Upload
angeline-peach
View
220
Download
0
Tags:
Embed Size (px)
Citation preview
2
Emerging Trends in Consumer Behavior
Metrosexual – Straight urban manwho enjoys shoppingand using groomingproducts
3
Outline
• The purpose of segmentation
• Levels of segmentation
• Categories of segmentation variables
• Segmentation process and criteria
• Cost considerations
4
Why Segmentation?
• Properties of ”mass markets” makes it hard to earn above-average rent on merely selling products to customers
• This is due to the unfortunate economic postulate that prices in the long run tend to equal marginal costs of production in perfect markets; that is…
– Homogeneous products – Perfect information symmetry– Perfect competition – No “friction” or switching costs
• It is therefore paramount to – Clearly identify your segment – where the customer that are willing to pay a disproportional
high price in sufficient volumes– Differentiate your product to offer superior value to your key segments– Monopolize your key segments through
• Shade information• Create favorable customer preferences• Loyalty
5
Levels of Segmentation
• Mass marketing– Volumes to the masses!
• Segment marketing– Group of customers that share a similar set of needs and wants
• Niche marketing– Group of customers that share the same distinctive mix of benefits
• Local marketing– Tailored to meet the needs and wants of a local customer group
6
Levels of Segmentation- Mass Marketing
• No customization or market adoption
• Cost oriented
• Volumes to the masses!
• Are there any examples of this in the modern Norwegian economy?
9
Levels of Segmentation- Niche Marketing
• Targeting a narrowly defined customer group seeking a distinctive mix of benefits
• Often identified by sub-segments
10
Levels of Segmentation- Local Marketing
• Tailored to meet the needs and wants of a local customer group
• Endeavors to get as close and personally relevant to individual customers as possible
• An increasing trend in terms of “glocalization” and “customerization”
11
Segmentation of Consumers
GeographicGeographic
DemographicDemographic
PsychographicPsychographic
BehavioralBehavioral
12
Geographic Segmentation
• Dividing the market into multiple geographical units– Nations , states, regions, counties, cities or neighborhoods
• Firms may operate in only one, a few or all, but adopts local variations
• Many areas may have similarities and knowledge of such are valuable– Are there any similarities in the localization of new consumer concepts
such as Lidl?
13
Demographic Segmentation
• Age and life-cycle stage– People’s needs and preferences change with age and life-cycle stage
– Defining the persons major concern
• Gender– No, in terms of consumer behavior we are not equal…
• Income– Goes without saying. Think of Maslow’s hierarchy…
• Generation– Generations share experiences, and to some extent outlooks and values
• Social class– A reference to Maslow again…
15
Behavioral Segmentation• Decision Roles
– Initiator, Influencer, Decider, Buyer, User
• Behavioral Variables– Occasions
– Benefits or value orientation
– User status• Nonusers, ex-users, potential users, first-time users and regular users
– Usage rate
– Buyer – readiness stage
– Loyalty status• Hard-core loyals, split loyals, shifting loyals, and switchers
– Attitude• Enthusiastics, positive, indifferent, negative, and hostile
17
Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-Mix
Strategy
18
Effective Segmentation Criteria
• Measurable– Can you measure your key variables?
• Substantial– Is it large and profitable enough?
• Accessible– Can they be effectively reached and served?
• Differentiable– Are they conceptually different from other groups and do they respond
differently to marketing actions?
• Actionable– Can you design an effective targeting program for attracting attention,
communicating and serving the target segment
22
Cost Considerations
• Segmentation and targeting most likely increase sales, but also inflict costs in terms of – Product modification costs
– Manufacturing costs
– Administrative costs
– Inventory costs
– Promotion costs
• It is often nicer to think of increase of revenues per new customer, but a top manager would worry about new customer costs inflicted over the whole value chain
24
Summary and Continuation
• Summary– We have established an argument of why segmentation is a valuable tool
in terms of increasing profitability
– We have identified categories of segmentation variables
– We have also presented some features of good segmentation variables and a feasible way of conducting market segmentation
– Finally, we have touched upon the concept of targeting through the process of selecting market segments
• Continuation– Positioning and competition