Morris has segmented the market for cigarette brands by appealing psychologically to con-
sumers in the following way:
• Marlboro: the broad appeal of the American cowboy
• Benson & Hedges: sophisticated, upscale appeal
• Parliament: a recessed filter for those who want to avoid direct contact with tobacco
• Merit: low tar and nicotine
• Virginia Slims: appeal based on "You've come a long way, baby" theme
Evidence suggests that attitudes of prospective buyers towards certain products influ-
ence their subsequent purchase or non-purchase of them. If persons with similar attitudes
can be isolated, they represent an important psychological segment. Attitudes can be defined as predispositions to behave in certain ways in response to given stimulus. I I
Personality is defined as the long-lasting characteristics and behaviors of a person
that allow them to cope and respond to thei r environment. Very early on, marketers were
examining personality traits as a means for segmenti:lg consumers. None of these early stud-
ies suggest that measurable personality traits offer much prospect of market segmentation.
However, an almost inescapable logic seems to dictate that consumption of particular prod-
ucts
brands must be meaningfully related to consumer personality. It is frequently noted
that the elderly dJive big cars, that the new rich spend disproportionately more on housing
and other visible symbols of success, and that extroverts
conspicuously. 12
Motives are closely related to attitudes. A motive is a reason for behavior. A buying
motive triggers purchasing activity. The latter is general, the former more specific. In the-
ory this is what market segmentation is all about. Measurements of demographic, person-
ality, and attitudinal variables are really convenient measurements of less conspicuous
motivational factors. People with similar physical and psychological characteristics are pre-
sumed to be similarly motivated. Motives can be positive (convenience), or negative (fear
of pain) . The question logically arises: why not observe motivation directly and classify
market segments acco rdingly?
Lifestyle refers to the orientation that an individual or a group has toward consump-
tion, work, and play and can be defined as a pattern of attitudes, interests, and opinions
held by a person. Lifestyle segmentation has become very popular with marketers, because
of the availability of measurement devices and instruments, and the intuitive categories that
result from this process.13 As a result, producers are targeting versions of their products
and their promotions to various lifestyle segments. Thus, companies like All State Insur-
ance are designing special programs for the good driver, who has been extensively char-
acterized through a lifestyle segoentation approach. 14, 15
Lifestyle analysis begins by asking questions about the consumer's activities, inter-
ests, and opinions . If a man earns $40,000-$50,000 per year as an executive, with a wife
and four children, what does he think of his role as provider versus father? How does he
spend his spare time? To what clubs and groups does he belong? Does he hunt? What are
his
toward advertising? What does he read ?
AIO (activities, interests, opinions) inventories, a s they are called, reveal vast amounts
of information concerning attitudes toward product categories, brands within product cat-
egories, and user and non-user characteristics. Lifestyle studies tend to focus upon how peo-
ple spend their money; their patterns of work and leisure; their major interests; and their
opinions of social and political issues, institutions, and themselves. The popularity of lifestyles as a basis for market segmentation has prompted several research firms to specialize in
this area. However, few have achieved the success of VALS and VALS 2 developed by SRI
International.
APPROACHING THE MARKET
41
Introduced in 1978, the original VALS (Values, Attitudes, and
divided the
American population into nine segments, organized along a hierarchy of needs. After several
years of use, it was detenmned that the nine segments refjected a popuiation dominated by
people in their twenties and thirties, as the U.S . was ten years ago . Moreover, businesses found it difficult to use the segments to predict buying behavior or target consumers. For these reasons, SRl developed an all-new system, VALS 2. It dropped values and lifestyles as its pri-
mary basis for its psychographic segmentation scheme. Instead, the forty-three questions ask
about unchanging psychological stances rather than shifting values and lifestyles.
The psychographic groups in VALS 2 are alTanged i'1 a rectangle (see Figure 2.3).
They are stacked vertically by their resources (minimal to abundant) an horizontally by their
self-orientation (principle, status, or action-oriented).
An annual subscription to VALS 2 provides businesses with a range of products and
services. Businesses doing market research can include the VALS questions in their ques-
tionnaire. SRl will analyze the data and VALS-type the respondents.
Segmenting Organizational Markets
It is also important for the marketing manager to understand how business or organization
customers can be segmented. Many firms sell not to ultimate consumers but to other busi-
nesses. Although there are many similarities between how consumers and businesses behave,
there are also several differences, as mentioned earlier. Recall that business buyers differ
as follows: (i) most business buyers view their function as a rational (problem-solving)
approach; (2) the development of formal procedures, or routines, typifies most business buy-
ing; (3) there tend to be multiple purchase influences; (4) in il1dustrial buying it is neces-
sary to maintain the correct assortment of goods in inventory ; and (5) it is often the
responsibility of the purchasing executive to dispose of waste and scrap.
A number of basic approaches to segmenting organizational markets exist. An indus-
trial marketing firm must be able to distinguish between the industries it sells to and the dif-
ferent market segments that exist in each of those industries. There are several basic approaches to segmenting organizational markets: (1) types of customers; (2) the Standard Industrial Classification; (3) end use; (4) common buying factors; and (5) buyer size and geography. 2, 16
Type of Customer
Industrial customers, both present and potential, can be classi-
fied into one of three groups,
1. Original Equipment Manufacturers (OEMs), such as Caterpillar in the road equip-
ment industry,
2. End users, such as farmers who use farm machinery produced by john Deere and
OEMs.
3. Aftermarket customers, such as those who purchase spare parts for a piece of
machinery.
Similarly, industrial products can be classified into one of three categories, each of
which is typically sold to only certain types of customers:
1. Machinery and equipment (e.g., computers, trucks, bulldozers): these are end prod-
ucts sold only to OEM and end user segments.
2. Components or subassemblies (e.g. , switches, pistons, machine tool parts): these
are sold to build and repair machinery and equipment and are sold in all three cus-
tomer segments.
J. Materials (e.g., chemicals, metals, herbicides): these are consumed in the end-user
products and are sold only to OEMs and end users.
42