By Daniel Yankelovich and David Meer

Presented by
Group 5
Jay Daryani
Prerna Jha
Ruchika Awasthi
Shubham gulati
Tushar Vats
Utkarsh Vidyarthi
In 1964, D. Yankelovich with his article New Criteria for Market
Segmentation asserted that:
Traditional demographic traits (age, sex, education, income)
Non-demographic traits (values, tastes, preferences)
A Sound Marketing Strategy depends on identifying segments that
were potentially receptive to a particular brand/product category.
By 1960s consumers were becoming less predictable in their buying
habit.
Tastes and purchasing patterns no longer aligned with age and
income, thus demographic segmentations lost their ability to guide
companies' decisions.
The attraction & stimulation were starting to focus on things like
status or lifestyles.
 The most accepted research method used for psychographic market
segmentation.
Developed in 1978 by social scientist Arnold Mitchell and his colleagues
at Stanford Research Institute .
VALS through both attitudinal & demographic questions, categorize
adult consumers into 9 lifestyle types:
survivors (4%),
sustainers (7%),
belongers (35%),
emulators (9%),
achievers (22%),
I-am-me (5%),
experiential (7%),
The questions were weighted using data developed
societally conscious (9%),
from a sample of 1,635 Americans and their partners,
& integrated (2%). who responded to an SRI Source: WikiPedia.org
International survey in
1980.
 predicting what & how consumers are likely to
purchase
give any idea of how to keep existing customers or
gain new ones.
does not enlighten companies with significant and
precise information
 Segmentations to develop Segmentations to develop
advertising new products
Populations Users of the product to be Users of related products that
studied advertised already meet similar needs,
partners such as distributors
+ retailers
Data sources Attitude surveys Purchase and usage data on
consumers, supplemented by
surveys; analyses of
consumers finances and
channel preferences
Analytical tools Statistical analysis of survey Analysis of customers who
results remain loyal and those who
switch to competing offerings
Outputs Segments that differ in their Segments that differ in their
responses to a given message purchasing power, goals,
aspirations, and behavior
A
Ameaningful
meaningfulsegmentation dependson
segmentation depends onfinding
findingpatterns
patternsinin your
your
customers actual
customers buying
actual behavior
buying through
behavior throughrelevant
relevantdata
data
Depending on the question you seek to answer, you would need to:
Depending on the question you seek to answer, you would need to:
Gather info about which benefits & features matter to your
Gather info about which benefits & features matter to your
customers
customers
Know which customers are willing to pay higher prices or demand
Know which customers are willing to pay higher prices or demand
lower ones
lower ones
Learn about the advantages/disadvantages customers identify in
Learn about the advantages/disadvantages customers identify in
your offerings
your offerings
Gather data on emerging social, economic & technological trends
Gather data on emerging social, economic & technological trends
Use qualitative research to explore customers underlying motives
Use qualitative research to explore customers underlying motives
& needs
& needs
Use quantitative research to understand completive strengths &
Use quantitative research to understand completive strengths &
opportunities
opportunities
Reexamine the sales data you already have in order to reveal the
Reexamine the sales data you already have in order to reveal the
hidden patterns in customers behavior
hidden patterns in customers behavior
 Armedwith
Armed with such
such data,
data, youyou
cancan fashion
fashion segments
segments that
that are both
are bot revealing
revealing and applicable
and applicable
Such segments will:
Such segments
Reflect will:
the companys strategy;
1. Indicate
Reflect the companys
where strategy
sources of revenue or profit may lie;
2. Indicate where sources of revenue or profit may lie
Identify consumers values, attitudes, and beliefs as
3. they
Identify consumers
relate values,
specifically attitudes,
to product orand beliefs
service as they
offerings;
relate specifically to product or service offerings
4. Focus onactual
Focus on actualcustomer
customer behavior;
behavior
5. Make senseto
Make sense totop
topexecutives
executives;
6. Accommodate
Accommodate or oranticipate
anticipate changes
changes in markets
in markets or or
consumer behavior
consumer behavior
1. What are trying to do:
The goals of CMOs change as they change (leave the company)
CMOs dont understand how segmentation would benefit their companies
strategic decisions:
Identify groups large enough and lucrative to justify pursuit
2. Which customers drive profits:
Companies can rank their existing customers based on profitability
Find new potential customers who have common attributes with their
existing profitable customers (Research is important based on types of data
such as: Demographic, Behavioral, Attitudinal)
3. Which attitudes matter to the buying decision:
Psychographics -Personality traits are not enough (stable) for the buying
decision
Lifestyle attitudes, self-image , aspirations, customers values and
environment crucial because they are constantly changing
4.What are my customers actually doing:
Further research is advised on Customers heaviness of use, brand switching,
retail format and channel selection
Before a product launch use of laboratory simulations e.x. conjoint analysis.
It involves presenting the customers with combinations and features and try
to find out how interesting those features are, how willing are the
customers to pay and at what price

5.Will the segmentation make sense to senior management:

Only if it simply disseminated, and justified

6.Can our segmentation register change?

Yes, but when is it part of an ongoing process and not a one-time effort,
because:
Consumers needs, attitudes and behavior can easily change
Markets are changing (new technologies, emerging consumers niches,
fluctuating economics)
 Is a tool that can facilitate identifying which specific expectations,
motives or concerns lie behind a consumers particular behavior or
transaction.
We can perceive it as a continuum, where any product, purchase
activity, attitude or incentive can be positioned upon the following
axis:Low High
Middle
End End

Low/Shallow End: consumers are seeking products/services with low

perceived cost & risk, which they think will save them time, effort or
money (i.e. toilet paper, credit card).

Middle: consumers are actively concerned, but for issues such as

design, status, quality or complexity. (i.e. car, pc)

High/Deep End: consumers emotional investment is great & their core

values are actively engaged. (i.e. health care issues)
1. Motives: small-daily decisions for items which are seen
as non-investment purchases and give little but
significant value as an extra touch (Razor example and
its expansions-editions)
2. Concerns: thoughts which drive customers behavior
and come from cultivation-own philosophy for life
(Toyota hybrid cars and the environmental concern)
3. Emotions: totally personal factors which influence
consumers behavior. Cannot be characterized as
clever or nonsense purchases but as beneficial or
harmful investments. Need of the highest value
(CCRCs- to avoid being a burden on their loved ones)
 Issues the business
wants to address
-Whether to make small
improvements to existing
Shallowest Products
-How to select targets of a
decisions
media campaign
-Whether to change prices
-How to position the brand
Middle-of- -Which segments to
the pursue
-Whether to change the
spectrum
product fundamentally
decisions -Whether to develop an
entirely new product
-Whether to revise the
business model in
Deepest response to powerful
Consumers concerns What the segmentation
should try to find out
-How relevant and -Buying and usage
believable new-product behavior
claims are -Willingness to pay a
-How to evaluate a given small premium for
product higher quality
-Whether to switch -Degree of brand
products loyalty
-Whether to visit a clinic -Whether the
about a medical consumers being
condition studied are do-it-
-Whether to switch ones yourself or do-it-for-me
brand of car -Consumers needs
-Whether to replace an -Their social status,
enterprise software self-image, and lifestyle
system
-Choosing a course of -Core values and beliefs
medical treatment related to the buying
-Deciding where to live decision
 Different starting points means different applied
segmentation.
objectives, goals, situation, conditions, overall strategy
Effective segmentations focus on just one or two issues, and
they need to be redrawn as soon as they have lost their
relevance.
Be specific, definite & constantly revised/reviewed
Only with the appropriate in each case, precise data,
someone can invent or reach revealing, actionable &
applicable segments.
Combine demographic & psychographic analysis in a
situation-specific, moderate & well-balanced way.
Consumers mindset vs Consumers behavior: not excessive interest or
too little emphasis on any of each side