Targeting Research: Segmentation

Birds of a feather flock together, i.e. people with similar characteristics tend to exhibit similar behaviors

Characteristics on which to segment include:– Demographics– Geographics– Psychographics– Attitudes and behaviors relevant to a brand of

product category

Demographic Segmentation

Age: only useful when appropriate ranges are used to define age group segments

Too broad (18-45) blurs differences between segments Too narrow (18-20) results in too many small segments

Gender Household characteristics Life stage: combination of all of the above (see page

447) Race and Ethnicity Social Class: comprised of education, occupation,

and income

Geographic Segmentation

Region– East, North, West, South– Pacific, Mountain, West North Central, West South Central,

East North Central, East South Central, South Atlantic, Middle Atlantic, New England

Population Size– MSA, PMSA, CMSA

Population Density Climate

Psychographic Segmentation

Attitudes and Values– Different attitudinal segments typically require

different advertising messages– Different attitudinal segments often have different

media habits, requiring different media plans

Motivations– Reasons for purchase, i.e. pregnancy tests

Lifestyle

Category and Brand Related Attitudes and Behaviors

Product Usage– Brand usage– Product usage– Quantity of consumption– Situation of consumption

Brand Loyalty Benefit

Performing Segmentation Research (figure 19.2, p. 456)

Determine basis for segmentation and descriptive variables– Segmentation variables are the variables used to create subgroups, or

market segments– Descriptive variables are used to describe differences between the

subgroups Identify range of segmentation and descriptive variables Collect data Form groups using cluster analysis Describe each cluster or segment using descriptive variables

– Radar charts are very useful for this Name and describe each segment Relate segments to particular brand behaviors Select a segment to target

Determine the Basis for Segmentation

Select segmentation variables– Relevant to product category– Related to category, product, or brand related

perceptions or behaviors– Have a high likelihood of being causal factors of

category , product or brand choice and usage

Identify Descriptive Variables

Equivalent of dependent variables Used to further describe or identify segment

members Necessary to provide an understanding of

the internal characteristics of each segment

Identify the Range of Segmentation and Descriptive Variables

There are no “Standard” categories or ranges for segmentation variables– Specific to the researchers informational needs

Language use Use to guide content and form attitude or

other scales

Sample and Survey the Population

Random or stratified random sampling

Mail or telephone surveys

Typically likert scale questions

For groups using cluster analysis

Respondents with similar patterns of response to segmentation variables are placed in the same group

Frequencies (cross tabs) on segmentation variables used to summarize differences between groups

Use a radar chart to present a better descriptor of segments

Example Radar Chart from Table 19.5 data (partial)

0

10

20

30

40Survival

Housing

Functionality

Entertainment

Security

Status

Belonging

Nurturance

Final Steps

Describe each sentence in narrative, without using the numbers

Describe segments further based on descriptive variables

Relate Segments to Brand specific behaviors Select a segment

Cluster Analysis in SPSS

Identify segmentation variables– Be sure to tell SPSS to save cluster assignments as a

variable

SPSS automatically cross-tabulates data on each segmentation variable for each cluster

Identify defining characteristics for each cluster, now called a segment

Compare meaningful descriptive variables across segments

Group Practice

Page 479, Exercise #3

Each group pick three product categories For each, determine the most important

segmentation type Identify at least four segmentation and descriptive

measures Craft the specific items to measure those variables

Q-Methodology

Method of targeting using a large set of statements (q-sample) that respondents are asked to rank based on their agreement with the statements

Factor analysis is used to identify groups Typically results in groups based on

perceptions and attitudes

Q-Methodology Process

Develop, Edit, and Select Q-sort statements Select type of sort Determine Sample Characteristics Create Instructions Administer and Record the Sort Analyze data Apply findings to decision

Selection of statements

Prior projects Prior survey research Responses to open ended, in depth interview

questions Volunteered comments in focus groups Responses to projective stimuli such as

sentence completion and picture projection Brainstorming or idea-generation sessions

Statement Selection

Range of statements– Must be unbiased, i.e. same number of positive,

negative and neutral statements– If more than one concept, equal number of

statements for each concept

Item appropriateness Item Clarity Item independence

Types of Q-sorts

Forced– A predetermined number of cards are to be

placed on each point of the scale

Unforced– Any number of statements may be placed on any

point of the scale

Little agreement about which type is better, so use whichever you prefer

Select the sample

Due to the difficult nature of the task, samples tend to be small, yet representative of the population– Number of popluation variables that are important– Number of required replications (between 3-5)– See table 20.1, page 493

Create Instructions, Administer Sort

Establish and communicate sorting criteria– “sort the statements to reflect how much you think

each is ‘most like my point of view’ or ‘most unlike my point of view’.”

Record placement of each statement using numerical scale position– Depending on the number of statements, you may

have anywhere from 7 to as many as 11 points on the scale

Analysis of Q-sort data

Variables are individuals, cases are statements Factor analysis then groups the individuals Examine attitudinal characteristics by comparing

mean scores of individual statements across factors (groups)

Once group attitudes are identified, demographics, brand related behaviors or other salient characteristics of individuals in each group are compared

Group Practice

Page 501-502 Application exercises 1, 2, and 4