Segmetation Activity: Demographic Profile
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)
- 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?
- 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?
- 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.)
- Do you see yourself in either of the chosen segments? Explain why or why not.
- How do these segmentations impact the creation of a marketing plan?
Segmentation Activity
1. Chosen Zip Codes
For this activity, I explored the following two zip codes:
- Zip Code 90210: Beverly Hills, California
- Zip Code 60614: Lincoln Park, Chicago, Illinois
2. PRIZM Segments
The PRIZM segments I chose for these zip codes are:
- 90210 (Beverly Hills, CA): “Luxury Living”
- 60614 (Lincoln Park, Chicago, IL): “Young Digerati”
3. Comparison and Contrast Analysis
Demographic Segmentation:
- Luxury Living (90210): This segment typically includes high-income households, often with significant wealth accumulated through professions in entertainment, finance, or entrepreneurship. The average household income is significantly above the national average, often exceeding $200,000.
- Young Digerati (60614): This segment comprises younger, affluent professionals, usually in their late 20s to mid-30s, who are tech-savvy and likely to be educated, with household incomes around $100,000-$150,000.
Psychographic Segmentation:
- Attitudes:
- Luxury Living: Members tend to value exclusivity, luxury, and status, often preferring premium brands and experiences.
- Young Digerati: This group values innovation, lifestyle, and social experiences, often seeking out trendy and tech-forward products.
- Values:
- Luxury Living: They prioritize wealth accumulation and lifestyle enrichment, valuing possessions that enhance their status.
- Young Digerati: They value experiences over material goods, placing emphasis on adventure, community, and digital engagement.
- Social Activities:
- Luxury Living: Frequent social events, charity galas, and luxury travel are common, often engaging in high-profile social circles.
- Young Digerati: They are likely to participate in nightlife, cultural events, and networking opportunities in tech or creative fields.
- Media Usage:
- Luxury Living: This segment prefers high-end magazines (e.g., Vogue, Vanity Fair) and upscale television shows, often consuming media that reflects their lifestyle.
- Young Digerati: They are more inclined to use social media platforms (e.g., Instagram, TikTok) and digital content, valuing online interactions and influencer recommendations.
4. Personal Reflection
I can relate to aspects of the Young Digerati segment. As someone who is in my late 20s, I value innovative experiences and enjoy engaging with technology and social media. The emphasis on community and adventure resonates with my lifestyle choices, as I often seek out unique events and opportunities to connect with others.
5. Impact on Marketing Plan
Understanding these segments greatly impacts marketing strategies. For Luxury Living, a marketing plan might focus on exclusive events, premium products, and high-end advertising in luxury publications. In contrast, marketing to Young Digerati would benefit from digital marketing strategies, utilizing social media influencers, and highlighting innovative product features that align with their values. By recognizing the distinct attitudes, values, and media habits of each segment, marketers can create targeted campaigns that effectively resonate with their audience, ultimately leading to higher engagement and conversion rates.
In summary, integrating both demographic and psychographic insights allows marketers to develop a nuanced understanding of their target audiences, tailoring messages that appeal specifically to their lifestyles and preferences.