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Keywords Brands, Market segmentation, Demographics, Psycho graphics
Abstract A multi-segmenting methodology is proposed for comparing the segmenting capabilities of segmentation variables and providing complete market segmentation information. Demographic and psychographic variables based on the differentiation of consumer brand preference were used to elicit the characteristics of market segments. In a comparative evaluation, the multi-combination variables of demographic segmentation exhibited market-segmenting capabilities equivalent to those of psychographic segmentation. The purpose of this research is utilizing multiple segmentation variables to identify smaller, better-defined target sub-markets for enhancing business competitive advantages.
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Taxonomy of consumption patterns
Introduction
The purpose of market segmentation is to identify the taxonomy of consumption patterns by dividing a market into several homogeneous submarkets. Marketers can formulate product strategies, or product positions, tailored specifically to the demands of these homogeneous sub-markets. Homogeneous sub-markets are defined by predetermined segmentation variables. Traditional demographic variables, such as gender, age, income, and education, can be used to explain the characteristics of the sub-markets and classify the key factors of a market segment. Traditional demographic variables, however, cannot identify the complete characteristics of the submarkets because consumers in the same demographic group have very different psychographic makeups (Kotler and Armstrong, 1999). Based on the differentiation of consumer's brand preference, this study divides consumers into homogeneous groups using psychographic variables through the classification in VALS2 (values and lifestyles) and LOV (list of values) systems and demographic variables and then compares the relative usefulness these two different segmentation variables to marketers.
Concept of market segments
Literature review
Smith (1956) first introduced the concept of market segments, which has become an integral part of modern marketing. A market segment is a group within a market that is clearly identifiable based on certain criteria. Consumers within such a sub-market are assumed to be quite similar in their needs, characteristics and behaviors.
Pride and Ferrell (1983) devised the market segmentation process of dividing a market into several market groups. Consumers in each market segment have similar product needs. Each segment...