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Difference between
consumers
L5
Ing. Jiří Šnajdar
2013
Difference between consumers
People behaviour and consumer behaviour effect
some influences. Their penetration and final
repercussion in particular purchase decision is
unique – individual.
However : some are in their purchase behaviour in
some spheres more similar then others. This
similarity is very sought and used value in firm
marketing. It enables at the same time also higher
satisfaction of need of some group of consumers.
The task of market segmentation, one of resources
of decision about marketing strategy, is to discover
segments, how to recognise in which segments
belong which customers and what is specific for
segments.
Market segmentation (in the meaning state) can
businessman use :
• Intuitively,
• on base of experience,
• systematically and purposely.
The same is valid for market segmentation in
meaning of segment uncovering. It is possible to
progress on base of intuition, experience,
experiments or to analyse consistently potential
segmentation positions on base of most objective
information.
Segmentation of consumable market (in the
meaning process) is searching for such groups of
consumers on given market, which fulfil two basic
conditions :
consumers inside segment are most similar with
their market presentation on given market – it is a
condition of homogenous segments, market
presentation of different segments on given market
are mutually most different - it is a condition of
heterogeneous segments.
Homogenous segments secure inside segment
bigger probability of similar reaction on marketing
impulse, shaped by appropriate way.
Heterogeneous segments mean, that
segmentation has marketing importance, sense, that
different groups, segments are different to each
other in relation to given category of product, that
they will react differently.
Exist other practical conditions to use strategy
based on segmentation :
• segments are enough big,
• segments are accessible by media and marketing
tools,
• segments are adequately fixed, in time stabile,
• segments are measured in other necessary
positions.
The way to uncover segments in the form which is
usable for decision about market orientation,
composes from four phases :
delimination of given market, covering of important
criterions, usage of important criterions (own
uncovering of segments), development of segment
profile.
5.1. Dimensions of investigated market
It is a characteristic of market space, where we want
to uncover market segments.
5.2. Segmentation variables
Those criterions are chosen, which lead to the best
fulfil of homogenous and heterogeneous conditions.
Following overview shows complex of criterions
(also signed as segmentation variables), which
enforce markedly at market segmentation.
Descriptive criterions – based on characteristics
Traditional segmentation variables
demographic segmentation
• age
• sex
• family size
• family life cycle (household)
• education
• profession(also called social economic criterions)
• income
Participation of age cohorts as segments is
sometimes marked as generation marketing.
ethnographic segmentation comes out from
connection of ethnographic characteristics on
different consumer behaviour. In view of variables it
is :
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nationality,
race,
religion,
ethnic group,
subculture.
Participation of last mentioned criterion already
overlaps into psychological segmentation.
physiographic segmentation is connected with
that our physiographic situation predetermines often
form of necessities :
• physiographic, physiological dispositions
• health condition
Although physiographic segmentation is not
mentioned very often in literature as specific group
of segmentation criterions, has large sphere of
influence from toothpaste to healthy food, sport
shoes, clothes, …
geographical segmentation comes out of that
changes, differences in consumer behaviour are
conditional on geographical characteristics. The use
mainly variables, as :
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world territory,
countries,
regions,
town extent,
town segmentation,
density of settlement (town, suburb, country)
landscape morphology,
climate.
It is spoken about geo-demographics.
Non-traditional psychographic segmentation
Differences in purchase behaviour are connected
with social and psychological influences.
Consumers with the same “traditional”
characteristics behave on market different.
Criterions :
Social class : different social classes represent
different segments.
Warner stratification schema of social classes
Social classes:
Upper Uppers, Upper classes, Lower Uppers, Upper
Middlers, Middle classes, Lower Middlers, Upper
Lowers, Lower classes, Lower Lowers
As the base are gates of following variable :
education of the head of household
position at work of the head of household
highest finished education of the head of
household.
Lifestyle : uncovered different lifestyles can
represent relevant market segments.
Complex approach represents research of lifestyle
repeated every two years by AISA agency : (11
lifestyles)
protagonists of old orders, authoritative head of
family, modest grandmother, family from
prefabricated block, buck passers, ageless, hustlers,
good family, emancipated modern woman,
manager, young people
Value orientation – research of lifestyle (value
structure : 150 statements)
• intellectual (birds-eye-view)
• manager (business spirit)
• senior (prudent)
• mother (family type)
At integrating of lifestyle into role of market
segments it is necessary to take into consideration
extent of its homogeneity from view of marketing
against given product category. There is a reserve
against lifestyles – they are too abstractive.
Personality : is understood in marketing maybe to
simply as relatively constant reaction of person on
the surroundings.
At segmentation are different approaches, based
on research of different attributes of personality
(dominant, submissive, … - impulsive, rational, …melancholic, flegmatic …) and joins to typology.
It is not commended to use personality as only one
segment criterion. Then segments have not
adequate homogenity.
Profile of segment “ influential young”
Geography : map with signed areas of high, better
than average, average and subnormal occurrence.
Example U.S.
Basic demography : - yupee of suburban inner
circles
- mainly white, singles and
couples without children
- high school education
- white collars
Politics : - dominated ideology : moderate
voting in presidential votes 84 : Reagan (61%)
key problems : fiscal conservatism, nuclear
weapons
Segmentation criterions of market exposures
Segmentation according to behaviour – specific
market situations - has two main positions :
• criterions based on reasons (question why)
• criterions based on description (question how)
Criterions type “WHY” based on reasons (also
segmentation according to use)
• segmentation according to expecting value –
expected benefit (benefit segmentation) : what
consumer expect from product category, what
benefits. Basic phases of scale : price – quality –
social effect . According to concrete situation is
especially quality followed more in detail. Here
belong also purposes of use (consumer
motivation) and parameters of decision about
purchase.
• segmentation according to perceived value :
based on how the customers differences in
perceiving of certain products, marks
• segmentation according to opportunity (time,
social, fashion relations, context of possible use
of product)
• segmentation according to attitudes –
segmentation according to marks preferences
and according to ideal product.
Criterions type “HOW” based on describing of
use, on view site of consumer behaviour
Users status (users – non users, past users,
potential users)
Rate of use (frequency, volume) : strong,
average, subnormal users.
• Loyalty : as incline to purchase and use the
same mark is for needs of segmentation follow
as in position :
* frequency – always the same mark, so
* unit – share of purchase of a mark and use of
category,
• Rates of diffusion process (intake of new
products) : according to placing in scope of
diffusion graph it is possible to differentiate
segments of innovators, early accepting, fast
majority, slow minority, latecomers).
• Knowledge of products, marks. How the
consumers differentiate in knowledge of marks
(as on general level, so in given product
category).
Criterions of reaction on marketing tools
Criterions of reaction on marketing tools belong to
one of most important spheres of criterions,
cultivating segments profiles.
Example of segmentation according to reaction on
tools of purchase support are segments, which
discovered in 1997 in Great Britain agency AC
Nielsen : Lapsed to support, Searching for low
prices, Impassive, Pillars of marks and EDLP (Easy
distribution Low Prices).
Criterions of reactions on marketing tools belong to
one of most important sphere of criterions,
cultivating profile of segments
Definition of important criterions
The base of uncovering of market segments is to
affect bindings between followed criterions. In
marketing perspective are the decisive measure of
differences between consumers – define
criterions.
To define criterions we search the most appropriate
explanatory variables – describing criterions.
Describing criterions explain or associate
movements of define criterions. Customer goes for
lunch to exclusive restaurant, because he belongs
to upper lower class, young family equips
household with things of long term consumption.
So first we decide : which define criterions we will
examine, which we will integrate in own
segmentation research. Further what we use as
criterions uncovering segments. Then we try to find
out, which describing criterions have the strongest
binding on define criterions. By gradual selection we
come to important criterions. Also are followed
bindings between criterions mutually defining.
Methodically are used in simple situations cross
relations, tables, corresponding association
rates, group indexes, affinities. From more
complicated methods of multidimensional
statistics is used factor analysis “R” type.
Uncovering of market segments
Segmentation A priory : in advance we choose
one of criterions, which determines membership to
segment. Can arise two situations :
1. We know in advance how many segments we
obtain – at use of one basic define criterion with
fixed and final scale (strong – average –
subnormal users = 3 segments) or mutual
eliminating situation (variants).
2. A priori choice of one define criterion, which is
multidimensional, does not lead immediately to,
what in the number of segments.
Segmentation Post hoc: Number of segments is
not given in advance. At uncovering of segment are
followed connections between important criterions,
examining their combinations and consequential is
chose those, which provide such elements, which
suit the conditions of homogeneity and
heterogeneousness best.
At a priory and post hoc segmentation we can
use mentioned “ forward segmentation” or
“backward segmentation”.
• When for uncovering of segments are used
criterions of behaviour towards product, this
process is sometimes called “forward
segmentation”.
• Sometimes it is possible to proceed from effort to
use difference in described variables, which
attend to differentiation of possible market
segments. But always follows verification if
hypothesis about impact of describing criterions
on different consumer orientations on given
market were confirmed. Such approach is
characterised as backward segmentation.
Problem can be lower homogeneity of segments in
relation to product.
Appropriate cross tables and analysis of obtained
data – tree disintegration
gradually defined profiles of segments according to
investigated criterions to homogeneity and
heterogeneousness. From multidimensional statistic
is used cluster analysis (is followed similarity of
consumers at current view of all important criterions).
Picture of market segments
In this phase we renew view of segments with
other useful information considering :
• further show of consumer behaviour of segments
(example following media),
• needs of choice between segments (size of
segments and development, …)
Usage of discrimination analysis if we chose process
a priory segmentation ore cluster
analysis.
Steps of process of consumer segmentation
- Delimitation of given market (geographical
dimension and product category)
Exploration of famous criterions :
exploration phases
groups interview
secondary information (statistic of families accounts,
data mining of agency data etc.)
interview of professionals
primary solutions :
interview (decision about content and form of
questionnaire in connection with way of analysis,
kind of selection and selected units,…)
• analysis
- verifications of criterions (cross tables, analysis of
diffusion, factor analysis and other multiply
statistic methods)
- Uncovering of segments (cross tables, cluster
analysis, factor analysis of Q type and other
multiply statistic methods)
- Expansion of segment profiles (backwards cross
tables against new variable in segment,
discrimination analysis)
Interpretation of results and evaluation results of
segmentation :
• By interpretation to take into consideration
conditions of successful segmentation :
- corresponding homogeneity and
heterogeneousness of segmentation,
- measurement of segments,
- importance of segments,
- dynamic of segments, stability
- objectivity
• Segmentation maps
- difference evaluating criterions,
- contractor's expanse
Stated ways of segmentations are called inductive –
searching for variables to segments designation.
Problem solution from other side – deduction.
According to firm behaviour on given market. Then
we follow :
• what product mix offers the firm,
• in which price levels,
• what distribution ways (what kind of shops their
articles are sold),
• what media they use,
• what kind of communication reports.
For two last levels are useful content analysis.
Is obvious selected orientation of firm on given
market in meaning of purpose marketing ? If yes,
then :
• What segmentation variables they use ?
• What segments of consumers try to accost other
relevant companies ?
• What are their characteristics ?
• Is used segmentation of market comprehensive ?
• Are used ways of segmentation of market most
effective, most accurate ?
If no, then should follow own effort to uncover the
most appropriate criterions and segments –
transition to inductive way of market
segmentation.