Question

4. Give some examples for each method of behavioral segmentation. Describe one example of a company that illustrates each type of differentiation. List the names of your favorite brands and compare the price and quality of these products to a comparable brand.

Answer 1

Behavioral segmentation: This kind of segmenting customers is based on the fact that each customer behaves differently or responds in a certain way when he makes a purchase decision for a product or a service. Those behavioural traits are captured by companies to cater specifically to the target audience with predefined behaviour.

Following are the Behavioral segmentation methods:

1. Brand Loyalty Based Segmentation: As the name suggests, the segmentation is based on how loyal the customer is for a particular brand that delivers a product or service. With respect to brand loyalty, the customer can be a switcher (One who switches easily between brands), Loyal to other brands or Loyal to our brand.

So, it becomes imperative to cash in on loyal customer and be wary of switchers.

Industries that serve in service domain like Airline, hospitality, hotels have good Brand loyalty based segmentation. Airlines like AirAsia, FlyEmirates attract their loyal customers by giving premium check-in and allied services at affordable costs.

2. Usage Based Segmetation: The customers can be segmented on the basis of usage of the product : As to whether they are a Light User, Regular user or a Heavy user. Based on quantity demanded, Multiple Stock keeping units (SKUs) can be manufactured to attract each customer segment.

For Example, In FMCG Personal Care industry, Shampoos come in varied sizes right from small sachets to bigger bottles for heavy usage. Customers or trade partners tend to get quantity discounts if they do bulk purchase.

3. Benefits sought - based segmentation:

For each product sought, each customer may have varied needs or wants. Thus, based on the benefits that are sought, the companies can optimize their marketing activities for each segments.

For example, Looking at Toothpaste, Colgate has toothpastes that are only for tooth whitening purpose. It also has Toothpaste exclusive for Sensitive tooth. Thereby, each benefit sought can be made into a product and sold at a premium price.

4. Buyer Readiness based segmentation:

This type of segmentation analyzes the position of the customer with respect to the product offering, that is, whether they are unaware or aware, tried or never tried, etc.,

Suppose there is an electric vehicle company, there may be customers who are completely unware or unheard of electric vehicles. Some might have tried it, some are aware but never tried. Company has to tailor make their marketing program to suit each of the brand personas.

Favorite Brands:

Preferred Brand	Industry	Price	Quality Rating (On a scale of 10)	Competing Brand	Price of Competing Brand	Quality Rating (On a scale of 10)
Adidas Shoes (Ultraboost)	Shoe	$180	9	Nike Shoes (Air Max)	$190	8
iPad Mini	Electronics	$330	8	Kindle Fire HD	9	$300

The quality ratings are given based on the perception of quality from users of the above brands marked on a scale of 10, with 10 being the highest quality.