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Goyat (2011) suggests that consumers can be broken down into four different segments to identify their needs and wants (Fig 1).
Figure 1- Segmentation (Goyat, 2011).
Geographical
The product launch will be held in the London Covent Garden store, targeting London residents (Population of 8.768 million (UK Population, 2017)), London tourists and guests from around the world (See launch party page). After the launch, the product will be available worldwide as it will be sold online.
Demographic segmentation
The young city professional
Thomas et al (2015) states that the quantity of young individuals (aged 20-29) living in city centres is higher than average. It is suggested that the younger demographic are living in these areas due to career opportunities with 70% living in flats/ apartments. Half of central London residents have a degree and are likely to be in highly skilled jobs with an average income of £34,000+ which is higher than any other city in the UK (Monster, 2017). The new diffuser will specifically target this market as they have a high disposable income and interior design is important to them. The look of the diffuser will be designed as a fashion statement and aims to enhance the interior of their stylish London apartments.
High net worth individuals
According to Chevalier and Mazzalovo (2008) there are 7.2 million people in the world with net assets exceeding £1,000,000 with approximately 300,000 of these living in the UK. These consumers are not rational when they purchase a luxury object and expect the product to be expensive. They also like luxury goods to be difficult to obtain. By having an expensive price tag and making the product limited edition, this will appeal to this audience.
Baby boomers
Baby boomers is the term given to the demographic aged between 50-58 years old (WJSchroer, 2017) and have a buying power of 76 million (Wilson, 2009). Due to the high disposable income and matured life stage this market will be considered.
Tourists
Due to the pedigree of Penhaligon’s, its rich British heritage and links with the royal family another potential market will be tourists. In a recent survey, the made in the UK label was 3rd in a list of the most respected among shoppers (Hills, 2017). Visit Britain (2014) suggests that London has the highest amount of tourist purchases and tourists from all over the world make purchases as a reminder of places they have visited. The current Penhaligon’s range is labelled as ‘Penhaligon’s London’ (Penhaligon’s, 2017). The diffuser will also use this labeling to attract tourist purchases.
Psychographic segmentation
This product would appeal to individuals with an interest in interior design. They may spend limited time at home however, when they are at home they would host social gatherings and the diffuser would enhance the look/smell of the home. They may also have an interest in British products.
Behavioural
The symbolic self-completion theory is when an individual’s consumption of brands are used to raise a person’s status and build self-image (Write, 2006). The purchasing of the diffuser may portray the fact that individuals like to spend their money on expensive, quality goods. The royal warrants may give the consumer trust in the brand and the product could be an impulse buy due to the limited edition promotion. These customers may have previously purchased from Penhaligon’s therefore stay loyal to brands.
References:
Chevalier, M. and Mazzalovo, G. (2008) Luxury Brand Management. Singapore: Saik Wah Press Ltd.
Goyat, S. (2011) ‘The basis of market segmentation: a critical review of literature’, European Journal of Business and Management, 3(9).
Hills, K. (2017) Made in UK Label is one of the Most Respected in the World Finds Survey. Available at: https://makeitbritish.co.uk/made_in_britain/made-in-uk-label-is-one-of-the-most-respected-in-the-world/ (Accessed: 25 April 2017).
Monster (2017) Average Salary Information for the UK. Available at: https://www.monster.co.uk/career-advice/article/uk-average-salary-graphs (Accessed: 25 April 2017).
Penhaligon’s (2017) Home. Available at: https://www.penhaligons.com/ (Accessed: 25 April 2017).
Thomas, E., Serwicka, I. and Swinney, P. (2015) Urban Demographics. Available at: http://www.centreforcities.org/wp-content/uploads/2015/07/15-07-20-Urban-Demographics.pdf (Accessed: 25 April 2017).
UK Population (2017) Population of London 2017. Available at: http://ukpopulation2017.com/population-of-london-2017.html (Accessed: 25 April 2017).
Visit Britain (2014) Welcome to our Media Centre. Available at: http://media.visitbritain.com/?service=feature&action=show_content_page&language=en&feature=972 (Accessed: 25 April 2017).
Wilson, E. (2009) Know Your Target Market. Available at: https://www.entrepreneur.com/article/202334 (Accessed: 25 April 2017).
WJSchroer (2017) Generations X,Y, Z And The Others. Available at: http://socialmarketing.org/archives/generations-xy-z-and-the-others/ (Accessed: 25 April 2017).
Wright, R. (2006) Consumer Behaviour. United Kingdom: Thomas Learning.
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