Market Segmentation

Separating customers into market groups provides the basis for successful strategy development in marketing a restaurant. Market segmentation is the process of dividing a total market into groups of people with similar needs, wants, values, and purchasing behaviors. A market is not a place, but rather a group of people, as individuals or organizations. The group needs products and possesses the ability, willingness, and authority to purchase them. A market segmentation is a mixture of individuals, groups, or organizations that share one or more characteristics, which causes them to have similar product needs.

In a homogenous market, a marketing mix is easier to design than one in a heterogeneous group with dissimilar needs. Choosing the correct variable for segmenting market is important in developing a successful strategy. Variables are often broken down into 4 categories for the segmentation process: geographic, demographic, psychographic, and behavioristic.

Variable: Geographic

          Region:

o   Pacific, Mountain, West North Central, West South Central, East North Central, East

          City/metro population:

o   Under 5,000; 5,000-20,000; 20,000-50,000; 50,000-100,000; 100,000-250,000; 250,000-500,000; 500,000-1,000,000; 1,000,000-400,000; 4,000,000 or over

          Density

o   Urban, suburban, rural

          Family life cycle

o   Northern, southern

Variable: Demographic

          Age:

o   Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 65+

          Gender:

o   Male, female

          Family size:

o   1-2, 3-4, 5+

          Family life cycle:

o   Young, single; young, married, no children; young, married, youngest child under 6; young, married, youngest child 6 or over; older, married, with children; older, married, no children under 18; older, single; other

          Income:

o   Under $10,000; $10,000-$15,000; $15,000-$20,000; $20,000-$30,000; $30,000-$50,000; $50,000-$100,000, $100,000 and over

          Occupation:

o   Professional and technician; managers, officials, and proprietors; clerical, sales; craftspeople, foreman; operatives; farmers; retired; students; housewives; unemployed

          Education:

o   Grade school or less; some high school; high school graduate; some college; college, graduate

          Religion:

o   Catholic, Protestant, Jewish, Muslim, Hindu, other

          Race:

o   White, Black, Asian, Hispanic

          Nationality:

o   American, British, French, German, Italian, Japanese

Variable: Psychographic

          Social class:

o   Lower lowers; upper lowers; working class, middle class, upper middles, lower uppers, upper uppers

          Lifestyle:

o   Straights, swingers, longhairs

          Personality:

o   Compulsive, gregarious, authoritarian, ambitious

Variable: Behavioristic

          Occasions:

o   Regular occasion, special occasion

          Benefits:

o   Quality, service, economy, speed

          User status:

o   Nonuser, ex-user, potential user, regular user

          Usage rate:

o   Light user, medium user, heavy user

          Loyalty status:

o   None, medium, strong, absolute

          Readiness stage:

o   Unaware, aware, informed, interested, eager, intending to buy

          Attitude toward product:

o   Enthusiastic, positive, indifferent, negative, hostile

Geographic variables include climate, terrain, natural resources, population density, and subculture values that influence customers’ product needs. Demographic variables consist of population characteristics that might influence product selection like age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, social class, and price sensitivity. Psychographic variables include many factors that can be used for segmenting the market, but the most common are motives and lifestyle. Lifestyle segmentation categorizes people according to what is important to them and their mode of living. A classification system for segmenting customers in terms of lifestyle factors is the VALS: Values and Life-Styles research program. The VALS model is broken down into 3 parts:

          Ideals:

o   Consumers make choices based on their knowledge and principles.

          Achievement:

o   Consumers make choices based on what they perceive will show their success to their peers.

          Self-expression:

o   Consumers make choices based on a desire for social or physical activity, variety, or risk.

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Does Social Isolation Leads to an Early Death?

Both social isolation and loneliness are associated with increased mortality, but it is uncertain whether their effects are independent or whether loneliness represents the emotional pathway through which social isolation impairs health. People who are socially isolated are more likely to die prematurely, regardless of their underlying health issues, according to a study of the elderly British population.

The research found on Monday in the Proceedings of the National Academy of Sciences, showed that when mental and physical health conditions were factored out, the lack of social contact continued to lead to early death among 6,500 men and women tracked over a seven-year period.

People were recorded as dying from natural, normal causes but, isolation did have a strong influence as well. The study also appeared to diminish the role that subjective feelings of “loneliness,” as opposed to the lack of social contact, may have on a person’s life span. Both lead to higher mortality rates, but the effects of feeling lonely is reduced once demographic and health factors are weighed in.

Regardless of the distinction, the study reinforces the need to increase social support for the elderly, even as it adds to debate over the intertwined effects of social contact and feelings of loneliness in old age. A similar look at retired Americans in 2012 reinforced multiple studies that link loneliness to numerous illnesses, including heart trouble and high blood pressure.

Both studies come as British and U.S. populations have become more solitary. People living alone compose more than a quarter of U.S households, and the proportion of Americans who said they had no one to talk to about important matters grew from 10% in 1985 to 25% in 2004.

Separating the effects of loneliness from those of isolation, however, has not been easy for those who study rates of illness and death. While isolation can be measured directly — by how many friends you have or how often you have contact with family — loneliness is more subjective, measured through survey questions about whether social needs and expectations are being met.

Anyone familiar with Henry David Thoreau knows that isolation does not necessarily lead to loneliness, while the story of Marilyn Monroe shows that a strong social life can still leave you lonely.

Last year’s report on loneliness, based on the U.S. Health and Retirement Study, showed that loneliness appeared to increase mortality risk over a six-year period, an association that could not be attributed to social relationships or health behaviors, such as smoking and drinking.

The National Institute on Aging, part of the National Institutes of Health, funded both the British study and last year’s report on U.S. retirees. Loneliness and isolation “should get lots of attention because they may be as important, as joint factors, as smoking.” However, the effect of loneliness was not independent of demographic characteristics or health problems and did not contribute to the risk associated with social isolation. Although both isolation and loneliness impair quality of life and well-being, efforts to reduce isolation are likely to be more relevant to mortality.

Social Isolation and Health

Social Isolation, Loneliness, Mortality

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