Once the market for a product has been segmented using relevant variables, then the next step is to develop rich profiles of the resultant segments. To illustrate this process, I will use the example of the market for surfboards in Australia.
An example - Segmenting the market for surfboards
Lets suppose that we are the manufacturer of a line of high performance surfboards. Visit the Maddog website. To determine our key target markets, we first need to segment the market for surfboards.
Information on participation on participation in all surf sports (not just surfing) can be gathered from the ABS - publication 4177.0 - Participation in Sport and Physical Activities. According to the ABS (2000), 2.1% of the Australian population (289,400) participate in surf sports (3.6% (247,200) males and 0.6% (42,200) females). A breakdown of participation on a state basis by gender and age is provided in tables 1 and 2.
Table 1: Participation in surf sports in Australia by gender (1999-2000)
| Region/state | Males | Females | Total |
| New South Wales | 97,800 | 9,700 | 107,600 |
| Victoria | 38,600 | 11,600 | 50,200 |
| Queensland | 52,200 | 12,400 | 64,600 |
| South Australia | 22,600 | 2,200 | 24,800 |
| Western Australia | 30,400 | 4,300 | 34,600 |
| Tasmania | 2,400 | 1,200 | 3,700 |
| Northern Territory | 3,100 | 600 | 3,600 |
| TOTAL (Australia) | 247,200 | 42,200 | 289,400 |
(Source: ABS 2000, publication 4177.0, pp. 8-16)
Table 2: Participation in surf sports in Australia by age
| Age category | Number |
| 18-24 | 83200 |
| 25-34 | 72400 |
| 35-44 | 61500 |
| 45 and over | 72300 |
| TOTAL | 289400 |
(Source: ABS 2000, publication 4177, pp. 8-16)
Selecting relevant variable
The following variables are considered to be relevant to surfboards. Note the need to provide justification and where possible to provide a source to support your opinion.
| Base | Variable | Description | Justification |
| Geographic | Region | Eastern sea-board, Coastal regions in SA and WA | it is assumed that most surfers are located in coastal regions |
| City size | 100,000 + | city must be large enough to warrant an outlet | |
| Density | urban, suburban | population must be large enough market to be sustainable | |
| Climate | Warmer climates | it is assumed that surfing is more popular in warmer climates | |
| Demographic | Age | 14 - 55 years | assumed typical age range for surfing (breakdown of participation for over 45 years is not available)* |
| Sex | males and females | both sexes, however more males involves in surf sports (3.6%) than females (0.6%)** females may prefer a lighter, shorter and more feminine looking board. | |
| Family lifecycle | single or young married empty nest males |
most likely single as surfing is time consuming or could be young married. however, it also appears that empty nest males are involved in surf sports | |
| Occupation | students, unemployed, employed and professional surfers | mostly recreational surfers and some professional surfers | |
| Psychographic | Lifestyle | active, outdoor, healthy - look at me VALS segments | surfers typically have an outdoor, healthy, and active lifestyle |
| Behavioural | Purchase occasion | **non-organised (258,900) or organised (30,500) | could be purchased for self or a gift, or could be purchased by professional surfer |
| Benefits sought | good performance, lightweight, quality, style | both professional and non-professional surfers want a quality product that performs well and looks good. Less emphasis on price for professional surfer who may require a custom-made board | |
| User status/rate | ***professional and non-professional surfers, potential surfers | focus on both regular and new surfers | |
| Loyalty status | loyal, brand conscious | surfers are usually brand loyal and would need to be persuaded to adopt new product. professionals may be prepared to be innovative. | |
| Attitude | enthusiastic, positive and indifferent | good attitude toward product and brand required for adoption. Indifferent people could be persuaded. |
(*Source: ABS (2000) publication 4177.0, p. 8)
** includes all surf sports not just surfing
** *frequency of participation figures are available on page 18 of ABS (2000) publication 4177.0.
Information on surfing is not that easy to obtain, so assumptions need to be made. Of course, if you were employed in the industry, you would probably have a budget to purchase reports from previous research or to collect primary data.
Example of three segment profiles
By applying the variables considered relevant to this product (surfboards), we can identify a number of market segments. A description (profile) of what I consider to be three key market segments has been provided below. You will note that the three segments presented here are identical on many key variables, but to be a distinct segment they must differ on at least one key variable. However, the variables that segments do not differ on are still relevant to the product category, as they distinguish these key segments from people who have less need or desire to purchase a surfboard. Further, these variables provide a basis for a rich and full description of the market segments to be targeted.
| Variable | Segment 1
Young male surfers - recreational |
Segment
2
Young male surfers - professional |
Segment
3
Young female surfers - recreational |
| Region | Eastern sea-board, Coastal regions in SA and WA | Eastern sea-board, Coastal regions in SA and WA | Eastern sea-board, Coastal regions in SA and WA |
| City size | 100,000 + | 100,000 + | 100,000 + |
| Density | urban, suburban | urban, suburban | urban, suburban |
| Climate | warmer climates | warmer climates | warmer climates |
| Age | 14-24 years | 18-30 years | 14-24 years |
| Sex | male | male | female |
| Family lifecycle | single | single or young married | single |
| Occupation | unemployed, student or employed | professional surfer | unemployed, student or employed |
| Lifestyle | recreational surfer, active, outdoor, healthy, look at me VALS segment | professional surfer, active, outdoor | recreational surfer active, outdoor, healthy, look at me VALS segment |
| Purchase occasion | personal or gift | event or competition | personal or gift |
| Benefits sought | good performance, lightweight, quality, style | quality and performance is paramount - custom-made board | style, lightweight, performance |
| User status/rate | regular or potential surfers | heavy or regular surfers | moderate, regular and potential surfers |
| Loyalty status | loyal, brand conscious | loyal but innovative | brand conscious |
| Attitude | enthusiastic, positive or indifferent | enthusiastic and positive | enthusiastic, positive or indifferent |
There are other attractive market segments for surfboards including empty nest males (45 plus) who may be able to afford an upmarket surfboard. However, I have a feeling that these empty nest males may be more involved with surf life saving clubs than actually surfing. If anyone has any better information on the profile of the surfing population, please email me.
Next step - Click here to read about selecting target markets
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