Consumer Behaviour Segmentation - Session 3

Sonali R Saldanha, Asst. Prof , NIFT- Mumbai

Market segmentThe process of dividing a market into distinct subsets of consumer with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix.


3 Phases of Marketing Segmentation


Phase 1Market Segmentation

Phase 2Target Market & Marketing Mix Selection

Phase 3Product / Brand Positioning

Need of segmentationNeed, want and desire are not same.The primary advantage is cost reduction.It avoids head on competition in the market

place.


How segmentation operates

Segmentation studies are designed to discover the needs and wants of specific groups of consumer, so that specialized goods and services can be developed and promoted to satisfy each groups needs.

It is also used to guide the redesign, the reposition, or extending the product targeting to a new consumer segment.


Segmentation strategies The first step in developing a segmentation strategy is to select the most appropriate base on which to segment the market.

Eight major categories of consumer characteristics provide the most popular bases for market segmentation.


Geographic factorDemographic factorsPsychological characteristicsSociological variablesUse related characteristicsUse-situation factorsBenefit soughtHybrid segmentation.


Geographic segmentation

In geographic segmentation, the market is divided by location. The theory behind this strategy is that people who live in the same area share some similar needs and wants and that these needs and wants differ from those of people living in other areas.

Eg : Tutorials in Kharghar rather than Kalamboli.

Eg : Woollens in North India rather than in South India.


Demographic segmentation

Demographic characteristics, such as age, sex, marital status, income, occupation and education are most often used as the basis for market segmentation. Demographics refers to the vital and measurable statistics of a population. Demographics help to locate a target market.


Psychographic segmentation

Psychographic characteristics refers to the inner qualities of the individual consumer. Consumer segmentation strategies are often based on specific psychological variables.1. need and motivation2. personality3. perception4. attitude, etc.


PSYCHOGRAPHICS SEGMENTATION

Psychographic segmentation is done on the basis of psychological characteristics of an individual consumer such as one’s attitude, beliefs, values, lifestyle, perceptions, mindset, learning and motivations.

Sonali Saldanha, Asst Professor, FMS Mumbai

Socio-cultural segmentationSocio-cultural variables such as group and culture, provide further bases for market segmentation. For example, consumer markets have been successfully subdivided into segments on the basis of stages in the family life-cycle, social class, core culture values, etc

Eg : No Non – Veg in Jain Societies. Cake shop near a Church


Use related segmentation

An extremely popular and effective form of segmentation categorizes consumers in terms of product, service, or brand usage characteristic, such as usage rate ( volumes), awareness status, and degree of brand loyalty.

Eg : How many I use ? Which one I use ? Eg : How many times I had noodles. ??

Maggi ?? Eg : Mobile Refill – How Often to charge ? Which

one?


Usage-situation segmentationOccasion or situation often determines what consumers will purchase or consume.Marketers recognize that the occasion or

situation often determines what consumers will purchase or consume. For this reason, they sometimes focus on the usage situation as a segmentation variable.

Eg : Cards on Valentine Day Party on Promotion Medicines on a outburst of a disease.


Benefit segmentationMarketing and advertising executives constantly attempt to isolate the one particular benefit that they should communicate to consumers.

Changing lifestyle plays a major role in determining the product benefits that are important to consumers and provide marketers with opportunities for new product and services.

Eg : Toothpaste that eliminates cavities, reduce plaque, herbal and strengthen gums.

Eg : Benefits desired when purchasing shampoo include, dandruff prevention, making hair smell nice, making hair soft and manageable, inexpensive, preventing baldness, being mild and gentle, restoring luster, etc


Hybrid segmentationMarketers commonly segment markets by combining several segmentation variables rather than relying on a single segmentation base.

1. psychographic-demographic2. geo-demographic3. VALS 2 ( Value And Lifestyle Segments )


LIFESTYLE

The most popular method of understanding the consumer or consumer behavior.

It is defined as patterns in which people live and spend time and money reflecting a person’s Activities, Interests and Opinions ( AIO’s) as well as demographic variables discussed earlier. Lifestyles change more rapidly.

Extremely important to monitor changes in lifestyle trends.

Ex: Products are well-defined and targeted as per the lifestyle of any particular client. 1)Massage chairs2)Dhara ad with Soha n Sharmila3) Advancement in Beauty Treatments4) Online Banking / Internet Reservations etc.


VALS (Values and Lifestyle systems)

A widely used approach to study lifestyle. Lifestyle can be categorized under eight heads.

1. Actualizers: Successful, active, sophisticated consumers with many resources and high self esteem. Image conscious.

2. Fulfilleds: satisfied, mature, comfortable. Pays importance to functionality, value and durability.

3. Believers: principle oriented, conservative, follow general beliefs. Less experimental in terms of products. Prefer proven and popular brands.


4. Achievers: Career-oriented people, prefer predictability as opposed to risk and self discovery. Prefer prestigious brands being symbolic of their success to the world.

5. Strivers: seek self definition, security. Concerned about the approval of others. Strive to be like someone but are short of resources to attain their goal.

6.Experiencers: Young, enthusiastic and Highly experimental. Prefer variety and excitement.

7.Makers: Focus on self-sufficiency, live within the context of family and work. Do not go out of the frame. Prefer strictly functional and requirement focus products only.

8.Strugglers:Poor and poorly educated. concerned with issues of the moment. Extremely cautious. Seeks security and safety in the products.


VALS IIVALS 2 is a marketing and consulting tool that helps businesses worldwide develop and execute more effective strategies. The system identifies current and future opportunities by segmenting the consumer marketplace on the basis of the personality traits that drive consumer behavior. VALS applies in all phases of the marketing process, from new-product development and entry-stage targeting to communications strategy and advertising.



Implementing segmentation Concentrated marketing – For a well-defined,

specific segment of the consumer population

Differentiated marketing - also called multisegment marketing

Counter-segmentation - A strategy in which a company combines two or more segments into a single segment to be targeted with an individually tailored product or promotion campaign.


THANK YOU


Documents

Consumer Behaviour Segmentation - Session 3