Market Segmentation – Classifying Customers

Unit 3: Marketing travel and tourism

Task 3 (AO3)

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Overview: Market segmentation can be done in various ways. Most companies choose to use not just one but a combination of methods:

1.Demographic segmentation
Demographics is the study of the make-up of the population. Demographic trends illustrate how the population is changing. Factors that affect the make-up of the population include the birth rate and life expectancy. When demographic segmentation is used, consumers are grouped according to: Age Gender Ethnic grouping

2.Socio-economic segmentation
In this method of segmentation the population is divided according to socio-economic grouping. These groupings are based on occupation, not income. The classifications are used extensively by advertising media to describe their readership.

Table to show socio-economic segmentation
|A |Upper middle class |Higher managerial, administrative or professional |
|B |Middle class |Intermediate managerial, administrative or professional |
|C1 |Lower middle class |Supervisory or clerical, junior managerial, administrative or professional |
|C2 |Skilled working class |Skilled manual workers |
|D |Working class |Semi-skilled and unskilled manual workers |
|E |Those at lowest level of subsistence |State pensioners, casual or lowest-grade workers |

3.Geographic segmentation
The marketing data company CACI has produced a classification called ACORN (A Classification Of Residential Neighbourhoods) based on postcodes. Every street in the UK is