Cyworld Case Analysis
Cyworld's market can be segmented many different ways using various factors to create the segments. Cyworld can demographically segment its market using statistics such as age, sex, and country. This can be done by breaking down Cyworld's users based on male/female, current country of residence, and then further grouping the users into age categories of 13-18 years old, 19-29 years old, 30-39 years old, etc. Cyworld can gain information on its market by further segmenting its users based on specific aspects of the website, such as activity level, purchases, and the amount of connections. For activity level segmentation, Cyworld would categorize users based on the amount of times he/she signs into the website per week, or the amount of time he/she spends on the website, and grouping them into high activity, medium activity, or low activity. Segmenting Cyworld's market by purchases would consist of the same process of grouping users into a high, medium, or low category based on the amount of money each user has spent in the last four months buying virtual items.
Segmenting Cyworld's market by the amount of connections groups users into high, medium, and low category based on the amount of relationships (friends/ties) each user has. Cutoff criteria for segmenting users based on connections, as well as purchases, should be set so that approximately 1/3 of users fall into each category.
The main segment that Cyworld should target are 20-29 year olds that have medium to high amount of connections, as this segment is the most likely to purchase virtual items and possibly start a site-wide trend for a particular purchase. Purchasing virtual items accounts for nearly 70% of Cyworld's revenue, and although the sale of virtual items is on the decline, this...