Application of Lifestyle Segmentation

The process of lifestyle segmentation involves two steps. First, a determination is made of which lifestyle segments will efficiently produce the greatest number of profitable customers. Often heavy users are sought but as we have seen, other segments also have potential. The second step involves defining and describing the selected target customers in more depth to understand how they may be attracted and communicated with more efficiently and relevantly. One danger of relying on psychographic models, even when they are appropriate, is that marketers may risk alienating groups with a low index of usage, who make up a much larger proportion of the population. For example, yogurt consumption by one psychographic segment may be 20 percent better than average, but if they only comprise, say 3 percent of the market their usage really doesn’t compare to that of another psychographic group representing 40 percent of the market, who although only average yogurt eaters, may account for one third of all the yogurt sold. How to appeal successfully to each different psychographic group is an extremely challenging issue to marketers.

Lifestyles may be used as a basis for segmentation in several ways. In one approach the marketer seeks to classify the consumer population into groups based on general lifestyle characteristics, so that consumers within the groups have similar lifestyles. Using the research approach described above, a representative sample of consumers responds to a questionnaire containing AIOs, product usage, media consumption, and demographic items. Through statistical routines (clustering and others) the marketer attempts to find out if people can be grouped together into distinct groups. Each group represents a different pattern of needs for and consumption of products and services. Once these groups are identified the marketer is able to direct his product to appeal to one or several segments.

As an example of this approach, major study by DDB Needham Worldwide Inc. advertising agency categorized almost 3300 respondents into ten different lifestyles types – five female and five male. To help client understand the lifestyle data, the ten consumer composites were even given personal names, as shown below for the female groups.

From these profiles indexes of product usage for some items of interest can then be developed showing how the groups differ in their consumption. For example, Eleanor, Candice, and Mildred represent heavy cosmetics users. Given their varying psychographic profiles however quite different strategies will be necessary to reach the different groups. By also understanding the media pattern of these groups marketers can select appropriate advertising vehicles. For example, magazines such as Glamour, Cosmopolitan, and True Story, and radio stations playing heavy rock are much more likely to reach Mildred while publications such as Vogue, Cosmopolitan and Better Homes and Gardens and radio stations playing classical music tend to appeal to Eleanor and Candice.

A general segmentation study was successfully used by a manufacturer of intimate apparel for women, to diversify its product lines. The maker had been selling a line of old fashioned, traditional lingerie that appealed to the Thelmas and Cathys of the United States. As a result of a segmentation study, the company uncovered an opportunity to design and market two new lines of intimate apparel, one to appeal to people resembling Eleanor and Candice, and the other to be aimed at people like Mildred.

A popular segmentation approach relates consumer values and lifestyles. One of the well known involving such segmentation is VALS, a service of SRI International.

Psychographic Profiles:

The female segments:

Thelma the old fashioned traditional list (25%)>
This lady has lived a good life – she has been a devoted wife, a doing mother, and a conscientious housewife. She has lived her life by these traditional values and she cherishes them to this day. She does not condone contemporary sexual activities or political liberalization; nor can she sympathize with the women’s libbers. Even today, when most of her children have left home, her life is centered around the kitchen. Her abiding interest outside the household is the church which she attends every week. She lacks higher education and hence has little appreciation for the arts or cultural activities. Her spare time is spent watching TV, which is her prime source of entertainment and information.

Mildred, the miltant mother (20%):

Mildred married young and had chidren before she was quite ready to raise a family. Now she is unhappy. She is having trouble making ends meet on her blue collar husband’s income. She is frustrated and she vents her frustrations by rebelling against the system. She finds escape from her unhappy world in soap operas and movies. Television provides an ideal medium for her to live out her fantasies. She watches TV all through the day and into late night. She likes heavy rock probably soul music, and she doesn’t read much except escapist magazines such as True story.

Condice the chic suburbanite (20%)

Condice is an urbane woman. She is well educated and genteel. She is a prime mover in her community, active in club affairs and working on community projects. Socializing is an important part of her life. She is a doer, interested in sports and the outdoors, politics and current affairs. Her life is hectic and lived at a fast clip. She is a voracious reader, and there are few magazines she doesn’t read. However, TV does relatively poorly in competing for her attention – it is too inane for her.

Cathy, the contented housewife (18%):

Cathy epitomizes simplicity. Her life is untangled. She is married to a worker in the middle of the socioeconomic scale, and they, along with their several preteen children, live in a small town. She is devoted to her family and faithfully serves them as mother, housewife, and cook. There is a certain tranquility in her life. She enjoys a relaxed pace and avoids anything that might disturb her equilibrium. She doesn’t like news or news type programs on TV but enjoys the wholesome family entertainment provided by Walt Disney, The Waltons, and Happy days.

Eleanor, the elegant socialite (17%):

Eleanor is a woman with style. She lives in the city because that is where she wants to be. She likes the economic and social aspects of big city living and takes advantages of the city in terms of her career and leisure time activities. She is a self confident on the go woman, not a homebody. She is fashion conscious and dresses well. She is a woman with panache. She is financially secure; as a result she is not a careful shopper. She shops for quality and style, not price. She is a cosmopolitan woman who has traveled abroad or wants to.