AIO Analysis

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Group Members

Aafreen Babar

Fedora D’Souza

Lachish Awad

Melissa Nazareth

Rohit Kumar Gupta

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Flow of the presentation

• About AIO• Need for AIO• AIO Inventories• Caselet 1: Cuppa Noodles• Caselet 2:• Pros/Cons of AIO Analysis• Conclusion

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• Need for lifestyle segmentation• Lifestyle: A way of life or a style of living that

reflects the attitudes and values of a person• Tools of lifestyle segmentation:

– AIO– VALS

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Activity Based

Sports Shoe Company

v/s

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Interest Based

Rock Concert

v/s

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Opinion Based

Spirituality related Books

v/s

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Need for AIO

• To find people with similar lifestyles• To define and describe the target segment• To determine which lifestyle segments will

produce the most profitable customers• To better design marketing communications

– Ad pegs– Reduce spillage

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AIO inventories

Marketers develop two types of inventories:

o One is generalized inventory that can be applied across product categories and identifies broad segments such as homemakers, sports enthusiasts and fashion conscious consumers.

o Second category is specific to a product category for example a lifestyle inventory to describe internet users, purchasers of new car or users of high tech products.

GENERALIZED AIO INVENTORIES

• Generalized AIO inventory is developed by Wells and Tigert.

• They formulated 300 AIO statements and asked respondents to agree or disagree with each one on a five point scale.

• Typical statements were “I would rather stay home than go out for fun” and “I dress for comfort rather than fashion”

• Wells and Tigert then reduced these 300 items to 22 lifestyle dimensions by factor analysis, a method of grouping items that are highly correlated. 

Contd…..

• By using responses to the statements Wells and Tigert ascertained consumers as price conscious and fashion conscious and so on.

• Then they used these 22 lifestyle dimensions to describe and segment consumers.

PRODUCT SPECIFIC AIO INVENTORIES

• An example of product specific AIO inventory is one developed by a manufacturer to identify those most likely to buy new car.

• A group of lifestyle characteristics that were relevant to the purchase of a car was determined from focus group interviews with recent purchasers of these items.

• A sample of men were then asked to rate themselves on these characteristics

• Men were divided into those who were among the first to purchase new car (innovators ) versus those who purchased later(non innovators)

MEASUREMENT/USE OF AIO

• Measurement of the AIO is used by marketers as a research tool to determine influences on consumer behavior and appropriate consumer markets.

• Researchers will ask respondents to state how strongly they agree or disagree with a series of statements about their activities, interest, and opinions. Answers are linked to demographics . Questionnaires are typically quite lengthy and contain statements such as:

I would rather stay home than go out for fun. I dress for comfort rather than fashion. I enjoy watching talk shows on television. I am the kind of person who loves to make impulsive

purchases.

Likert scale questionnaire type

Strongly disagree

Neither Strongly agree

Question 1 2 3 4 5 6 71 Overall I am satisfied working

in this organisation 2 I prefer to spent time in my

home in leisure time 3 I am often expected to do

things that are not reasonable4 I have confidence in my

decision5 There is a friendly feeling

between management and staff

6 Management usually keeps us informed about things we want to know

Case 1: Cuppa Mania Noodles

• Nestle introduced Maggi atta instant noodles in 2005• Packaged in an easy to make and easy to carry Cup

format• Contains real vegetables and the goodness of Calcium• Tag line: Just add garam paani and carry on jaani!

• Initially carried out Demographic and Geographic segmentation

• Then later carried out the AIO analysis which focussed on consumer psychographics and lifestyle patterns

Are 24 hours in a day less for you?

• Strongly Agree

• Agree

• Neither Agree Nor Disagree

• Disagree

• Strongly Disagree

Are you open experimenting and trying out different things?

• Strongly Agree

• Agree

• Neither Agree Nor Disagree

• Disagree

• Strongly Disagree

You are okay spending Rs. 25 for breakfast

• Strongly Agree

• Agree

• Neither Agree Nor Disagree

• Disagree

• Strongly Disagree

Advantages of AIO

• Provides Psychological / Lifestyle profile of the consumers• To precisely define the right consumers of the products or

company• Helps marketers understand consumers consumption and

purchasing habits• Helps in development of effective positioning strategies

and effective achievement of marketing objectives • Like all other segmentation tools AIO minimizes risk of

targeting the wrong audience

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Limitations of AIO

• Overlapping of consumers in various categories so much that there is difficulty in differentiating the potential consumers

• It initially emphasizes on Activities, Interests and Opinions which is excessively narrow to categorize consumers

• It needs to broaden and include attitudes, values, demographics, media patterns, and usage rates

• Alienating other groups of low user index

Conclusion

• Lifestyle segmentation is one of the most effective ways to create segments for consumer products with the help of AIO tool.

• Because life style is highly predictive of many purchase behaviours, marketers attempt to characterize consumers' life style patterns by asking them questions about their activities, interests, and opinions. 

Thank you

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