Market Segmentation and the PRIZM NE System

Mar­ket seg­ment­a­tion is a meth­od of group­ing people with sim­il­ar char­ac­ter­ist­ics, primar­ily for mar­ket­ing pur­poses.

A num­ber of years ago, USA Today described in detail the inform­a­tion large con­sumer seg­ment­a­tion busi­nesses track and use to group us. It’s an eye-open­ing read:

The [con­sumer seg­ment­a­tion busi­nesses] are pin­point­ing who lives where; what they’re most likely to read, drive and eat; how many kids they have; and where they shop. And they are doing it with unpre­ced­en­ted pre­ci­sion. They are going far bey­ond the char­ac­ter­ist­ics of people in cer­tain ZIP codes to details about people in spe­cif­ic neigh­bor­hoods — even indi­vidu­al house­holds. […]

Most of the inform­a­tion they gath­er is pub­lic: the Census and gov­ern­ment records of births, deaths, mar­riages, divorces, prop­erty deeds, tax rolls and car regis­tra­tions. What’s not pub­lic, people give away. They do it every time they fill out a war­ranty card, answer a sur­vey, buy a car or use their fre­quent shop­per­’s cards at drug­stores and super­mar­kets.

The art­icle notes that there were/are five com­pan­ies that offer this ser­vice to busi­nesses, and I decided to look fur­ther at the ser­vice offered by the old­est of these com­pan­ies: the 30 year-old Nielsen Clar­itas PRIZM NE sys­tem.

The sys­tem is fas­cin­at­ingly craf­ted, split­ting indi­vidu­al U.S. house­holds into 66 demo­graph­ic­ally and beha­vi­or­ally dis­tinct ‘seg­ments’. Each of these seg­ments con­tain inform­a­tion on a mem­ber­’s likely: age range, edu­ca­tion level, race, homeown­er­ship status, employ­ment status (and job type) and their typ­ic­al life­style pref­er­ences (e.g. likely travel des­tin­a­tions, favour­ite shops, typ­ic­al hob­bies, likely read­ing habits, etc.). These 66 seg­ments are then fur­ther seg­men­ted into one of 14 broad­er social groups by tak­ing into con­sid­er­a­tion their afflu­ence and loc­a­tion (i.e. urb­an, sub­urb­an, second city and town and rur­al).

These two doc­u­ments I man­aged to find are def­in­itely worth flick­ing through if you’re inter­ested: