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Marketing theory. Behavioural segmentation

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Marketing theory. Behavioural segmentation

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Marketing theory. Behavioural segmentation

  1. 1. BEHAVIOURAL SEGMENTATION DEFINITION Form of market segmentation that groups consumers based on specific behavioral patterns they display when making purchasing decisions. By Monika Baranowska
  2. 2. BEHAVIOURAL SEGMENTATION Behavioural segmentation is a marketing strategy based on actual consumer buying behaviour. It divides the market into groups of customers according to their knowledge of, attitude towards, use of or response to a product. In order to divide customers into groups marketers look at their patterns of buying and using, patterns of spending money and time, their lifestyle and other factors. The objective of segmentation is to identify specific segments- niches and address needs or desires that are believed to be common. This enables marketers to target specific groups by developing advertising programs for each segment or creating new products to attract one or more segments. Behavioural segmentation has the advantage of using variables that are closely related to the product itself.
  3. 3. BEHAVIOURAL SEGMENTATION TYPES OF BEHAVIOURAL SEGMENTATION Benefits sought Occasion Usage rate brand loyality status user status buyer readiness stage
  4. 4. BEHAVIOURAL SEGMENTATION Customers are segmented on the basis of the benefits sought from purchasing a specific product. For instance hair shampoo can be targeted towards normal hair, colour hair, sensitive scalp, split ends, anti-dandruff etc. Other example would be a toothpaste that customer buys to have whiter teeth or protect his or her sensitive teeth. Discount or the appearance of a shop can also be a benefit. The other variable is the occasion when customers purchase, use or think of buying a product. For instance cereal advertisements encourage consumers to eat breakfast cereals on the "occasion" of getting up. However, consumption patterns can be changed by targeting `occasion`. The same cereal could be promoted as an anytime snack food. Research shows that during festival seasons consumers became less price sensitive and purchase more premium priced products. Therefore products such as chocolates, flowers and premium foods will sell out on Valentine’s Day.
  5. 5. BEHAVIOURAL SEGMENTATION Usage rate divides customers according to the level of usage they make of the product. We can distinguish heavy, medium or light users. Let’s take the example of beauty products. Heavy users will use and buy eye shadows and lipsticks quite often while light users will buy them rarely. Other example would be airlines that focus on frequent flyers, because they are a lucrative market and their needs are different than those who fly only once a year. The objective of an organisation should be to attract heavy users who will make a greater contribution to sales. Customers can be grouped according to their level of loyalty to the product. Consumers are loyal to brands at different levels. Some individuals will always buy a particular brand, others will buy this brand occasionally and ‘switchers’ will switch between brands. Many companies try to segment their markets into those where loyal customers can be found and retained as it is much more profitable than acquiring new customers. The best example of behavioural segmentation by loyalty can be seen in the hospitality sector where airlines, hotels and restaurants give their best to provide the best possible customer service so that they can retain their customer. User status groups customers based on whether they are potential users, first-time users, regular users, non-users or ex-users of a product which can be very useful
  6. 6. BEHAVIOURAL SEGMENTATION • The last variable is a Buyer readiness stage where customers are segmented according to their readiness to purchase the product. There are 6 stages of buyer readiness (awareness, knowledge, liking, preference, conviction and purchase). Sales promotion discounts, or personal selling through sales representatives may be used to encourage customer to purchase.
  7. 7. BEHAVIOURAL SEGMENTATION • The marketing concept calls for understanding customers and satisfying their needs better than the competition. The number one reason why people unsubscribe or opt-out of service is due to irrelevant messaging. Enticing all customers with the same offer or campaign is useless. Different customers have different needs, and it is rarely possible to satisfy all customers by treating them alike. Segmentation allows companies to better satisfy the needs of their potential customers so that the marketing effort is effective.
  8. 8. BEHAVIOURAL SEGMENTATION CONCLUSION The objective of behavioural segmentation is to identify specific segments of customers within a market that require custom tailored promotion.
  9. 9. BEHAVIOURAL SEGMENTATION THANK YOU References: Foundations of Marketing (2012) John Fahy and David Jobber, Berkshire, McGraw-Hill Higher Education http:// learnmarketing.net http://en.wikipedia.org http://www.marketing91.com http://www.examstutor.com http://www.netmba.com http://analytics-magazine.org

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