Spiller5e PPT03

Direct, Digital &
Data-Driven
Marketing
© Lisa Spiller
Chapter 3
Lists and market segments
Chapter spotlight
• NextMark, Inc.
3
Lists as market segments
• Lists identify prospects as well as customers who have

something in common.
• Lists are perishable commodities.
4
Three types of lists
• In descending order of importance:

– House lists
– Response lists
– Compiled lists
5
Development of house lists
• Crucial for direct marketers to compile and develop

relevant list data
• Must determine:
– What qualifies as useful data
– How to collect and record the data
– The form of the data
– What purpose the data will serve in the future
6
Response and compiled lists
• Response Lists
– House lists of other organisations
– Lists of directly competitive firms
• Compiled Lists
– Generated lists by a third party or market research firm
– Thus, do not have a response history
7
Compiled list example: WSJ
targeting college students
8
The list industry
• List users
• List owners
• List managers
• List compilers
• List brokers
• Service bureaus
9
List research
10
11
12
Evaluation of lists
• Measurement of Results
– Key Codes on promotional pieces
– Different toll-free numbers
– ‘Hotline’ names identified & tracked
– ‘Multi-buyers’ identified & tracked
13
The nature of market segmentation
• The needs, wants or interests of consumers belonging to

various market segments differ
• Product differentiation
• Product positioning
(Targeting consumer niches)
14
Product differentiation
• A strategy to make clear a distinction between products and

services serving the same market using:
– innovative designs, packaging and positioning
• An alternative to price competition
15
Product positioning
• The way the product is defined by consumers on important

attributes
• Position based on
– Quality
– Size
– Colour
– Distribution method
– Price
– Time of day product is used
– Time of year
16
General indicators or ‘Bases’ for
segmenting markets
• Geographic
• Demographic
• Social
• Psychological
• Behavioural
• Cohort Analysis
17
Geographic segmentation
• Census CD Neighbourhood
Change Database (NCDB)
• Global Positioning System (GPS)
• Geographic Information System
(GIS)
18
Demographic segmentation
• Demographics – identifiable and measurable statistics

• Common variables:
– Age
– Gender
– Education level
– Income level
– Occupation
19
Social factor segmentation
• Person’s culture
• Subculture
• Social class rank
• Peer group references
• Reference individuals
• Social factors demonstrate the impact other people in our
society have on our decision-making process and
consumption activates.
20
Psychographic segmentation
• Lifestyles
• Habits
• Attitudes
• Beliefs
• Value systems
• Personality variables
21
Behavioural segmentation
• Specific types of products/services consumers have

purchased
• Time of transaction
• Location of purchases
• Method of payment
22
Behavioural segmentation example:
Digital retargeting
23
Cohort analysis
• A cohort is a group of people who have in common a

specific experience or characteristic. Cohorts are different
from general demographics that are often used for market
segmentation.
• Cohorts categorise individuals within their demographic
groupings.
• Example: women who are between the ages of 18 and 22,
who attended a 4-year university, and belonged to a certain
sorority
• Cohort analysis reveals consumer groups that have unique
bonds, thus they are a unified market segment.
24
Using multiple segmentation bases –
Claritas prizm example
25
26
27
Zip code areas as market segments
• ‘Birds of a feather flock together’.

• Tend to enclose homogeneous neighbourhoods and
geographical boundaries
• Wide availability of statistical data for Zip code areas
28
Zip code digit designations
• The U.S. Postal Service has added a four-digit extension:

– Digits 6 and 7 – could denote the location of a specific
organization, such as a university
– Digits 8 and 9 – could represent a specific segment or
department within the university, perhaps the office of
admissions
29
Case
30
Unique web site URLs for each
market segment
31

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Direct, Digital &

• Lists identify prospects as well as customers who have

• In descending order of importance:

• Crucial for direct marketers to compile and develop

• The needs, wants or interests of consumers belonging to

• A strategy to make clear a distinction between products and

• The way the product is defined by consumers on important

• Demographics – identifiable and measurable statistics

• Specific types of products/services consumers have

• A cohort is a group of people who have in common a

• ‘Birds of a feather flock together’.

• The U.S. Postal Service has added a four-digit extension:

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