CONSUMER BEHAVIOUR, FALL 2011 GROUP MEMBERS ANNIE MOIN AYAZ ALI SHAIKH SAVEREENA SULEMAN TEACHER MISS

ALIA HASAN

MARKET SEGMENTATION

BECAUSE.
Businesses involve much more than selling products/services and advertise it. Complex markets consisting customers/consumers each with different ideas, perceptions, buying behaviors, race, religion, age and income etc Allow marketers of consumer goods and services identify the needs of the market.

Defined segments help the organization in devising marketing strategy, Advertisement, Promotions etc

Customer segmentation process

Develop unique GoTo-Market strategies by segment. Understand the consumer need.

Develop unique value propositions by segment.

Group customers by need groups.

Identify the most attractive segments.

BASIS OF SEGMENTATION
Geographic Segmentation Demographic Segmentation Psychological Segmentation Psychographic Socio-cultural Segmentation Use-Related Segmentation Use Situation Segmentation Benefit Segmentation Hybrid Segmentation

Geographic Segmentation
Its market division by location. People living in the same area share some similar needs and wants. Consumers needs and wants differ on regional basis (Culture, religion, climate etc) consumers in different areas may display certain characteristics and behaviors in that particular region which people in other regions might do not have. Companies selling products/services would like to know, where their products are being sold.

DEMOGRAPHIC SEGMENTATION

Peoples wants and demands vary with respect to different age levels Gender segmentation is commonly used within the cosmetics, clothing and magazine industry.

People with different income levels have different buying behaviors.

IS IT THE RIGHT SEGMENT FOR COLGATE??

PSYCHOLOGICAL SEGMENTATION & PSYCHOGRAPHIC

Marketers divide the total potential market into smaller subgroups on the basis of intrinsic characteristics of the individual, such as personality, lifestyle, attitudes or interests. Psychographic is aimed at describing the accurate profile of required segment.

Here markets are divided on the basis of the psychology and lifestyle habits of customers.
marketing a product requires a deep understanding of the customers psychology, along with their needs, in order for the product to be accepted. Psychographic Segmentation Variables, Interests, Activities, Opinions, Behavioral patterns, Habits, Lifestyle, Perception of selling company, Hobbies

Socio-cultural segmentation

Social Class

Culture:

Culture & Subculture

Cultural tend to share same values, beliefs and customs

Sub culture:
Source: consumer behavior-L.Schiffman & L.kanuk

Subgroup are often united by certain experiences, values or beliefs

Global market segmentation:

Same type of product regardless of which nation they belong. Due to true global market place people living in one country or region used the product manufactured in other country.

RELIGION
Influencing the buying pattern or preference of consumer in purchase decision. Eid, Diwali, Christmas and religious festival occasion.
Source: consumer behavior-L.Schiffman & L.kanuk

FAMILY LIFE CYCLE

A composite variable reflects relative age, income, and employment status. Representing an important target segment E.g.: Bank al Habib, insurance company. Key consumer related roles - information gather, influencer, user, decider, maintainers and disposers. Roles often are influenced by familys lifestyle and cultural factors.

Source: consumer behavior-L.Schiffman & L.kanuk

SOCIAL CLASS:
Combination factors are occupation, income, education, wealth. Three methods of measurement 1. subjective measure-individual selfperception, 2. reputational measure-individual perception for other 3. objective measure use specific socio-economic measure (single variable index or composite variable index). MCB service to B2B, B2C Southwest Air Line, B2B, B2C

Source: consumer behavior-L.Schiffman & L.kanuk

Use-Related segmentation
Source: consumer behavior-L.Schiffman & L.kanuk

Rate of usage segmentation:

Finds out consumer behavior and differentiate among heavy user, medium user, light user and non user of product and services. Tooth brush and mobile package.

Awareness status:
Consumer rate of awareness, level of interest in the product and willingness to buy the product. Nesvita milk

Brand Loyalty
Source: consumer behavior-L.Schiffman & L.kanuk, www.wekipedia..com

Finding the characteristics of brand loyal consumers help marketers to design promotional message Rewarding them with special benefits such as Credit card point, club memberships etc

Use-Situation Segmentation
On the basis of occasion or situation marketers determine what consumers will purchase or consume.
Source: consumer behavior-L.Schiffman & L.kanuk

Benefit Segmentation
Product or service benefits Changing life style directed to benefits Used for positioning of various brand with in the same category.

Source: consumer behavior-L.Schiffman & L.kanuk

Source: consumer behavior-L.Schiffman & L.kanuk, www.googel.com, www.wekipedia.com

Hybrid Segmentation
Combining several segmentation Three hybrid segmentation approaches. Psychographic-Demographic. Geo-Demographic. Value and lifestyle system. In Psychographic-Demographic-used in development of advertisement. Geo-Demographic-people who lives close to one another are likely to have similar economic status, taste ,preferences, lifestyle and consumption habits.

Source: consumer behavior-L.Schiffman & L.kanuk, principle of marketing P. Kottler

Value and life style system

Explains the various attitudes towards society and institutions. Applies psychographics to business management. Away of thinking of consumers beyond demographics. Focuses more explicitly on explaining consumer purchase behavior.

Framework
An individuals primary motivations as well as his resources determines how a person will express himself/herself in the market place. Three primary motivation include : Principle Oriented (Ideal) Status Oriented (Achievement) Action Oriented (Self- expression ) The consumer with in each orientation further classified into those with high level of resources and low level of resources depends on income, education, health, selfconfidence, energy and willingness to buy.

Source: consumer behavior-L.Schiffman & L.kanuk

Finer segmentation
The strategies we use in finer segmentation are: -micro-segmentation -mass-segmentation -verity-seeking strategy. The bases we used in developing finer segments: -customized offering -diverse customer base -close customer relationships.

Strategic Marketing &planning

THE IBM STORY Sluggish sales in 90s Segmented on geographic divisions and productgroups. Segmentation as an active strategy- in 1991

New segments based on customer needs

1. 2. 3. 4. 5.
Insurance Cos. Banks Govt Depts. Retail Industry

Regained profitability in 1994.

32

ACTIONABLE

IDENTIFIABLE

Criteria for Effective segmentation

STABILITY OVER TIME

FAVORABLE COST/ BENEFIT

Identifying segments
Identifying- differentiating the segment Based on consumer needs Example anti wrinkle/aging creams

Actionable/Accessible segments
Actionable- resources to reach the segment/ accessibility Telenor Easy Paisa: Transferring of remittances Bill payment Easy pay- corporate collection from customers

Stability over time

Likely to grow larger over time Rooh Afza in Ramazan Targeting teens- stable like cosmetics

Favorable cost/benefit
Sufficiency- segments size justifying cost and benefit

The best example In Pakistan , Tea- oriented people

French company Global market share of 27% Present in 72 countries Mission: to bring health through food and beverages In 1999, focused on 3 categories Biscuits Water Diary

 1999 and 2003- sold its glass container business 2000- sold beer brand Kronenbourg 1964 2002- sold Italian cheese and meat business

 In 2003 refocused on 4 categories Diary Water Baby nutrition Medical nutrition

 2004- sold Jacobi (European biscuits) business 2005-06- sold its sauces business 2007- sold LU and Prince brand to Kraft for 5.3 billion July 2007- purchased Numico the Dutch baby food and nutrition company for 12.3b creating the worlds 2nd largest manufacturer of baby food

 Segmentation and Innovation New consumer benefit segment: mature category Pioneering a new health segment YOGURT

 For segmentation to be useful, you must be able to act on it

Then you need to coordinate action in the organization. Marketing cant do it alone.

Refrecne:
www.Google.com Wekipedia.com Philip kotler -principle of marketing. Leon G. Shiffman- consumer behavior.