The consumers who purchase the cosmetic products made by the companies in the Markstrat world are of varying ages, occupations, and family status. They are all adults, over 16 years of age, generally women, who purchase the products for personal use. Market studies show that these consumers can be divided into five major groups, or segments, having similar needs and purchasing behavior.
•High Earners (Hi) – The members of this group are characterized by their high incomes. They are women over 25 years of age, either single or married without kids, and studies show that they usually buy expensive products, which they can afford, and that their purchases are partially motivated by social status. They are heavy users, with an average loyalty to their favorite brands, and they are price insensitive to the point of disregarding cheap brands, and they demand high levels of performance attributes from their products.
•Affluent Families (Af) – Women in this segment are aged 25 – 45, are either married with kids or single parents. Their high income levels leads them to be highly loyal, frequent buyers and users of cosmetics, and they are definitely not price sensitive. Consumers in this segment are looking for high quality, high-performance and pleasant-to-use products. They can afford expensive products and often view price as an indication of quality.
•Medium Income Families (Me) – These consumers have less disposable income than the Affluent Families, and are thus more price sensitive. This segment also includes some sub-groups who do not fit with the other segments. Although this segment is the largest and is composed of several sub-groups, most customers have similar needs. They are looking for relatively inexpensive products with average physical attributes. Experts believe that the penetration of this segment is not as high as the other segments. As a consequence, its future growth rate could exceed forecasts. Their loyalty is above average.
•Low Income Families (Lo) – Individuals in this segment have a similar family situation and age range as the Affluent Income families. Their lower income levels, however, causes their budgets to be strained, and leads them to be less frequent buyers and users of cosmetics, and to be very price sensitive. Their loyalty is below average.
•Singles (Si) – As the name of this segment indicates, Singles live alone. They are generally between 16 and 35 years of age and can be students or employees. All in all, while being relatively heavy users, they demand average levels of both performance and pleasure from their cosmetic products and tend to be rather price-sensitive. Singles are not loyal to any brand; on the opposite, they tend to favor new brands and switch very easily is the new brands fit their needs.
Each segment has specific needs in terms of physical characteristics and price, and these needs will most probably evolve over time. Awareness levels and purchase intentions vary significantly for existing products from one group to the other. In addition, market forecast studies show that the size and growth rates of the five segments are quite different. This is explained in part by the development stage of each segment, by the varying product offerings, and by the intensity of marketing efforts targeted at each segment.