Strategic Marketing Basics

Markets can be segmented according to variables connected to the behaviour and the expectations of potential customers. These variables allow splitting the “market” into more homogeneous sub-groups based on customer expectations or based on their buying / using behaviour.

 

 

Segmentation based on expectations

 

This method of segmentation relies on an understanding of the benefits sought by the various consumer groups.

 

For example, five preference segments can be isolated in the area of toothpaste use: (1) people concerned about their appearance and the whiteness of their teeth (2) people concerned about dental hygiene (3) people sensitive to the taste of the toothpaste (4) people looking for the reassurance offered by a specific brand (5) people seeking the cheapest price. Each segment can have heterogeneous demographic, geographic, socio-economic or psychographic characteristics.

 

Segmentation based on buying and/or consumption behaviours

 

The market can be split into non-users, occasional users, regular users and intensive users. These different groups will exhibit different behaviours in buying and using the product.

 

Examples: telecom markets, air and rail transportation market, food & bevergage, laundry detergent,...

 

Price Sensitivity 

 

Some customers show a predominant sensitivity to price over all other choice criteria either due to a low revenue level, or a lack of emotional involvement towards the product, or for any other reason (psychological attitude,...). Other consumers attach less importance to this variable, and take more into consideration the value of the marketing proposition.

 

Brand loyalty

 

Although loyalty to brands is globally declining, some segments of customers / consumers are still totally loyal to their favorite brands, and this loyallty is the main characteristic of their purchasing and consuming behaviour. Some others are loyal to to several brands and some are not at all loyal and prefer to act as a opportunistic buyers.