Page 239 - Marketing Management

216 PART 3 CONNECTING WITH CUSTOMERS

TABLE 8.2 Examples of PRIZM clusters

• Young Digerati. Young Digerati are the nation’s tech-savvy singles and couples living in fashion-
able neighborhoods on the urban fringe.Affluent, highly educated, and ethnically mixed, they live
in areas typically filled with trendy apartments and condos, fitness clubs and clothing boutiques,
casual restaurants, and all types of bars—from juice to coffee to microbrew.
• Beltway Boomers. One segment of the huge baby boomer cohort—college-educated, upper-
middle-class, and home-owning—is Beltway Boomers. Like many of their peers who married
late, these boomers are still raising children in comfortable suburban subdivisions and pursuing
kid-centered lifestyles.
• The Cosmopolitans. Educated, midscale, and multiethnic, The Cosmopolitans are urbane
couples in America’s fast-growing cities. Concentrated in a handful of metros—such as Las
Vegas, Miami, and Albuquerque—these households feature older home owners, empty nesters,
and college graduates. A vibrant social scene surrounds their older homes and apartments,
and residents love the nightlife and enjoy leisure-intensive lifestyles.
• Old Milltowns. Once-thriving mining and manufacturing towns have aged—as have the
residents in Old Milltowns communities. Today, the majority of residents are retired singles and
couples, living on downscaled incomes in pre-1960 homes and apartments. For leisure, they
enjoy gardening, sewing, socializing at veterans clubs, and eating out at casual restaurants.

Source: Nielsen, www.claritas.com.

A number of organizations have applied this service to their marketing. The U.S. Army uses
a custom Claritas system to help in recruiting. Sodexho Marriott uses a system to select menu
offerings for its nationwide college food program. Wendy’s and PETCO rely on Claritas to help
decide where to put new stores. When Ace Hardware launched a customer loyalty program
called the Helpful Hardware Club a few years ago, it assigned a Claritas cluster code to every one
of the 7 million members. When Ace found that 12 clusters generated most of its business, it
targeted them with specific promotions. 6
Marketing to microsegments has become possible even for small organizations as database costs
7
decline, software becomes easier to use, and data integration increases. Those who favor such local-
ized marketing see national advertising as wasteful because it is too “arm’s length”and fails to address
local needs. Those against local marketing argue that it drives up manufacturing and marketing costs
by reducing economies of scale and magnifying logistical problems. A brand’s overall image might be
diluted if the product and message are different in different localities.

Demographic Segmentation
In demographic segmentation, we divide the market on variables such as age, family size, family life
cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class.
One reason demographic variables are so popular with marketers is that they’re often associated
with consumer needs and wants. Another is that they’re easy to measure. Even when we describe the
target market in nondemographic terms (say, by personality type), we may need the link back to
demographic characteristics in order to estimate the size of the market and the media we should use
to reach it efficiently.
Here’s how marketers have used certain demographic variables to segment markets.

AGE AND LIFE-CYCLE STAGE Consumer wants and abilities change with age. Toothpaste
brands such as Crest and Colgate offer three main lines of products to target kids, adults, and
older consumers. Age segmentation can be even more refined. Pampers divides its market into
prenatal, new baby (0–5 months), baby (6–12 months), toddler (13–23 months), and
preschooler (24 months+). Indirect age effects also operate for some products. One study of kids
aged 8–12 found that 91 percent decided or influenced clothing or apparel buys, 79 percent
grocery purchases, and 54 percent vacation choices, while 14 percent even made or swayed
vehicle decisions. 8