Market Segmentation

Market Segmentation

Market Segmentation

Activision Blizzard is a publicly traded company, Nasdaq: ATVI.  Activision Blizzard was the world's second largest gaming company based on revenue just after Nintendo (Softwaretop100.org, (2014).  They have created some of the most popular online games in the past decade including the Diablo series and World of Warcraft.  This paper will seek to take a look at the company's ideal customer base for a new product.

Demographic Characteristics

According to Kotler & Keller (2011), "In demographic segmentation, we divide the market on variables such as age, family size, family lifecycle, gender, income, occupation, education, religion, race, generation, nationality, and social class" (p. 216, para. 3).  These types of variables are popular with marketers because they are usually associated with what a consumer will need or want (Ibid, 2011).  In regards to the age group of the target consumer Activision Blizzard can be looking at consumers starting at the age of around 8-years-old to adults in their mid-to-late 40's.  This can be furthered refined to the age that most start working and are still working, such as 18-years-old to mid-to-late 40's.  The reason for this is that online gaming often includes some kind of subscription or online purchase to keep playing.  This writer has been playing online games since 2004 and has observed many variations of online gaming and has seen how they have improved and failed.  Family size does not have to be necessarily taken into account, however, online games because of their social nature will often have a whole family playing one game.  Gamers grow old with the games they play because of the time commitment people put into them.  Gen X's and Gen Y's are the best market.

When looking into the life stage of the consumer marketers will look at variables that define what is their major concern (Kotler & Keller, 2011, p. 217, para. 2).  These variables include such things are they going through a divorce or taking care of an older parent (Ibid, 2011).  In the opinion of this writer understanding where their consumers are will greatly help the marketers in determining what kind of game content is needed so that they can help consumers with what they are going through.  Video games have often worked as an "escape" for people so this will be good for a gaming company.  Gender does not have to be taken into consideration too much as video games crosses both genders.  However, it is important to consider them as men and women do have different attitudes and they also behave differently (Kotler & Keller, 2011, p. 217, para. 3).  This goes the same for considering race and culture.  In the opinion of this writer the consumer’s generation is more important.

Psychographic Characteristics

"Psychographics is the science of using psychology and demographics to better understand consumers" (Kotler & Keller, 2011, p. 225, para. 8).  Buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values (Ibid, 2011).  Tools such as the Strategic Business Insight’s (SBI) VALS™ framework are used to help identify groups.  Here 8 groups are determined: Innovators, Thinkers, Achievers, Experiencers, Believers, Strivers, Makers, Survivors.  When developing video games, a company like Activision Blizzard could benefit by knowing how these different groups mind sets work so as to build a video game or game in general based on what fits the customers.  They can add, for example, a feature that allows people to create or build structures within the online space.