Segmentation Variables

Segmentation Variables are characteristics of individuals, groups, or organizations used to divide a market into segments.  To select a segmentation variable, several factors are considered. The segmentation variable should relate to the customer’s needs for, uses of, or behavior toward the product. Segmentation variables can be grouped into four categories: demographic, geographic, psychographic, and behavioristic.

“Demographic variables include age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, and social class”. Because income strongly influences people’s product needs, it often provides a way to divide markets. Income affects people’s ability to buy and their desires for certain lifestyles. Product markets segmented by income include shoes and recreational vehicles. I am the parent of three beautiful, intelligent and respectful teenage girls that love to stay in style.

I selected “shoes” as one of my demographic variables because I find that my families’ choices of shoes are geared towards style, color, and price. I have always purchased Nike Shox for the girls because they provide a lot of support and hold together very well but are expensive ranging from $80 to $110 in price. I also choose “recreational vehicles” as a demographic variable because of our family size. I use to have a Yukon but due to my job travel requirements the wear on my truck, maintenance (mileage, tires) was becoming very expensive, so I sold the Yukon and purchased a smaller SUV with no space for my family.

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My husband bought a new 2009 Ford F150 and now we have more room to take trips, haul children around and stretch out. Families have to adjust accordingly as well as they can while remembering what they can afford. Shoes and recreation vehicles are just two or millions of marketing opportunities. “Geographic variables include region, urban, suburban, and rural, city size, county size, state size, market density, climate, and terrain. Customer product needs are influenced by climate, terrain, city size, population density, and urban/rural areas.

” “Climate is commonly used as a geographic segmentation variable because of its broad impact on people’s behavior and product needs. ” When I plan a vacation, I take the time to plan going somewhere that have beautiful scenery, long sandy white beaches, clear blue water and allows relaxation and little interruption. Marketers count on tourists like me to forget cameras at home because that means revenue for the marketer when I have to buy a new camera to capture memories.

Another geographic variable (could also be a psychographic variable) is deciding where you will stay, what hotel will you choose that is as equally comfortable and relaxing as your scenery and meets your lifestyle requirements? Larger cities may allow you to find a five star hotel but in smaller cities you might only find a mom and pop hotel, this is due to “market density which refers to the number of potential customers within a unit of land area, such as a square mile. Although market density relates generally to population density, the correlation is not exact."

“Psychographic variables include personality attributes, motives, and lifestyles. ” Marketers appeal to positive or favorable personal characteristics to influence the purchase decision, they use individuals’ differing purchases to evaluate lifestyles according to how individuals choose to spend their time in various activities, their income, their interest and opinions, and their education. When appealing to a personality characteristic, a marketer almost always selects one that many people view positively.

Individuals with this characteristic, as well as those who would like to have it, maybe influenced to buy that marketer’s brand. “Marketers taking this approach do not worry about measuring how many people have the positively valued characteristic; they assume a sizable proportion of people in the target market either have it or want to have it. ” Personal appearance, affiliation, status, safety, and health are examples of motives affecting the types of products purchased and the choice of stores in which they are bought. For example, what happens when you see someone with a really cool pair of shoes? Read about iPhone segmentation

You find out where they got them and you buy them. Magazines are a huge status quo where I work such as Wall Street Journal and Forbes. com, these magazines are individual preferences and marketers count on that preference for a profit. “Behavioristic variables include volume usage, end use, benefit expectations, brand loyalty, and price sensitivity. ” Benefit segmentation involved the division of a market according to benefits that customers want from the product, Individuals purchase and use products that provide them with benefits that meet their needs.

“Effective segmentation requires benefits of the product be identifiable, benefits actually divide market into segments, and one or more segments be accessible to the marketing”. Recreational vehicles such as four-wheelers can be used a lot in open land but will be utilized very little in a crowded city. Our family rides the sand dunes with our truck and four wheelers but unfortunately when we come back home, everything just sits because we have no place to ride them, kind of a waste.

Magazines are also targeted to behavioristic variables. There are several types of magazines that are produced by marketers with the intention of targeting key lifestyles such as Glamour magazine for those that want to read up on fashion, beauty, hair, and makeup. Or there’s People, US magazine, The Enquirer for those that like to read the not so true but funny. I remember reading Readers Digest when I was young and it’s still around! That marketing team has been trained well.

Please find below two segmentation variables for each of the listed products and a brief explanation as to why I think they relate to the product. This information was previously listed above.  Shoes- Behavioristic Segmentation because people tend to buy shoes on a regular basis or for a special occasion. People are also very loyal to brands; if they find a running shoe that they like they will buy that shoe again and if that shoe is discontinued they will do anything to find it online or in another store.

Geographic Segmentation because if you are planning a trip to a place with rough terrain you want to make sure that you have tennis shoes vs. high heels. And if you live near a beach you want to make sure that you have sandals vs. hiking boots.

Cameras- Behavioristic Segmentation because people have brand loyalty. When they find something that works and it is dependable then they will buy the same brand time and time again.  Geographic Segmentation because region and climate (Bahamas) would tend to make people want to take more pictures. If you have a great backdrop for pictures you might want to capture that scene vs. a backdrop that doesn’t interest you (junkyard).

Magazines- Behavioristic Segmentation because some magazines are holiday or event specific. Some magazines are available at the checkout counter and due to the readiness to buy them people pick them up out of curiosity and some buy them. Psychographic Segmentation because there are magazines produced for interest in cars, exercise, hair cuts, latest trends in fashion, for sale ads, and current community events. Marketers are trying to capture individual interests.

Hotel Accommodations-Demographic Segmentation because these include age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, and social class. If you’re going on vacation with a family of five, you have to find a hotel room big enough for all five of you which can sometimes prove to be challenging. But, if there are only two of you, the chances of finding a hotel to accommodate your needs are less likely to be a hassle.

Psychographic Segmentation because people with children may want to stay at a hotel that offers amenities’ such as an indoor water park, lobby activities for children or a petting zoo on the grounds (Kalahari resort). Older people on the other hand may look for an area that is low-key, possibly high priced that fits their interests and is a value for there money depending on their lifestyles. – Recreation Vehicles o Psychographic Segmentation because you tend to see higher paid individuals driving around in expensive cars, maybe it makes them feel important.

But, Marketers appeal to positive or favorable personal characteristics to influence the purchase decision; they use individuals’ differing purchases to evaluate lifestyles according to how individuals choose to spend their time in various activities, their income, their interest and opinions, and their education. o Demographic Segmentation because someone older (baby-boomers) will buy a huge motor home to possible retire in and travel while a younger (Generation X) individual may opt for a “RentME” motor home to travel to a Nascar race. The individuals’ social statistic and socioeconomic status play a big part of Demographic variable.

Works Cited

1. Pride/Ferrell, (2006), Target Markets: Segmentation and Evaluation, Marketing Concepts and Strategies, p. 209). pp. 203-127, Boston New York
2. Houghton Mifflin Company Pride/Ferrell (2003). Target Markets: Segmentation and Evaluation ch8 [PowerPoint slides]. Retrieved from online. pcdi. com, BU320_Assignment_04; Houghton Mifflin Company

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