Behavioural Segmentation

Behavioural segmentation divides buyers into groups based on their knowledge, attitudes, uses or responses to a product. Many marketers believe that behaviour variables are the best starting point for building market segments.

OCCASIONS. Buyers can be grouped according to occasions when they get the idea to buy, make their purchase or use the purchased item. Occasion segmentation can help firms build up product usage. For example, most people drink orange juice at breakfast, but orange growers have promoted drinking orange juice as a cool and refreshing drink at other times of the day. Mother's Day

Occasion segmentation: Kodak has d&oeioped special versions of its single-use camera for about any picture taking occasion, from underwater photography to taking baby pictures.

and Father's Day are promoted to increase the sale of confectionery, flowers, cards and other gifts. The turkey farmer Bernard Matthews fought the seasonalitv in the turkey market. In some European countries the American bird was as synonymous with Christmas as Santa Glaus, lie had a prohlem. In most families, Christmas dinner was the only meal big enough to justify buying such a big bird. His answer was to repackage the meat as turkey steaks, sausages and burgers, and promote them for year-round use. His reformulated turkey is so successful that he is now reformulating New Zealand lamb.

Kodak uses occasion segmentation in designing and marketing its single-use cameras, consisting of a roll of film with an inexpensive case and lens sold in a single, sealed unit. The customer simply snaps off the roll of pictures and returns ihe film, camera and all, to be processed. By mixing lenses, film speeds and accessories, Kodak has developed special versions of the camera for just about any picture-taking occasion, from underwater photography to taking baby pictures:

Standing on the edge of the Grand Canyon? [Single-use cameras] can take panoramic, wide-angle shots. Snorkelling? Focus on that flounder with -A [different single-use camera). Sports fans are another target: Kodak now markets a telephoto version with ultra fast ... film for the stadium set. ... Planners are looking at a model equipped with a short focal-length lens and fast film requiring less light ... they figure parents would like ... to take snapshots of their babies without the disturbing flash. ... In one Japanese catalogue aimed at young women. Kodak sells a package of five pastel-coloured cameras ,.. including a version with a fish-eye lens to create a rosy, romantic glow,23

Polaroid shows different uses for its instant camera. Originally promoted as capturing happy family events, the product is now shown in other uses — to photograph a damaged car, an antique seen in fi shop or a possible house purchase.

BENEFITS SOUGHT. A powerful form of segmentation is to group buyers according to the different benefits that they seek from the product Benefit

Table 9.3

Benefit segmentation of the toothpaste market benefit segments

DEMOGRAPHICS

behaviour psychographigs

FAVOURED BRANDS

benefit segments behaviour psychographigs

FAVOURED BRANDS

Economy	Men	Heavy users	High autonomy,	Brands on
(low price)			value oriented	sale
Medicinal	Large families	Heavy users	Hypochondriacal,	Crest
(decay prevention)			conservative
("osmetic	Teens,	Smokers	High sociability,	Aqua -Fresh,
(bright teeth)	young adults		active	Ultra Brttc
Taste	Children	Spearmint	High .self-	Colgate,
(good tasting)		lovers	involvement,	Aim
			hedonistic

SOURCES: Adapted from Russeil J. Haley, 'Benefit segments! ion: :i decision-oriented research tool'. Journal of Marketing (July 1.96$), pp. 30-5; see also Haley, 'Benefit segmentation: backwards and forwards'. Journal ofAdvertising Research (February-March 1984), pp. 19-25; and Haley, 'Benefit scgnirritation - 20 years later', Journal of Consumer Marketing, 1 (1984), pp. 5-14.

SOURCES: Adapted from Russeil J. Haley, 'Benefit segments! ion: :i decision-oriented research tool'. Journal of Marketing (July 1.96$), pp. 30-5; see also Haley, 'Benefit segmentation: backwards and forwards'. Journal ofAdvertising Research (February-March 1984), pp. 19-25; and Haley, 'Benefit scgnirritation - 20 years later', Journal of Consumer Marketing, 1 (1984), pp. 5-14.

benefit segmentation Dividing [he market into groups according to the different benefits that consumers seek from ihc product.

segmentation requires finding the main benefits people look for in the product class, the kinds of people who look for each benefit and the major brands that deliver each benefit. One of the best examples of benefit segmentation was for the toothpaste market (see Table 9.3). Research found four benefit segments: economic, medicinal, cosmetic and taste. Each benefit group had special demographic, behavioural and psychographie characteristics. For example, the people seeking to prevent decay tended to have large families, were heavy toothpaste users and were conservative. Each segment also favoured certain brands. Most current brands appeal to one of these segments. For example, Crest tartar control toothpaste stresses protection and appeals to the family segment; Aim looks and tastes good and appeals to children.

Colgate-Palmolive used benefit segmentation to reposition its Irish Spring soap. Research showed three deodorant soap benefit segments: men who prefer lightly scented deodorant soap; women who want a mildly scented, gentle soap; and a mixed, mostly male segment that wanted a strongly scented, refreshing soap. The original Irish Spring did well with the last segment, but Colgate wanted to target the larger middle segment. Thus it reformulated the soap and changed its advertising to give the product more of a family appeal,23

In short, companies can use benefit segmentation to clarify why people should buy their product, define the brand's chief attributes and clarify how it contrasts with competing brands. They can also search for new benefits and launch brands that deliver them.

USER STATUS. Some markets segment into non-users, ex-users, potential users, first-time users and regular users of a product. Potential users and regular users may require different kinds of marketing appeal. For example, one study found that blood donors are low in self-esteem, low risk takers and more highly concerned about their health; non-donors tend to be the opposite on all three

Figure 9.2

Heavy and light users of common consumer inducts dimensions. This suggests that social agencies should use different marketing approaches for keeping current donors and attracting new ones.

A company's market position will also influence its focus. Market share leaders will aim to attract potential users, whereas smaller firms will focus on attracting current users away from the market leader. Golden Wonder concentrated on regular users to give it a dominant market share with its Pot Noodle and Pot Rice, It was first on the market with its dehydrated snack meals in pots, but new entrants took sales from it. It gained 80 per cent market share by making its brand more appealing to existing users. Kcllogg's took a different approach with its Bran Flakes breakfast cereal. Rather than keeping to the original health conscious users, it aimed at non-users by promoting the superior flavour of the product.24

USAGE RATE. Some markets also segment into light, medium and heavy-user groups. Heavy users are often a small percentage of the market, but account for a high percentage of total buying. Figure 9.2 shows usage rates t'or some popular consumer products. Product users were divided into two halves, a light-user and a heavy-user half, according to their buying rates for the specific products. Using hcer as an example, the figure shows that 41 per cent of the households studied buy heer. However, the heavy users accounted for 87 per cent of the beer consumed - almost seven times as much as the light users. Clearly, a beer company would prefer to attract one heavy user to its brand rather than several light users.

Airlines' frequent flyer programmes are aimed at heavy users who, because they are business travellers, also buy expensive tickets. British Airways Executive Club blue card members get free AirMiles each time they travel and other priority benefits when booking and checking in. As usage mounts, Club members are

Chapter 9 Market Segmeritaaon and Targeting buyer-readiness stages The stages that consumers normally pass through on their way Co purchase, including awareness, knowledge, liking, preference, conviction and purchase.

upgraded to silver and gold cards, each giving extra benefits and services. Almost all airlines offer similar incentives, but since benefits mount with usage, it pays the frequent flyer to be loyal. Some operators share their schemes to provide wider benefits to the regular traveller. American Express's Membership Miles scheme integrates Air France's Frequence Plus, Austrian Swissair's Qualtflyer, Virgin's Freeway and Continental Airline's OnePass together with a string of hotel chains and car rental firms. Continental's scheme is already bundled with others, so with it comes Air Canada, BWIA International Airways, Malaysian Airlines and Cathay Pacific.

LOYALTY STATUS. Many firms are now trying to segment their markets by loyalty, and are using loyalty schemes to do it. They assume that some consumers are completely loyal - they buy one brand all the time. Others are somewhat loyal -they are loyal to two or three brands of a given product, or favour one brand while sometimes buying others. Still other buyers show no loyalty to any brand. They either want something different each time they buy or always buy a brand on sale. In most cases, marketers split buyers into groups according to their loyalty to their product or service, then focus on the profitable loyal customers.

Loyalty schemes go beyond the continuity programmes, like Esso Tiger Cards, that have been used for decades. They seek to build a relationship between the buyer and the brand. In Australia members of Unilever's Omomatic Club - for people with front-loading washing machines - get newsletters, brochures, samples and gift catalogues. 'Front loaders' are rare in Australia, so die club keeps Unilever in touch with a micromarket that its Omomatic detergent is made for. Nestl6's Casa Buitoni Club is for people interested in an Italian lifestyle and cooking. The pasta market is fragmented and penetrated by retailers' own brands, so the eluh aims to build loyalty and Buitoni's brand heritage of focusing on enthusiasts. The Swatch's Club was formed after Swatch studied the market for cult objects. Members are helped to build up their Swatch collection and offered special editions.

The effectiveness of loyalty schemes and segmentation by loyalty is limited by how people buy. Loyal customers are few and very hard to find in most markets. Most customers are promiscuous and polygamous in their relationship with brands. Those with favoured brands will promiscuously try alternatives occasionally, and most customers choose from a repertoire of favourites. Bur even the polygamous brand users change their repertoires and make opportunistic purchases. There is also a limit to the attention customers devote to some brands, plus the low cost of switching from one brand to another. In many markets, attempts to build brand loyalty will, like most sales promotions, last only as long as the campaign. There is also a danger of loyalty being displaced from the brand to the loyalty scheme - the air miles acquired becoming more important than the airline flown.2s

BUYER-READINESS STAGE. A market consists of people in different buyer-readiness stages of readiness to buy a product. Some people are unaware of the product; some are aware; some arc informed; some are interested; some want the product; and some intend to buy. The relative numbers at each stage make a big difference in designing the marketing programme. Gar dealers use their databases to increase customer care and to estimate when customers are ready to buy. Guarantees lock customers into having the first few services from a dealer, bul after that, the dealer can estimate when services are needed. Close to the due date the customer is sent a reminder or rung to arrange for a service. Some time later I the dealer can estimate that the customer is getting ready to buy a new car and can then send out details of new models or deals. Indiscriminate mailing that does I not take into account the buyer-readiness stage can damage relationships. By sending unwanted brochures the dealer becomes a source of junk mail. Even worse, recent customers' satisfaction reduces if they are told about a better deal or replacement model soon after their purchase.

ATTITUDE TOWARDS PRODUCT- People in a market can be enthusiastic, positive, indifferent, negative or hostile about a product. Door-to-door workers in a political campaign use a given voter's attitude to determine how much time to spend with that voter. They thank enthusiastic voters and remind them to vote; they spend little or no time trying to change the attitudes of negative and hostile voters. They reinforce those who are positive and try to win the votes of those who are indifferent. In such marketing situations, attitudes can be effective segmentation variables.

The world charity Oxfam needs to keep donations up and costs down. Segmentation helps it do this. It values all donors, but treat segments differently. A lot of its income is from, committed givers who donate regularly, but want low involvement with the charity. They get Oxfam News, special appeals and gift catalogues. Oxfam Project Partners want and get much more contact with Oxfam, These are further segmented by their choice of project, on which they get regular feedback. Through this scheme, Oxfam, like Action Aid, develops a relationship between the giver and the final recipient. Leading donors receive special customer care and information about how their money was spent. Many donors can give little time to Oxfam, but other groups enjoy working in the charity's shops or are enthusiastic lottery ticket vendors.211

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