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: