Part 1

As you may recall from your studies, through segmentation, firms divide the total market into manageable slices. Firms do so in a number of ways, but regardless of the primary segmentation characteristic, the point of this exercise is to divide the potential market into distinct groups that are similar (homogeneous) within the groups and dissimilar (heterogeneous) across the different groups. Marketers typically segment markets on the following bases:

• Demographics: numbers that describe the population according to several categories, such as gender, income, education level, family structure, race and ethnicity, geography, or population density in urban, suburban, or rural areas. Age is another important demographic category that CanGo uses to distinguish Baby Boomer (born 1946-1964), Gen-X (born 1965-1976), and Gen-Y (born after 1976) consumers.
   
• Psychographics: differentiating factors such as activities, interests, and opinions. CanGo could use these factors to subdivide the huge Boomer segment, e.g., Boomers who enjoy computer games.
   
• Usage (behavioral characteristics): the occasion and conditions under which consumers use a product. For example, CanGo could distinguish Boomer computer gamers who prefer to use Macintosh computers from those who use IBM-compatible PCs.
   
• Benefits: the benefits a consumer may gain from using a particular product. For instance, CanGo could segment Boomers who go to computer games for relaxing fun, rather than those seeking pulse-raising excitement.

In the exercises below, consider the strategy described and decide which type of segmentation it employs.

 
 
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