Segmentation Activity – This activity will count as a participation grade.
Purpose: To identify a demo/psychographic profile using a zipcode locator tool.
Background: Marketers traditionally referred to geographic and demographic characteristics as the primary bases for dividing consumers into market segments. Still, they have long recognized the need for fuller, more lifelike portraits of consumers in developing their marketing programs. As a result, psychographic segmentation became a useful tool for gaining sharper insight into consumer purchasing behavior.
Psychographic segmentation is defined as differentiating population groups according to values and lifestyle factors that are common to the group. Consumer lifestyles include attitudes, values, social activities, media usage habits, and more. Psychographic segmentation is a good supplement to demographic and geographic segmentation.
Example: Using Psychographics – If BMW had data indicating that households with incomes over $200,000 were most likely to buy, this would represent a demographic variable. As a result, they could layer on geographic segmentation by identifying the zip codes in the United States with the highest concentration of these households. This doesn’t necessarily help BMW design a promotional campaign. However, a psychographic profile might indicate that these households are more likely to subscribe to the Wall Street Journal, shop at Whole Foods, and watch The Voice. This additional psychographic information would help BMW know where to run ads and what to say in those ads.
Marketers may also utilize PRIZM, an industry-leading segmentation service that blends research on demographics, consumer lifestyle behavior, media usage, and shopping habits to divide every U.S. household into 66 segments. PRIZM data can help marketers plan new products, select distribution channels, and create advertising campaigns targeted to the segments most likely to purchase their product.
Instructions: Answer the following questions below (a minimum of 250 words total)
1. Visit ClaritasLinks to an external site. to explore PRIZM segments by looking up two zip codes of your choice (the page may take a few minutes to load as there is a huge amount of data). These are segments created by one of the largest market research firms in the world. What are the two zip codes you chose and their city and state?
2. Choose a PRIZM segment (e.g., Movers and Shakers) with each zip code area of your choice (the page may also take longer to load). What are the two PRIZM segments you chose?
3. Write a comparison and contrast analysis of the two segments based on the five bases of demographic AND psychographic segmentation (attitudes, values, social activities, media usage, etc.)
4. Do you see yourself in either of the chosen segments? Explain why or why not.
5. How do these segmentations impact the creation of a marketing plan?
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