1. Segmentation Strategies
Segmentation versus aggregation strategies
Consumer preference heterogeneity
The Majority Fallacy
The sales-costs tradeoff cannibalization
Bases of segmentation
The consumer x product x usage situation matrix

2. The Majority Fallacy Preferences Low Medium High
Spiciness/Sweetness/Sourness

3. The sales-costs trade-off of segmentation
Number of different brands Number of different brands

4. Bases of segmentation Bases Examples
Geographic
Postal ZIP code districts, metropolitan
statistical areas, countries, states, provinces,
regions, nations, continents
Demographic
Gender, age, education, occupation, income
marital status, household size, ethnic
background
Psychographic
Personality characteristics, attitudes,
beliefs, lifestyles
Behavioral
Usage situations, usage frequency

5. An ad targeted
at women

6. The VALS 2 technique Actualizers Fullfilleds Achievers Experiencers
Abundant resources
Minimal resources
Principle oriented Status oriented Action oriented
Fullfilleds
Achievers
Experiencers
Believers
Strivers
Makers
Strugglers

7. An appeal to action-oriented consumers who may be achievers

8. The consumer x product x usage situation matrix
Customer
Preference heterogeneity exists. Find a customer
segment that currently is not served adequately.
Product
Brand heterogeneity exists. Develop a new type of
product.
Usage situation
Usage heterogeneity exists. Develop a new
usage situation
Customer x product
Interaction
Different groups of customers are loyal to
different brands.
Customer x product
Situation Interaction
Different groups of customers use the product in
different usage situations.
Product x Usage
Situation Interaction
Different brands are used in different usage
situations.
Customer x Product x
Usage Situation Interaction
Different groups of customers use different brands
in different usage situations.