The Marketing Book 5th Edition

266 The Marketing Book

made at the right time and the shopper’s new
purchases can be added to the bank of informa-
tion on their previous purchases, and hence the
amount and quality of information grows – and
so does a potential ‘relationship’ with individ-
ual customers. This would lead to a significant
paradigm shift in terms of segmenting and
targeting markets, at both the operational and
strategic levels. It demonstrates an oft-pro-
claimed trend toward custom market segmen-
tation, one-to-one marketing and customer
relationship management (CRM), and is dis-
cussed shortly.
The point is that transactional data become
the central focus of segmenters’ many data-
bases, and is overlaid with the multitude of
profile data discussed earlier. As a result, we
have moved into the era of biographicsegmenta-
tion – the fusion of profile and transaction data.
Many marketers are able to produce a ‘buying
biography’ of individual customers.
The general point being made here is that
markets are being analysed in ever more

sophisticated and detailed ways, and this is

leading to the identification and targeting of

smaller but better-defined (at least in theory)

segments.

Segmentation metrics

This section outlines how some of the more

popular segmentation metrics operate. For

ease of illustration and integration of these

metrics through a typical sequence of applica-

tion, a hypothetical case study is used as a

framework. A financial services company mar-

kets several financial service products and

wants to identify new segments within its

existing customer base for a cross-selling strat-

egy. Through the application of data mining/

CRM software (this case has been adapted by

the author from one provided by SmartFocus;

the data mining/CRM software concerned is

their VIPER product), the company can easily

identify those customers who have already

purchased various of the company’s products.

Table 10.8 Continued

Life stage 7 Retired Couples

The golden years Affluent couples

Cultured living Retired couples with up market leisure interests

Keeping up appearances Retirees in bungalows

Put the kettle on Inactive retirees

Counting the pennies Elderly couples in low value housing

Just coping Impoverished elderly couples

Life stage 8 Older Singles

Older affluent urbanites Older metropolitans in expensive housing

Active pensioners Older people with active lifestyles

Theatre and travel Elderly city dwellers with up market interests

Songs of praise Charitable elderly singles

Grey blues Pensioners living in very poor areas

Church and bingo Very old and poor singles

Meals on wheels Poorest elderly in council flats

Source: CACI: People UK. ONS and GRO(S).