
Taste Cultures v. Codes
Taste Culture
describes consumers in terms of aesthetics and intellectual preferences
the way consumers express and interpret meanings
Restricted codes
focus on content of objects
Elaborated Codes
more complex

Status Symbols
How do people that bought the real thing react when they see imitations?
Flight - they stop using the brand because they don't want to be mislabeled
Reclamation - they emphasize their long relationship with the brand and express concern that its image will be tarnished
Abranding - they disguise their luxury items in the belief that truly high-status people do not need to display logos
Status symbols vary across cultures
Social Analyst
first discussed the motivation to consume for the sake of consuming
Cultural Capital
Economic Capital
financial resources
Social Capital
affiliations and networks
Cultural Capital
set of distinctive and socially rare tastes and practices

criticized the "decorative" role of women for men to advertise their wealth
expensive clothes
pretentious homes
elaborate hairstyles
Men as trophies?
Online Social Capital
Online community is more desirable when it is able to offer more social capital
The more people involved the better
A Typology of Status Signaling
Patrician (Have Wealth and Low need for status) - signal to each other. They use quiet signals
Parvenu (Have Wealth and High need for status) - associate with other haves and want to dissociate themselves with have-nots. They use loud signals
Proletarian (Don't have wealth and Low need for status) - do not engage in signaling
this may seem primitive but let's consider
parody display - avoid status symbols or seek status by mocking it
People tend to evaluate themselves on
professional accomplishments
material well-being relative to others
coined the terms
invidious distinction - we use things to inspire envy in others through our display of wealth and power
conspicuous consumption - people's desire to provide prominent visible evidence of their ability to afford luxury goods
Conspicuous consumption most evident among
leisure class - people for whom productive work is taboo
owners and controllers of production
idle rich
Loud vs Quiet signals
"loud signals" display brand prominence
those "in the know" can recognize a subtle status marker - these are "quiet signals"
Kwakiutl Indians
Pacific Northwest
potlatch ceremony
shows of wealth by giving away to show his greater status
destroys his own property to flaunt wealth
Poseur (Does not have Wealth, High need for status) - Poseurs aspire to be haves and mimic parvenus
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