Editing Market segmentation (section)

== Bases for segmenting consumer markets ==
[[File:Bases for segmentation.png|thumb|300px|Major bases used for segmenting a market]]

A major step in the segmentation process is the selection of a suitable base. In this step, marketers are looking for a means of achieving internal homogeneity (similarity within the segments), and external heterogeneity (differences between segments).<ref>Sarin, S., ''Market Segmentation and Targeting'', Wiley International Encyclopedia of Marketing, 2010</ref> In other words, they are searching for a process that minimizes differences between members of a segment and maximizes differences between each segment. In addition, the segmentation approach must yield segments that are meaningful for the specific marketing problem or situation. For example, a person's hair color may be a relevant base for a shampoo manufacturer, but it would not be relevant for a seller of financial services. Selecting the right base requires a good deal of thought and a basic understanding of the market to be segmented.

In reality, marketers can segment the market using any base or variable provided that it is identifiable, substantial, responsive, actionable, and stable.<ref>Gavett, G., "What You Need to Know About Segmentation," ''Harvard Business Review,'' Online: July 09, 2014 https://hbr.org/2014/07/what-you-need-to-know-about-segmentation</ref>

* ''Identifiability'' refers to the extent to which managers can identify or recognize distinct groups within the marketplace.
* ''Substantiality'' refers to the extent to which a segment or group of customers represents a sufficient size to be profitable. This could mean being sufficiently large in number of people or purchasing power.
* ''Accessibility'' refers to the extent to which marketers can reach the targeted segments with promotional or distribution efforts.
* ''Responsiveness'' refers to the extent to which consumers in a defined segment will respond to marketing offers targeted at them.
* ''Actionable'' – segments are said to be actionable when they guide marketing decisions.<ref>Wedel, M. and Kamakura, W.A., ''Market Segmentation: Conceptual and Methodological Foundations,'' Springer Science & Business Media, 2010, pp 4-5.</ref>

For example, although dress size is not a standard base for segmenting a market, some fashion houses have successfully segmented the market using women's dress size as a variable.<ref>In the early 1980s, Australian fashion designer, [[Maggie Tabberer|Maggie T]], was the recipient of a Hoover Award for a segmentation study which showed that women with dress size 16+ underspent on clothes because they were unable to find suitable garments. This insight led to the establishment of 'plus-sized' fashion outlets. The case study reported in ''Australian Marketing Projects: the Hoover Award for Marketing,'' West Ryde, Australia, 1982</ref> However, the most common bases for segmenting consumer markets include: geographics, demographics, psychographics, and behavior. Marketers normally select a single base for the segmentation analysis, although, some bases can be combined into a single segmentation with care. Combining bases is the foundation of an emerging form of segmentation known as ‘Hybrid Segmentation’ (see {{Section link||Hybrid segmentation}}). This approach seeks to deliver a single segmentation that is equally useful across multiple marketing functions such as brand positioning, product and service innovation as well as eCRM.

{| class="wikitable"
|-
! Segmentation base !! Brief explanation of base (and example) !! Typical segments examples
|-
| '''Demographic''' || Quantifiable population characteristics. ( age, gender, income, education, socio-economic status, family size, or situation). || [[Yuppie|Young, Upwardly-mobile, Prosperous, Professionals]] (YUPPY); [[DINK|Double Income No Kids]] (DINKS); Greying, Leisured And Moneyed (GLAMS); Empty- nester, Full-nester
|-
| '''Geographic''' || Physical location or region ( country, state, region, city, suburb, postcode). || New Yorkers; Remote, outback Australians; Urbanites, Inner-city dwellers.
|-
| '''Psychographics''' || Lifestyle, social or personality characteristics. (typically includes basic demographic descriptors) || Socially Aware; Traditionalists, Conservatives, Active 'club-going' young professionals.
|-
| '''Behavioural''' || Purchasing, consumption or usage behaviour. ( Needs-based, benefit-sought, usage occasion, purchase frequency, customer loyalty, buyer readiness). || Tech-savvy (aka tech-heads); Heavy users, Enthusiasts; Early adopters, Opinion Leaders, Luxury-seekers, Price-conscious, Quality-conscious, Time-poor.
|-
| '''Contextual''' || In digital advertising using programmatic bidding, segmentation is based on what contextual information is known about the user at a given moment || A person searching for a wedding organizer in a specific city will be targeted for a variety of similar vendors, from flower sellers to local dressmakers.  
|-
|'''Socio-Technical segmentation'''<ref name=":0" />
|Rather than segmenting people, socio-technical segmentation identifies distinct consumption assemblages. The basis is that the same type of people constitute multiple segments based on a specific context or situation. 
|A consumption practice (e.g., breakfast) can be segmented based on whether people eat at home or while commuting, whether they eat breakfast cold or warm, and whether they eat it quickly or slowly. 
|}

The following sections provide a description of the most common forms of consumer market segmentation.

=== Demographic segmentation ===
{{further|Demographic targeting}}

Segmentation according to demography is based on consumer demographic variables such as age, income, family size, socio-economic status, etc.<ref>{{cite book|last1=Reid |first1=Robert D. |last2=Bojanic |first2=David C. |title=Hospitality Marketing Management |url= https://books.google.com/books?id=wZUFreNHOWsC |access-date=2013-06-08 |edition=Fifth |year=2009 |publisher=John Wiley and Sons |isbn=978-0-470-08858-6 |page=139}}</ref> Demographic segmentation assumes that consumers with similar demographic profiles will exhibit similar purchasing patterns, motivations, interests, and lifestyles and that these characteristics will translate into similar product/brand preferences.<ref>Baker, M., ''The Marketing Book,'' 5th ed, Oxford, Butterworth-Heinemann, 2003, p.709</ref> In practice, demographic segmentation can potentially employ any variable that is used by the nation's census collectors. Examples of demographic variables and their descriptors include:

* '''Age''': Under 5, 5–8 years, 9–12 years, 13–17 years, 18–24, 25–29, 30–39, 40–49, 50–59, 60+<ref>Sarin, S., ''Market Segmentation and Targeting,'' Wiley International Encyclopedia of Marketing, Vol. 1</ref>
* '''Gender''': Male, Female<ref>Sara C. Parks & Frederick J. Demicco, "Age- and Gender-Based Market Segmentation: A Structural Understanding,"''International Journal of Hospitality & Tourism Administration,'' Vol. 3, No. 1, 2002, DOI: https://dx.doi.org/10.1300/J149v03n01_01</ref>
* '''Occupation''': Professional, self-employed, semi-professional, clerical/ admin, sales, trades, mining, primary producer, student, home duties, unemployed, retired<ref>Tynan, A.N and Drayton, J., "Market segmentation," ''Journal of Marketing Management,'' Vol. 2, No. 3, 1987, DOI:https://dx.doi.org/10.1080/0267257X.1987.9964020</ref>
* '''Socio-economic''': A, B, C, D, E, or I, II, III, IV, or V (normally divided into quintiles)<ref>Coleman, R., “The Continuing Significance of Social Class to Marketing.” ''Journal of Consumer Research,'' Vol. 10, 1983, pp 265-280</ref>
* '''Marital Status''': Single, married, divorced, widowed
* '''Family Life-stage''': Young single; Young married with no children; Young family with children under 5 years; Older married with children; Older married with no children living at home, Older living alone<ref>Gilly, M.C. and Enis, B.M., "Recycling the Family Life Cycle: a Proposal For Redefinition", in ''Advances in Consumer Research,'' Vol. 09, Andrew Mitchell (ed.), Ann Arbor, MI: Association for Consumer Research, pp 271-276, Direct URL:http://acrwebsite.org/volumes/6007/volumes/v09/NA-09</ref>
* '''Family size/ number of dependants''': 0, 1–2, 3–4, 5+
* '''Income''': Under $10,000; 10,000–20,000; 20,001–30,000; 30,001–40,000, 40,001–50,000 etc.
* '''Educational attainment''': Primary school; Some secondary, Completed secondary, Some university, Degree; Postgraduate or higher degree
* '''Home ownership''': Renting, Own home with a mortgage, Home owned outright
* '''Ethnicity''': Asian, African, Aboriginal, Polynesian, Melanesian, Latin-American, African-American, American Indian, etc.
* '''Religion''': Catholic, Protestant, Muslim, Jewish, Buddhist, Hindu, Other

In practice, most demographic segmentation utilizes a combination of demographic variables.

[[File:Demographic segmentation.jpg|thumb|300px|Visualisation of two approaches to demographic segmentation using one and two variables. On the left, a single variable (age) is used. On the right, two variables (income and occupation) are used to form the segments.]]

The use of multiple segmentation variables normally requires the analysis of databases using sophisticated statistical techniques such as cluster analysis or principal components analysis. These types of analysis require very large sample sizes. However, data collection is expensive for individual firms. For this reason, many companies purchase data from commercial market research firms, many of whom develop proprietary software to interrogate the data.

The labels applied to some of the more popular demographic segments began to enter the popular lexicon in the 1980s.<ref>Boushey, H., ''Finding Time,'' Boushey, 2016</ref><ref>Courtwright, D.T., ''No Right Turn,'' Harvard University Press, 2010, p. 147</ref><ref>Dension, D. and Hogg, R., (eds), ''A History of the English Language,'' Cambridge, Cambridge University Press, 2008, p. 270</ref> These include the following:<ref>Thorne, T., ''Dictionary of Contemporary Slang,'' 4th ed, London, Bloomsbury, 2014,</ref><ref>Burridge, K., ''Blooming English: Observations on the Roots, Cultivation and Hybrids of the English Language,'' Cambridge, Cambridge University Press, 2004, pp. 54–55</ref>

:: '''[[DINK (acronym)|DINK]]''': Double (or dual) Income, No Kids, describes one member of a couple with above-average household income and no dependent children, tend to exhibit discretionary expenditure on luxury goods and entertainment and dining out.
:: '''GLAM''': Greying, Leisured and Moneyed. Retired older persons, asset rich, and high income. Tend to exhibit higher spending on recreation, travel, and entertainment.
:: '''GUPPY''': (aka GUPPIE) Gay, Upwardly Mobile, Prosperous, Professional; a blend of gay and YUPPY (can also refer to the London-based equivalent of YUPPY).
:: '''MUPPY''': (aka MUPPIE) Mid-aged, Upwardly Mobile, Prosperous, Professional.
:: '''[[Preppy]]''': (American) Well-educated, well-off, upper-class young persons; a graduate of an expensive school. Often distinguished by a style of dress.
:: '''SITKOM''': Single Income, Two Kids, Oppressive Mortgage. Tend to have very little discretionary income, and struggle to make ends meet.
:: '''[[Tween]]''': Young person who is approaching puberty, aged approximately 9–12 years; too old to be considered a child, but too young to be a teenager; they are 'in-between'.
:: '''[[White Anglo-Saxon Protestant|WASP]]''': (American) White, Anglo-Saxon Protestant. Tend to be high-status and influential white Americans of English Protestant ancestry.
:: '''YUPPY''': (aka [[yuppie]]) Young, Urban/ Upwardly-mobile, Prosperous, Professional. Tend to be well-educated, career-minded, ambitious, affluent, and free spenders.

=== Geographic segmentation ===

Geographic segmentation divides markets according to geographic criteria. In practice, markets can be segmented as broadly as continents and as narrowly as neighborhoods or postal codes.<ref>Wedel, M. and Kamakura, W.A., ''Market Segmentation: Conceptual and Methodological Foundations,'' Springer Science & Business Media, 2010, pp 8-9</ref> Typical geographic variables include:

* '''Country''' Brazil, Canada, China, France, Germany, India, Italy, Japan, UK, US
* '''Region''' Geographic area of a nation, North, North-west, Mid-west, South, Central
* '''Population density''': central business district (CBD), urban, suburban, rural, regional
* '''City or town size''': population under 1,000; 1,000–5,000; 5,000–10,000 ... 1,000,000–3,000,000, and over 3,000,000
* '''Climatic zone''': Mediterranean, Temperate, Sub-Tropical, Tropical, Polar

The geo-cluster approach (also called ''[[geodemographic segmentation]]'') combines demographic data with geographic data to create richer, more detailed profiles.<ref>'What is geographic segmentation' Kotler, Philip, and Kevin Lane Keller. ''Marketing Management''. Prentice-Hall, 2006. {{ISBN|978-0-13-145757-7}}</ref> Geo-cluster approaches are a consumer classification system designed for market segmentation and consumer profiling purposes. They classify residential regions or postcodes based on census and lifestyle characteristics obtained from a wide range of sources. This allows the segmentation of a population into smaller groups defined by individual characteristics such as demographic, socio-economic, or other shared socio-demographic characteristics.

Geographic segmentation may be considered the first step in international marketing, where marketers must decide whether to adapt their existing products and marketing programs to the unique needs of distinct geographic markets.<ref>{{Cite journal |last=Goldsmith |first=Ronald E. |date=2012-05-08 |title=Target Marketing and Its Application to Tourism |url=https://infusemedia.com/insight/definitive-guide-to-b2b-market-segmentation/ |journal=Strategic Marketing in Tourism Services}}</ref> Tourism Marketing Boards often segment international visitors based on their country of origin.

Several proprietary geo-demographic packages are available for commercial use. Geographic segmentation is widely used in direct marketing campaigns to identify areas that are potential candidates for personal selling, letter-box distribution, or direct mail. Geo-cluster segmentation is widely used by Governments and public sector departments such as urban planning, health authorities, police, criminal justice departments, telecommunications, and public utility organizations such as water boards.<ref>Doos, L. Uttley, J. and Onyia, I., "Mosaic segmentation, COPD and CHF multimorbidity and hospital admission costs: a clinical linkage study," ''Journal of Public Health,'' Vo. 36, no. 2, 2014, pp. 317–324</ref>

Geo-demographic or geoclusters is a combination of geographic & demographic variables.

=== Psychographic segmentation ===
{{Main|Psychographic segmentation}}

[[Psychographic]] segmentation, which is sometimes called psychometric or [[Lifestyle (sociology)|lifestyle]] segmentation, is measured by studying the activities, interests, and opinions (AIOs) of customers. It considers how people spend their leisure,<ref>{{cite web |url= http://academic.brooklyn.cuny.edu/economic/friedman/mmmarketsegmentation.htm |title=Market Segmentation and Targeting |publisher=Academic.brooklyn.cuny.edu |date=2011 |access-date=15 July 2014 |url-status=dead |archive-url= https://web.archive.org/web/20140801023550/http://academic.brooklyn.cuny.edu/economic/friedman/mmmarketsegmentation.htm |archive-date=1 August 2014 }}</ref> and which external influences they are most responsive to and influenced by. Psychographics is a very widely used basis for segmentation because it enables marketers to identify tightly defined market segments and better understand consumer motivations for product or brand choice.

While many of these proprietary psychographic segmentation analyses are well-known, the majority of studies based on psychographics are custom-designed. That is, the segments are developed for individual products at a specific time. One common thread among psychographic segmentation studies is that they use quirky names to describe the segments.<ref>Wedel, M. and Kamakura, W.A., ''Market Segmentation: Conceptual and Methodological Foundations,'' Springer Science & Business Media, 2010, pp 10-15</ref>

=== Behavioural segmentation ===

Behavioural segmentation divides consumers into groups according to their observed behaviours. Many marketers believe that behavioural variables are superior to demographics and geographics for building market segments,<ref>Philip Kotler and Gary Armstrong, ''Principles of Marketing,'' Pearson, 2014; 2012</ref> and some analysts have suggested that behavioural segmentation is killing off demographics.<ref>Burrows, D., "Is behavioural data killing off demographics?" ''Marketing Week,''4 September 2015</ref> Typical behavioural variables and their descriptors include:<ref>Kotler, P., ''Marketing Management: Planning, Analysis, Implementation and Control,'' 9th ed., Upper Saddle River, Pearson, 1991</ref>

* '''Purchase/Usage Occasion''': regular occasion, special occasion, festive occasion, gift-giving
* '''Benefit-Sought''': economy, quality, service level, convenience, access
* '''User Status''': First-time user, Regular user, Non-user
* '''Usage Rate/Purchase Frequency''': Light user, heavy user, moderate user
* '''Loyalty Status''': Loyal, switcher, non-loyal, lapsed
* '''Buyer Readiness''': Unaware, aware, intention to buy
* '''Attitude to Product or Service''': Enthusiast, Indifferent, Hostile; Price Conscious, Quality Conscious
* '''Adopter Status''': Early adopter, late adopter, laggard
* '''Scanner data from supermarket or credit card information data'''<ref>{{cite book|last1=Dolnicar |first1=Sara |url= https://books.google.com/books?id=b-1lDwAAQBAJ&q=bases+for+segmenting+consumer+market |title=Market Segmentation Analysis: Understanding It, Doing It, and Making It Useful |last2=Grün |first2=Bettina |last3=Leisch |first3=Friedrich |date=2018-07-20 |isbn=9789811088186 |author-link=Sara Dolnicar}}</ref>

Note that these descriptors are merely commonly used examples. Marketers customize the variables and descriptors for both local conditions and for specific applications. For example, in the health industry, planners often segment broad markets according to 'health consciousness' and identify low, moderate, and highly health-conscious segments. This is an applied example of behavioural segmentation, using attitude to a product or service as a key descriptor or variable which has been customized for the specific application.

==== Purchase/usage occasion ====

Purchase or usage occasion segmentation focuses on analyzing occasions when consumers might purchase or consume a product. This approach customer-level and occasion-level segmentation models and provides an understanding of the individual customers’ needs, behaviour, and value under different occasions of usage and time. Unlike traditional segmentation models, this approach assigns more than one segment to each unique customer, depending on the current circumstances they are under.

==== Benefit-sought ====

Benefit segmentation (sometimes called ''needs-based segmentation'') was developed by Grey Advertising in the late 1960s.<ref>Clancy, K.J. and Roberts, M.L., "Towards an Optimal Market Target: A Strategy for Market Segmentation", ''Journal of Consumer Marketing'', vol. 1, no. 1, pp 64-73</ref> The benefits-sought by purchasers enables the market to be divided into segments with distinct needs, perceived value, benefits sought, or advantage that accrues from the purchase of a product or service. Marketers using benefit segmentation might develop products with different quality levels, performance, customer service, special features, or any other meaningful benefit and pitch different products at each of the segments identified. Benefit segmentation is one of the more commonly used approaches to segmentation and is widely used in many consumer markets including motor vehicles, fashion and clothing, furniture, consumer electronics, and holiday-makers.<ref>Ahmad, R., "Benefit Segmentation: A potentially useful technique of segmenting and targeting older consumers," ''International Journal of Market Research,'' Vol. 45, No. 3, 2003</ref>

Loker and Purdue, for example, used benefit segmentation to segment the pleasure holiday travel market. The segments identified in this study were the naturalists, pure excitement seekers, and escapists.<ref>Loker, L.E. and Perdue, R.R., "A Benefit–Based Segmentation," ''Journal of Travel Research,'' Vol. 31, No. 1, 1992, pp. 30–35</ref>

==== Attitudinal segments ====

Attitudinal segmentation provides insight into the mindset of customers, especially the attitudes and beliefs that drive consumer decision-making and behaviour. An example of attitudinal segmentation comes from the UK's Department of Environment which segmented the British population into six segments, based on attitudes that drive behaviour relating to environmental protection:<ref>Simkin, L., "Segmentation," in Baker, M.J. and Hart, S., ''The Marketing Book,'' 7th ed., Routledge, Oxon, UK, 2016, pp. 271–294</ref>

* '''Greens''': Driven by the belief that protecting the environment is critical; try to conserve whenever they can
* '''Conscious with a conscience''': Aspire to be ''green''; primarily concerned with wastage; lack awareness of other behaviours associated with broader environmental issues such as climate change
* '''Currently constrained''': Aspire to be ''green'' but feel they cannot afford to purchase organic products; pragmatic realists
* ''' Basic contributors''': Skeptical about the need for behaviour change; aspire to conform to social norms; lack awareness of social and environmental issues
* '''Long-term resistance''': Have serious life priorities that take precedence before a behavioural change is a consideration; their everyday behaviours often have a low impact on the environment, but for other reasons than conservation
* '''Disinterested''': View ''greenies'' as an eccentric minority; exhibit no interest in changing their behaviour; may be aware of climate change but have not internalized it to the extent that it enters their decision-making process.

=== Hybrid segmentation ===

One of the difficulties organisations face when implementing segmentation into their business processes is that segmentations developed using a single variable base, e.g. attitudes, are useful only for specific business functions. As an example, segmentations driven by functional needs (e.g. “I want home appliances that are very quiet”) can provide clear direction for product development, but tell little about how to position brands, or who to target on the customer database and with what tonality of messaging.

Hybrid segmentation is a family of approaches that specifically addresses this issue by combining two or more variable bases into a single segmentation. This emergence has been driven by three factors. First, the development of more powerful AI and machine learning algorithms to help attribute segmentations to customer databases; second, the rapid increase in the breadth and depth of data that is available to commercial organisations; third, the increasing prevalence of customer databases amongst companies (which generates the commercial demand for segmentation to be used for different purposes).

A successful example of hybrid segmentation came from the travel company TUI, which in 2018 developed a hybrid segmentation using a combination of geo-demographics, high-level category attitudes, and more specific holiday-related needs.<ref>“Hybrid segmentation in the travel category by TUI”. Presented by TUI at POPAI Retail Marketing Conference, 7 February 2019. https://www.popai.co.uk/boxfile/documentdetails.aspx?GUID=a966736b-5961-4409-bba1-9d5afa224cf9</ref> Before the onset of Covid-19 travel restrictions, they credited this segmentation with having generated an incremental £50 million of revenue in the UK market alone in just over two years.<ref>“Facebook’s segmentation abilities are depressingly impressive”. Article by Mark Ritson, Marketing Week, 9 Nov 2017. https://www.marketingweek.com/mark-ritson-facebook-segmentation/</ref>

=== Other types of consumer segmentation ===

In addition to geographics, demographics, psychographics, and behavioural bases, marketers occasionally turn to other means of segmenting the market or developing segment profiles.

==== Generational segments ====

A generation is defined as "a cohort of people born within a similar period (15 years at the upper end) who share a comparable age and life stage and who were shaped by a particular period (events, trends, and developments)."<ref>McCrindle, M., ''Generations Defined'' [Booklet] n.d. circa 2010 Online: http://mccrindle.com.au/BlogRetrieve.aspx?PostID=146968&A=SearchResult&SearchID=9599835&ObjectID=146968&ObjectType=55</ref> Generational segmentation refers to the process of dividing and analyzing a population into cohorts based on their birth date. Generational segmentation assumes that people's values and attitudes are shaped by the key events that occurred during their lives and that these attitudes translate into product and brand preferences.

Demographers, studying population change, disagree about precise dates for each generation.<ref>Cran, C., ''The Art of Change Leadership: Driving Transformation In a Fast-Paced World,'' Wiley, Hoboken, N.J. 2016, pp. 174–75</ref> Dating is normally achieved by identifying population peaks or troughs, which can occur at different times in each country. For example, in Australia the post-war population boom peaked in 1960,<ref>Salt, B., '' The Big Shift'', South Yarra, Vic.: Hardie Grant Books, 2004 {{ISBN|978-1-74066-188-1}}</ref> while the peak occurred somewhat later in the US and Europe,<ref>U.S. Census Bureau, ''American Fact Finder: Age Groups and Sex'', 2010</ref> with most estimates converging on 1964. Accordingly, Australian Boomers are normally defined as those born between 1945 and 1960; while American and European Boomers are normally defined as those born between 1946 and 1964. Thus, the generational segments and their dates discussed here must be taken as approximations only.

The primary generational segments identified by marketers are:<ref>McCrindle Research, ''Seriously Cool – Marketing & Communicating with Diverse Generations'', Norwest Business Park, Australia, n.d. c. 2010</ref>

* Builders: born 1920 to 1945
* [[Baby boomers]]: born about 1946–1964
* [[Generation X]]: born about 1965–1980
* Generation Y, also known as [[Millennials]]; born about 1981–1996
* [[Generation Z]], also known as Zoomers; born 1997–2012

{| class="wikitable"
|+ Unique characteristics of selected generations<ref>{{cite web |last1=Taylor |first1=Paul |last2=Gao |first2=George |title=Generation X: America's neglected 'middle child' |url= http://www.pewresearch.org/fact-tank/2014/06/05/generation-x-americas-neglected-middle-child/ |website=Pew Research Center |access-date=24 July 2018 |date=5 June 2014}}</ref>
|-
! Colspan="2" | Millennials
! colspan="2" | Generation X
! colspan="2" | Baby Boomers
|-
| Technology use || 24%
| Technology use || 12%
| Work ethic || 17%
|-
| Music/ popular culture || 11%
| Work ethic || 11%
| Respectful || 14%
|-
| Liberal/ tolerant || 7%
| Conservative/ traditional || 7%
| Values/ morals || 8%
|-
| Smarter || 6%
| Smarter || 6%
| Smarter || 5%
|-
| Clothes || 5%
| Respectful || 5%
| {{N/A}} || {{sdash}}
|}

==== Cultural segmentation ====

Cultural segmentation is used to classify markets according to their cultural origin. Culture is a major dimension of [[consumer behaviour]] and can be used to enhance customer insight and as a component of predictive models. Cultural segmentation enables appropriate communications to be crafted for particular cultural communities. Cultural segmentation can be applied to existing customer data to measure market penetration in key cultural segments by product, brand, and channel as well as traditional measures of recency, frequency, and monetary value. These benchmarks form an important evidence base to guide strategic direction and tactical campaign activity, allowing engagement trends to be monitored over time.<ref>Ellson, T., ''Culture and Positioning as Determinants of Strategy: Personality and the Business Organization'', Springer, 2004</ref>

Cultural segmentation can be combined with other bases, especially geographics so that segments are mapped according to state, region, suburb, and neighborhood. This provides a geographical market view of population proportions and may be of benefit in selecting appropriately located premises, determining territory boundaries, and local marketing activities.

Census data is a valuable source of cultural data but cannot meaningfully be applied to individuals. Name analysis ([[onomastics]]) is the most reliable and efficient means of describing the cultural origin of individuals. The accuracy of using name analysis as a surrogate for cultural background in Australia is between 80 and 85%, after allowing for female name changes due to marriage, social or political reasons, or colonial influence. The extent of name data coverage means a user will code a minimum of 99% of individuals with their most likely ancestral origin.

==== Online customer segmentation ====

Online market segmentation is similar to the traditional approaches in that the segments should be identifiable, substantial, accessible, stable, differentiable, and actionable.<ref>Gretchen Gavett, July 09/2014, What You Need to Know About Segmentation, Harvard Business Review, accessed online 3/04/2017: [https://hbr.org/2014/07/what-you-need-to-know-about-segmentation]</ref> Customer data stored in online data management systems such as a [[Customer relationship management|CRM]] or [[Data management platform|DMP]] enables the analysis and segmentation of consumers across a diverse set of attributes.<ref>{{cite web|title = Management Tools - Customer Relationship Management |url= http://www.bain.com/publications/articles/management-tools-customer-relationship-management.aspx |website=bain.com |access-date=23 November 2015}}</ref> Forsyth et al., in an article 'Internet research' grouped current active online consumers into six groups: Simplifiers, Surfers, Bargainers, Connectors, Routiners, and Sportsters. The segments differ regarding four customers' behaviours, namely:<ref>Forsyth, John E.; Lavoie, Johanne; McGuire, Tim. Segmenting the e-market. McKinsey Quarterly. 2000, Issue 4, p14-18. 5p.</ref>

* The amount of time they actively spend online,
* The number of pages and sites they access,
* The time they spend actively viewing each page,
* And the kinds of sites they visit.

For example, ''Simplifiers'' make up over 50% of all online transactions. Their main characteristic is that they need easy (one-click) access to information and products as well as easy and quickly available service regarding products. [[Amazon (company)|Amazon]] is an example of a company that created an online environment for Simplifiers. They also 'dislike unsolicited e-mail, uninviting chat rooms, pop-up windows intended to encourage impulse buys, and other features that complicate their on- and off-line experience'. Surfers like to spend a lot of time online, thus companies must have a variety of products to offer and constant updates, ''Bargainers'' are looking for the best price, Connectors like to relate to others, ''Routiners'' want content, and ''Sportsters'' like sport and entertainment sites.