Segmenting the Market Segmentation: Maria\'s

Segmenting the Market

Market segmentation: Maria's Diamonds

In terms of age-related market segmentation, the prospective luxury jewelry store owner Maria Lopez would be well-advised to target a Generation X market, rather than a Generation Y market segment. First of all, on a very basic level, Generation X is older than Generation Y Generation X is more likely to possess the disposable income required to buy luxury diamond jewelry that costs in excess of $5,000 per item. Generation Y has been particularly hard-hit by the current recession: as new entrants into the job market, they have often been the first to be fired, and the last to be hired. They are mired in student loans -- and some Generation Yers have high levels of credit card debt, a hold-over from their years in college.

Generation Yers, even more so than Generation Xers, have been reluctant to flee the comfortable nests of their parent's homes. This has only intensified, given the fact that many of them cannot afford to leave home, even if they desire to do so. Thus marriage and buying a diamond engagement ring is not a likely item on many a Generation Y graduate's future to-do list. Even if a Generation Yer does marry, the idea of diamonds and tangible, material goods as a sign of commitment may not be as attractive to a member of this generation as previous generations, given the collective memory of struggling during the recent recession.

Overall, Generation Y has been characterized by more equitable relations between the sexes, and the demand that the groom spend several months salary for his fiancee's ring may be less appealing for a Generation Y bride, who might believe that the money would be better-spent on a new home, a vacation, paying down credit card and student loan debt, or used as future savings. Parents may have less money to spend on elaborate weddings for their Generation Y offspring, and even romantic Generation Y couples will need the money traditionally used to buy an engagement ring for the ceremony itself. Generation Y couples are also more likely to shoulder the burden for the wedding, rather than insist that the bride's family buy the wedding and the groom buys the engagement ring.

Rather than expensive jewelry and fashion, Generation Y tends to be more interested in electronics and other accoutrements of the digital age. Generation Y consumers may be more apt to invest in new computers, iPads, and the latest 'tricked out' iPhone rather than jewelry. Even if a wealthy Generation Y consumer has the financial means to invest in electronics and jewelry, tangible, material goods might seem less important than the virtual items more valued by Generation Y

Instead of focusing on Generation Y, stressing the values of Baby Boomers and older individuals might be a more feasible segmentation strategy for Maria. The classic nature of a diamond gift is likely to appeal to affluent, long-married Baby Boomers, who are seeking to cement their union in a more traditional fashion, and have less interest in buying the 'next new thing' in electronics. Also, given the recent economic downturn, the idea of investing in jewelry might be seen like an attractive wealth-protection strategy.