Transcript Consumer Behaviour

Segmentation and Planning for
change
Why do we need to segment?
• Because different consumer groups needs
are different
• To maintain focus on the customer target
segment
• To customise advertising according to target
segment
Segmentation
The analytical goal is to measure
Consumer Behaviour and place each
person in a group (segment) that will
minimise the behaviour between each
member of the segment and maximise
the variance between segments
Why do we need to segment?
Because people vary so much from
other people – needs, motivations,
decision processes, buying behaviour
Segmentation is a spectrum
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Concentrated marketing
Differentiated marketing
Mass marketing
Niche marketing
Bases for segmentation
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Geographic
Demographic
Psychographic
Behavioural – benefit, usage situation,
extent of usage
Segmentation Strategy
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Demographic
Usage
Brand Loyalty
Attitudes and benefits
Psychographic or lifestyle
Culture and ethnic subculture
Factors affecting size of segments
• Affluence
• Sophisticated consumer measurement and
databases
• Custom manufacturing
• New forms of distribution
Micromarketing
The result of understanding and
relating to an increasingly fragmented
market place
Criteria for choosing market segments
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Measurability
Accesibility
Substantiality
Congruity
Reaching Target segments
• Controlled coverage
• Customer self-selection
Planning for change
• Unless managements act, the more successful a
company has been in the past, the more likely it is
to fail in the future.
• Because the basic psychological principle is that
people tend to repeat behaviour for which they
have been rewarded
• Successful strategies must fit an environment that
is constantly changing. Frequently the future
arrives before managers are willing to give up the
present.
Consumer Analysis and Social Policy
• Policy issues related to macromarketing and
trends in consumer decisions
• Behavioural/ Psychological economics
economics
Enhanced Shareholder Value (ESV)
The ability of a company to provide
job security and satisfaction, satisfy
customers, grow profits consistently,
adopt sound long-term strategies,
ability to weather business shocks.
3 M’s of profit Growth
• More markets
• More market share
• More margins
Markets have 4 components
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People and their needs
Ability to buy
Willingness to buy
Authority to buy
Customer Buying Career
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Observing
Making requests
Making selections
Making assisted purchases
Making independent purchases
Behavioural consumer
segmentation (Cohort analysis)
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Baby boomers
Baby busters
Skippies
Yuppies
Muppies
Empty nesters
‘Young again’
Ethnocentricity
• Focusing on one’s own way of doing things
with very little sensitivity or interest in the
ways of the world
• Marketing practitioners need cultural
empathy defined as the ability to understand
the inner logic and coherence of other ways
of life.
Porter’s 5 factors that characterise
contemporary markets
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Growing similarity of countries
Fluid global capital markets
Technological restructuring
Integrating role of technology
New global competitors
Finding countries with the largest
populations is not the only challenge
facing companies wanting to expand
profits. The greatest challenge is for
the ‘rich’ countries that hope to have
growing markets for their products is
to assist the ‘poor’ countries in
developing themselves to where they
are also rich enough to be
economically strong markets
Cultural analysis of global markets
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Cultural empathy
‘Think global, act local’
‘Think local, act global’
‘Glocalisation’
Therefore, standardisation is rarely possible.
Communication Problems
• The diversity of markets and consumers
also pose several communication challenges
for marketers
• Therefore visual language, pictures are
mostly used for better universal
understanding. Gestures and words can be
misleading
Language problems
• “ Please leave your values at the desk” –
Paris Hotel
• “ Drop your trousers here for best results” – Bangkok
laundry
• “ Because of the impropriety of entertaining guests of the
opposite sex in the bedroom, it is suggested that the lobby
be used for the purpose” – Zurich hotel
• “ The manager has personally passed all water served
here” – Acapulco restaurant
• “ Ladies are requested not to have children in the bar’ –
Norway bar
Conceptual Equivalency
• “ Come alive with Pepsi”
• “ Come alive out of the grave” – Germany
• “ Pepsi brings your ancestors back from the
grave” - China
Positioning
• What the product stands for?
• Mind-share
Positioning and segmentation strategies
must have fit. A brand must be positioned to
be maximally effective in attracting the
desired target segment.
Positioning strategies
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Product characteristics/benefits
Price-quality approach
Use or application approach
Product class approach
Product user approach
Cultural symbol approach
Competitor approach
Positioning strategies
• Identify competitors
• Determine how competitors are perceived
and evaluated
• Determine the competitors positions
• Analyse the customers
• Select the position
• Monitor the position
Psychographically Understanding the TV User
High Price/ Quality
The prestige-seeker
Philips
Samsung
Sony
The technology-seeker
LG
The reliance-seeker
Conservative
Toshiba
BPL
Videocon
Innovative
Onida
Akai
Sansui
I am very interested in new technology and gadgets
The economy-seeker
Aiwa
Sharp
Low Price/ Quality
Positioning Decision
• Economic analysis should guide the decision
• Segmentation commitment
• Not change for change sake. To stick with the
advertising if it is working.
• Make it easy for customers to remember/recall.
Use symbols, logos, etc. as a memory aid.
• Be honest.