Using PRIZM Look-up to Identify Consumer Markets

Michelle B. Kunz, Morehead State University, using Nielsen's My Best Segments.com
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Summary

This activity can be used to demonstrate how marketers use segmentation to identify consumer markets. The PRIZM segmentation system uses zip codes to identify lifestyle segments by geographic location. This activity demonstrates the concept of "You Are Where You Live" or in other words, "Birds of a Feather Flock Together." The online look-up tool identifies the different PRIZM lifestyle segments present in a zip code area.

Learning Goals

In this activity students will:
  1. Identify methods to segment consumer markets based upon geographic location
  2. Compare consumption patterns of consumers in different segments
  3. Discuss the use of geo-demographic segmentation

Context for Use

This activity is appropriate for any class topic discussing consumer segmentation. In particular it is relevant in a principles of marketing unit on market segmenting or a consumer behavior class, when discussing lifestyle segmentation.

Description and Teaching Materials

Students are provided with a situation scenario and asked to use the MyBestSegments.com PRIZM zip code look-up tool to identify consumer lifestyle segments by zip code location. If you are located in a large metro area, it can be sufficient to identify multiple zip codes within the city. However, if you are in a less populated area, you might want to identify several similar cities, and in advance, determine the segments present are sufficiently similar or different as needed by the assignment.

After students identify the consumer segments present in each location, have them review the lifestyle information relative to consumption that will help marketers determine a favorable location. This will require students to research the characteristics identified for each of the segments, under the Segment Lookup link. The first task is to identify the consumer segments in the location, and then to compare the segments for each zip code location. Then the students much select one location as the best "match" choice for consumers who will purchase this product/service. Student Handout for PRIZM geo-demographic assignment (Microsoft Word 27kB Aug10 10)

Teaching Notes and Tips

This assignment can be given between two days of lecture discussing segmentation strategies in a principles of marketing course, and during discussion of demographics and lifestyle in a consumer behavior class. With a little editing of the scenario presented, I have also used it as an introductory activity to segmentation in a principles class, and geo-demographics in a consumer behavior class. In this instance, you might change the scenario to something is more a comparative analysis of two or three zip codes, and then—after—discussing the results, have an in-class break-out discussion on applications relative to the course topic.

It is important to check the site prior to giving this assignment, as it is frequently updated, and the links do not always work the same way. I also make sure the graphics I use as identifier landmarks are still there, as the site is updated rather frequently; for example, the You Are Where You Live button has moved from the bottom left to the upper right-hand side of the page.

Students find this an interesting assignment, but I have found I have to be very specific in the information I want them to review, as well as the analysis they complete. Therefore, I try to give them specific questions to answer in the assignment, and then expand on the possible uses and applications in the following class discussion.

Assessment

General questions that can be used (and revised to specific instances):
  1. What consumer segments were identified in the results for each location?
  2. What types/brand of products are identified: cars, restaurants, magazine, tv shows?
  3. What demographics profile each of the segments: age, income, education, ethnic diversity, home?
  4. Which location will have the best consumer segment to purchase your product? Explain why you chose this one.

References and Resources

MyBestSegments

Segment Lookup, contains a description of each of the 67 segments