Chapter 05 - Market Segmentation
the basis of the similarity of their responses.
Lifestyles are measured by asking consumers about their activities, interests, and
The best-known psychographic segmentation is called VALSTM (values and lifestyles).
The VALSTM framework has eight psychographic groups arranged in a rectangle based on
two dimensions (see Figure 5.4).
The vertical dimension segments people based on the degree to which they are innovative
and have resources such as income, education, self-confidence, intelligence, leadership
skills, and energy.
The horizontal dimension represents primary motivations for buying and includes three
Consumers driven by knowledge and principles are motivated primarily by ideals. These
consumers include the Thinkers and Believers groups.
Consumers driven by a goal of demonstrating success to their peers are motivated
primarily by achievement. These consumers include Achievers and Strivers.
Consumers driven by a desire for social or physical activity, variety, and risk taking are
motivated primarily by self-expression. These consumers include both the Experiencers
At the top of the rectangle are the Innovators, who have such high resources that they
may express any of the three motivations.
At the bottom of the rectangle are the Survivors, who live complacently and within their
means without a strong primary motivation.
Geodemographic segmentation identifies specific households in a market by focusing on
local neighborhood geography to create classifications of actual, addressable, mappable
neighborhoods where consumers live and shop.
One geodemographic system, is called Nielsen PRIZM, which stands for consumers
“Potential Ranking Index of ZIP Markets.”
oThe system classifies every U.S. neighborhood into one of 14 groups.
The PRIZM segmentation is available on major marketing databases from leading
The PRIZM system is based on the assumptions that consumers in particular
neighborhoods are similar in many respects and that the best prospects are those who
actually use a product or other consumers like them.
Marketers use PRIZM to better understand consumers in various markets, what they are
like, where they live, and how to reach them.
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