Question

Explain why segmentation efforts based on attempts to divide the mass market using a few demographic dimensions may be very disappointing.

Answer 1

Some reasons for disappointment from marketing segmentation based on only a few demographic dimensions are that:

1. demographic dimensions are but one of three market segmenting dimensions, the other two being behavioral dimensions and urgency of need dimensions.
2. using a few demographic dimensions may preclude identifying the determining and qualifying dimensions.
3. using few demographic dimensions allows for too much heterogeneity when segmentation aims for homogeneous groups.

Market segmentation is the division of the mass market of consumers into discrete subsets of groups based on defining characteristics that are common to individuals and that are related to behavioral characteristics (e.g., benefits sought, shopping habits), demographic and geographic characteristics (e.g., life cycle stage, ethnicity, southern hemisphere) and characteristics of urgency for need or desire fulfillment (e.g., dinner tonight, class tomorrow).

Demographic dimensions include age, income, family size, education level, occupation and social class. Demographic dimensions can be indicative of consumer choice, such as in the general differences in music purchases between someone 16 and someone 60. But segmentation that is limited to a few demographic dimensions, like age and education level, eliminates consideration of potential determining dimensions, such as the behavioral dimension of preference, which might lead a 16-year-old to buy Glenn Miller instead of Uptown Funk.

Restricting market segmentation to a few of one type of dimension may have results that are very disappointing, then, because doing so may develop segmented groups that have dissimilar qualifying and determining dimensions and that appear homogeneous but may have too many unidentified heterogeneous characteristics.