The Family Life Cycle Is a Significant Tool for Segmenting a Mark...

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The Family Life Cycle Is a Significant Tool for Segmenting a Market for Consumer Products.

By | August 2010
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Segmentation is essentially the identification of subsets of buyers within a market that share similar needs and demonstrate similar buyer behavior. The world is made up of billions of buyers with their own sets of needs and behavior. Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior. The family life cycle is a model that was originality identified by Wells and Gubar (1966)They identified nine life‚Äźcycle stages-which try to depict the consumption behavior of consumers , from bachelor to retired solitary survivor. The basic assumption underlying the family life-cycle approach is that most households pass through an orderly progression of stages, each with its own characteristic financial situation and purchasing patterns. This is a historically important and intuitive approach to segmentation because customers do buy different products at different stages of their life. For instance, first mortgages are highly associated with prospects in their mid- to upper-20s, and home equity loans are highly associated with customers in their 40s with children entering college. The family life cycle is indeed an important tool in segmenting as this tool caters for the preconditions of segmentation to work. Marketers and companies can direct their marketing effort to subsets of the family life cycle. In the hospitality industry, the family life cycle is a significant tool and a good case in example in the cruise ship market could be to market cruises for empty nesters (middle-aged couples whose children have moved out), for newlyweds, and for bachelors (cruises aimed at singles). Club Med has vacations for couples, families, and singles. A builder of condominiums might segment the market for homes by stage in the family life cycle. Very small apartments with tiny kitchens can be targeted for singles. You might have a swimming pool and some tennis courts. In fact, these are the kind of apartments being built in areas filled...
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