Another concept concerned with market segmentation is marketing mix. Psychographic Segmentation Psychographic segmentation allows marketers to segment market based on consumer personality traits, lifestyle and social class. However, its current product design, market segmentation strategy and target consumers strategy cannot help IKEA achieve that aim. Therefore, its products are more colorful and novel. Overview: Segmentation, Targeting & Positioning 20. Psychographic Segmentation This segmentation process works on a premise that consumer buying behaviour can be influenced by his personality and lifestyle. B&Q’s most frequently used promotional measure is discounting, while IKEA publicizes its products by free catalogue. demographic segmentation, psychographic segmentation, and behavioral segmentation. Psychographic Segmentation Psychographic Segmentation: Opportunities and Challenges There are four major types of market segmentation; geographic segmentation, demographic segmentation, psychographic segmentation, and product-related segmentation. Companies segment customers into one orseveral psychographic traits. Here are a couple of common (andnot-so-common) psychographic segmentation types with examples for each. Looking for a flexible role? 3. Consumer selections and the reasons that they will lean towards a product more than others are affected by their … They separate their consumers into teams in accordance with types of market segmentation: demographics, psychographics and behavioral. Example: IKEA home renovation, consultancy services. IKEA’s target markets are lower home furnishing class, so, black American and Hispanic are the major target market for IKEA if we analysis their demographic characteristics. Yet, only 33% of companies using it say they find it significantly impactful. The reasons are that Scandinavian design and style is just a niche, that the market segmentation is narrow and that the target consumers are also just a small portion of the mass furniture buyers. As the biggest competitor of IKEA, B&Q is a leading company in home decoration and gardening in Europe. Such re-conceptualization and extension of TPB is consistent with psychographic segmentation theory (e.g., Barry & Weinstein, 2009) which argues that … If the market is small, it may make it smaller. Lifestyle segmentation is one of the types of marketing segmentation and comes under the psychographic segmentation. How to increase brand awareness through consistency; Dec. 11, 2020 Therefore, product is more than physical stuffs sold by stores (Hall et al, 2008). Behavioral segmentation Usage rate Potential market Ex-users Brand loyalty IKEA Psychographic segmentation Problem recognition Types of furniture Minerva model Segmentation Demographic segmentation Typical market for who? (IKEA, 2010 b), Different from IKEA, B&Q is specialized in one stop shopping, in which, customers can buy most decorations and accessaries they want in one store. Hobbies This article will talk you through the ones in bold. So far, IKEA is the largest and most international furniture emporium, globally. I love writing about the latest in marketing & advertising. When it comes to market entry in China, a consumer is a central interest. Psychographic Segmentation and The VALS Framework The major tendencies of Four groups with Higher resources: 1.Innovator 2.Thinker 3.Achiever 4.Experiencer The major tendencies of Four groups with Lower resources: 1.Believer 2.Striver 3.Makers 4.Survivors 31. Ikea is the provider of affordable, stylish, modern architectural designed furniture, kitchenware and appliances that are shaping the comfortable living of people around the world. However, its current product design, market segmentation strategy and target consumers strategy cannot help IKEA achieve that aim. IKEA Case Study and Strategic Marketing Plan Review By Professional Marketing Consultancy Group (List Group Members) Table of Contents 1.0 Executive Summary 3 2.0 IKEA Company Profile 4 3.0 Segmentation Bases Applied by With psychographic segmentation, companies examine consumer's lifestyles, personality, interests, opinions, social class, habits and activities to better ascertain their needs. Psychographic segmentation is a confusing notion for many marketers. According to OPPAPERS (2010) and B&Q (2010c), both of them set the prices of their products reasonable and appropriate. Besides, they both have various promotional skills, such as discounting and installation service. Psychographic segmentation is a method used by marketers to find the best customers for their products based on their interests, needs, and behavior. (IKEA, 2010 f). Social status 7. This section is followed by three analytical chapters representing application of three formerly The company have an exclusive museum to showcase its creativity in Almhult, Sweden. VAT Registration No: 842417633. It adopts innovative manufacturing techniques to products at a lower cost. Although both of these two companies have large sales volumes, it is still a necessity to enhance marketing mix, for their installation service charges are slightly higher than people’s expectation. Vision- “To create a better everyday life for the many people”. In 1989, Emanuel Demby, who coined the term psychographics, revised his original definition of the market segmentation tool, as conceived in 1974, to read: Do you have a 2:1 degree or higher? The bases of segmentation could be demographic and psychographic. Interests 4. Psychographic segmentation is a confusing notion for many marketers. Company Registration No: 4964706. One of the bases of segmentation is to market the product sustainability. Social class 2. 11 Psychographic Segmentation - In this fragment, this fundamentally stresses on the client's conduct, regular exercises, individual well-creatures and their convictions. On the other hand, it is suggested that B&Q’s products could be more fashionable and colorful in order to attract younger consumers. Similar to IKEA, B&Q also has policies to show its social responsibility. (B&Q, 2010a) Its selling point is a variety of products for home decoration. There are major ethnic subdivisions within the U.S. Hispanic population, since Hispanics in the U.S. originate from more than 20 different countries. Market segmentation is classifying consumers into groups according to their characteristics (Hall et al, 2008) and set certain groups as targets. Type of market segmentation strategy in China crucially depends on the nature of business. (B&Q, 2010 a). Presently, there are above 60 stores around the world, among which, the largest one in Beijing. If IKEA chooses behavioural segmentation, then customers will be divided according to their buying pattern like usage frequency, benefits sought, usage occasions and brand loyalty. Home furnishing industry is facing intense competition from Local outlets & online e-commerce start-ups. Registered Data Controller No: Z1821391. (IKEA, 2010 b), B&Q stores supply with around 40,000 products for home fittings, such as lights, door handles and lawnmowers. (B&Q, 2010 c). The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S … According to statistical data, there are over three million customers walking into B&Q per week. IKEA, with its range of affordable products … (B&Q, 2010a) Moreover, B&Q’s operating system is GMS (General Merchandise Store), thus all products in B&Q are placed on shelves for consumers to choose freely. IKEA coordinate with supply chain stakeholders like designers, material suppliers, product developers and its stores all over the world to make their products available to the consumer. Females of normal age of 38 visited IKEA the most. (B&Q, nd). (Hall et al, 2008). Free resources to assist you with your university studies! IKEA’s target markets are lower home furnishing class, so, black American and Hispanic are the major target market for IKEA if we analysis their demographic In order to fulfill their social duties, they both have actions in making contribution to the society. Marketing However, IKEA’s consumers do not need to pay extra charges for assistance and transportation, which is a quite attracting policy. Market segmentation strategy in China helps to identify, evaluate and target potential consumers. Coordinating with designers across the world and testing their ideas so as to provide the growing home furnishing needs is one of the biggest advantages that Ikea has over other players in the, IKEA has garnered respect in eyes of the community it serves and for the employees who work for them which has created positive, Long-term strategic partnership across the, IKEA coordinate with supply chain stakeholders like designers, material suppliers, product developers and its stores all over the world to make their, Home furnishing industry is facing intense competition from Local outlets & online, Marketing Strategy of IBM - IBM Marketing Strategy, Marketing Strategy of Parle - Parle Marketing Strategy, Marketing strategy of Dell - Dell marketing strategy, Marketing strategy of Aquaguard - Aquaguard marketing strategy, Marketing Strategy of Apple Inc - Apple Marketing Strategy, Marketing strategy of BMW - BMW marketing strategy, Marketing Strategy of Dettol - Dettol Marketing strategy, Marketing strategy of Indigo Airlines - Indigo Marketing strategy, Marketing strategy of KFC - KFC Marketing strategy, Marketing Strategy of Alibaba - Alibaba Marketing Strategy, Marketing Strategy of Axa - Axa Marketing Strategy, Marketing Strategy of Baidu - Baidu Marketing Strategy. IKEA segmentation, targeting and positioning involves a set of consequent marketing decisions that constitute the core of company’s marketing strategy. In addition, it has a website for consumers to search the details of their products. Segmentation refers to dividing population into groups on the basis of their common traits and characteristics. demographic segmentation 3.2.1 target market segments: pg. Segmentation, targeting, positioning in the Marketing strategy of IKEA –, Competitive advantage in the Marketing strategy of IKEA –, BCG Matrix in the Marketing strategy of IKEA –, Distribution strategy in the Marketing strategy of IKEA –, Brand equity in the Marketing strategy of IKEA –, Competitive analysis in the Marketing strategy of IKEA –, Market analysis in the Marketing strategy of IKEA –, Customer analysis in the Marketing strategy of IKEA –, SQ3R – Meaning, Benefits, Steps and Strategy, What is Redlining? Market segmentation is classifying consumers into groups according to their characteristics (Hall et al, 2008) and set certain groups as targets. These traits range between personality to education. In final result, both IKEA and B&Q are successful furniture sales businesses. Geographic segmentation is different from the other types of market segmentation (especially psychographic and behavioral) because it requires fewer data points. Academia.edu is a platform for academics to share research papers. Psychographic segmentation is further discussed later in the plengdut post, where we consider hybrid segmentation strategies that combine psychographic and demographic variables to create rich descriptive profiles of consumer Why do this? Psychographic segmentation is segmenting a market based on personality, motives and lifestyles. The bases of segmentation could be demographic and psychographic. Finally, psychographic segmentation, which is also called lifestyle segmentation, divides the total population into groups based on the consumer's motivation, attitudes, preference and values. These clusters will form subsets (or segments) of customers based on their: 1. Companies like practicer, TepeHome, Kelebak, EnglishHome, Fabfurnish.com and much more are dealing in online and Offline mode while IKEA has only franchised stores which mean low infrastructure cost and high visibility. McDonalds segmentation, targeting and positioning is one of the integral components of its marketing strategy. Coordinating with designers across the world and testing their ideas so as to provide the growing home furnishing needs is one of the biggest advantages that Ikea has over other players in the markets. Blog. Targeting Targeting implies choosing specific groups identified IKEA IKEA’s aim is to open 50 stores in USA by 2013. Lifestyle is how a person lives his life. IKEA’s aim is to open 50 stores in USA by 2013. Such activities inform marketers about what they do, where they are engaged and how they entertained themselves. It is also recognized as the 4Ps, consisting of product, price, place and promotion. This means that the products in Ikea aims to attract a particular market segment than the mass market (Steenkamp & Ter Hofstede, 2002). Psychographic Segmentation and The VALS Framework 32. Segmentation Strategies Country of Origin. These activities inform marketers about the consumers’ routine suppose the person is a finance guy and doesn’t like outdoor activities and void meeting with people. Psychographic segmentation can be conducted using a variety of methods that include profiling likely participants, web and field-based customer service applications, scraping data from various user platforms and social media, pricing/value and price sensitivity studies, surveying and interviewing customers, creating online communities of customers, focus groups, supply-chain … Furthermore, B&Q has professional teams to help customers designing and decorating in their own styles. Psychographic market segmentation means dividing the market into segments based on variables such as social class, lifestyle and personality. (Guangzhou IKEA, 2010), B&Q fixes most commodities with appropriate prices for the average consumer. Psychographic; social class, lifestyle However, Balaji et al (2016) maintain that McDonalds only uses demographic segmentation strategy with age as the criteria. It has around 380 stores worldwide and is driving the furniture market in the developing nations. I am a serial entrepreneur & I created Marketing91 because i wanted my readers to stay ahead in this hectic business world. The basic promotional tool of IKEA is its free catalogue with a list of its products. Psychographic segmentation is quite similar to behavioral Psychographic segmentation. The other bases for which IKEA segments their market in the lifestyles psychographic and benefit segmentation. It is important in marketing strategy, with a goal of satisfying consumers’ needs. Many national & international players are giving head-on competition to IKEA. Market Segmentation The furniture market in India can be segmented into four major categories as shown below. The products of Both B&Q and IKEA are complementary. Opinions 9. Our academic experts are ready and waiting to assist with any writing project you may have. SWOT analysis – Here is the SWOT analysis of Ikea. If the market is small, it may make it smaller. SmartThings message is turning your home into a Smart House in other to make a living better. Segmentation involves dividing population into groups according to certain characteristics, whereas targeting implies choosing specific groups identified as a result of segmentation to sell products. However, customers are able to buy raw materials from B&Q and make any product. 1st Jan 1970 Both IKEA and B&Q construct their own websites to introduce their commodities and offer consumers with e-shopping service. IKEA, with its range of affordable products will be able to capture three of the four segments. IKEA should require each individual store to hold some type of kid-friendly event (at least) once every two months. (B&Q, 2010 e). Market segmentation consists of four types, including geographic, demographic, psychographic and behavioral type. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. The aim of this service is to provide convenience for customers who do not have much time to deal with decoration. Segmenting is dividing a group into subgroups according to some set ‘basis’. Activitiesconsists work, hobbies, social events, vacation, entertainment, community, club membership and social event of consumers. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Further, there are floor pained arrows to lead consumers quickly find the items they need. Besides, it also offers discount to attract consumers. The differences in 4Ps between IKEA and B&Q were also discussed in the paper. Market segmentation creates subsets of a market based on demographics, needs, priorities, common interests, and other psychographic or … 3. In short, companies divide customers based on a variety of traits. Segmentation, targeting, positioning in the Marketing strategy of IKEA – Demographic, psychographic & geographic segmentation is used by the company to segment the market to cater to the changing market dynamics of home On the other hand, one of the differences is their operating modes. Values 5. Psychographic segmentation sounds more complicated than it is. However, once you read more about psychographic targeting, you will be able to understand it better. psychographic segmentation is based on variables like lifestyles, personalities and social classes, whereas the demographic segmentation includes variables such as an individual’s age, income, sex, household size or stage in life. The objective of this report is to analyze how IKEA and B&Q deal with marketing mix and marketing segmentation. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Discount is an effective promotion B&Q uses to attract consumers. Psychographic segmentation is one which uses peoples lifestyle, their activities, interests as well as opinions to define a market segment. Psychographic Segmentation is not only for big companies, but it can also be used by SMBs and on their website. 18. Although their promotional measures are different, they have the same purpose to create more profits. Historically, settlement patterns of Hispanics in the U.S. have been concentrated by ethnicity, with those of Puerto Rican origin more likely to live in the Northeast. Therefore, knowledge of consumer’s needs and preferences is a key to success. If you need assistance with writing your essay, our professional essay writing service is here to help! Amazon.com Inc. Report contains a full analysis of Amazon segmentation, targeting and positioning and Amazon marketing strategy in general. The following table 2 illustrates IKEA segmentation, targeting and positioning: Type of segmentation Segmentation criteria IKEA target customer segment Geographic Region Europe, Americas, Asia & Australia, Russia Density Urban Demographic Age 22 and older Gender Males & Females Life-cycle stage Bachelor Stage young, single people not living at home Newly Married … 6 3.3 psychographic segmentation pg. See how to use behavioral segmentation in your marketing campaigns demonstrated by 7 examples and how personalization can get people to take action. Make your own animated videos and animated presentations for free. (Hall et al, 2008). They had partnered with 1002+ suppliers in 51 countries who help them in maintaining the quality of home furnishing /Kitchenware & appliances in its 380 stores worldwide. As a “total concept”, product refers to all merchandises and services provided by a business. As for B&Q, there are 371 stores in total, with 41 stores in China. (Hall et al, 2008). For example, all the products for a room are shown visually by being placed a single model room. segmentation, and product-related segmentation. Geographic Segmentation. (B&Q, 2010 c). Definition, Origin and Present Scenario, Strategic leadership – Definition, Skills and Characteristics. Psychographic Segmentation Social class is the single most used variable for research purposes, and divides the population into groups based on the occupation of the 'Chief Income Earner' (CIE), as such it can be seen as a socio-economic scale. Segmentation allows you to better develop your product because there will be a more precise match between the product and each segment needs and wants. You can follow me on Facebook. (OPPAPERS, 2010) One method IKEA uses is mantissa pricing, fixing the prices with 9s, such as 299, 699 and 799 yuan, giving customers an impression of cheapness. As a result, it offers a quick and effective route into personalized marketing and can offer tangible ways to reach potential customers using only their location as a starting point. Positive word of mouth, CSR activities and empowering their co-workers has helped the company in creating awareness and popularising their brand even in the markets in which they are not present. In comparison, IKEA’s targets are mainly young people who love innovative items, while B&Q focuses on one stop shopping with people who have not much spare time as its major consumers. The analysis itself consists of short description of IKEA at the beginning. *You can also browse our support articles here >. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. No plagiarism, guaranteed! The sales volume could be better if they can reduce the price to some extent. Prezi’s Big Ideas 2021: Expert advice for the new year; Dec. 15, 2020. Branding is the essential element when it comes to marketing your products. However, a most significant difference between them is that, IKEA only sells finished products, whereas B&Q provides raw materials as well. As for this, B&Q makes great efforts on environment protection in the procedures of product design, packaging and the use of materials. Marketing mix – Here is the Marketing mix of Ikea. (IKEA, 2010 a). SmartThings message is turning your home into a Smart House in other to make a living better. Ikea employs market segmentation strategy where the products are towards a particular target market. This means that the products in Ikea aims to attract a particular market segment than the mass market (Steenkamp & Ter Hofstede, 2002). Geographic Segmentation Psychographic Segmentation Behavioural Segmentation 3. 1) Social Class 8. Psychographic segmentationis the process of creating clusters of customers who share similar characteristics and then grouping them together. Segmentation, targeting, positioning in the Marketing strategy of IKEA – Demographic, psychographic & geographic segmentation is used by the company to segment the market to cater to the changing market dynamics of home furnishing, Kitchenware & appliances industry. They divide their consumers into groups in accordance with types of market segmentation: demographics, psychographics and behavioral. Use of psychographic segmentation will result in customers' grouping according to … Psychographic Market Segmentation Another group of variables suitable for market segmentation is the Psychographic one. The variations in 4Ps between IKEA and B&Q were also reviewed in the newspaper. IKEA is the world’s largest home furnishing retailer. In contrast, B&Q has more beneficial services such as discounting and installment payment. Your email address will not be published. (IKEA, 2010 e) It is worthy to mention that, IKEA also established a group named Social Initiative, aiming at strengthening the relationship between IKEA and the society. These bases range from age, gender, etc. IKEA targets people with a “do it yourself and save money doing it” kind of lifestyle. Long-term strategic partnership across the supply chain has helped the company in manufacturing and delivering the items on time. This means that the product is… Branching these togetherenables companies to choose the right psychographic segmentation variable(s)for their audience. These are majorly in the age group of 20-50 years. Furthermore, the IKEA products are mostly shown as models, which are fixed and limited. 6 3.4 behavioral segmentation 3.4.1 target market segments pg. IKEA targets young and fashionable people as its main consumers; in particular those love modern furniture and accessories. IKEA was in the process of opening new stores and in the development stages of its most innovative and well-known products of today, including the PONG chair and BILLY bookcase. The prices of B&Q products are a little lower than IKEA’s. American, young, and older subculture. Psychographic segmentation is one which uses peoples lifestyle, their activities, interests as well as opinions. By understanding their customer’s Demographic segmentation - IKEA applies segment bases for its market. All work is written to order. These are the consumers who have an inclination towards the stylish & modern home furnishing solutions. The analysis itself consists of short description of IKEA at the beginning. There are 5 different factors used to define psychographic segments. This group works together with UNICEF and Save the Children, with the purpose of giving all children a better life. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Promotion is to propagandize products through all measures available (Hall et al, 2008). Segmentation, targeting, positioning in the Marketing strategy of IKEA – Demographic, psychographic & geographic segmentation is used by the company to segment the market to cater to the changing market dynamics of home furnishing, Kitchenware & appliances industry. Demographic, psychographic & geographic segmentation is used by the company to segment the market to cater to the changing market dynamics of home furnishing, Kitchenware & appliances industry. If IKEA chooses behavioural segmentation, then customers will be divided according to their buying pattern like usage frequency, benefits sought, usage occasions and brand loyalty. Study for free with our range of university lectures! describes segmentation of consumer markets such as geographic segmentation, demographic segmentation, psychographic segmentation, and behavioral segmentation. IKEA. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. There are around 330 IKEA stores in 38 countries. The IKEA stores have scientifically classified all products so that consumers can quickly and easily find what they need. It was founded by Richard Block and David Quayle in Portswood, Southampton in 1969. Back in 1980, Arnold Mitchell developed VALS(values, attitudes, lifestyles) which became a technique for marke… Black Americans’ are consist on younger age group and to psychographic factors like attitude, interest, values, etc. Use of psychographic segmentation will result in customers' grouping according to … Besides, they both open stores in areas with large population. 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