Sellers can choose to pursue consumer markets, business-to-business (B2B)
markets, or both. Consequently, one obvious way to begin the segmentation process
is to segment markets into these two types of groups.
Different factors influence consumers to buy certain things. Many of the same
factors can also be used to segment customers. A firm will often use multiple
segmentation bases5, or criteria to classify buyers, to get a fuller picture of its
customers and create real value for them. Each variable adds a layer of information.
Think of it as being similar to the way in which your professor builds up
information on a PowerPoint slide to the point at which you are able to understand
the material being presented.
There are all kinds of characteristics you can use to slice and dice a market. “Bigand-
tall” stores cater to the segment of population that’s larger sized. What about
people with wide or narrow feet, or people with medical conditions, or certain
hobbies? Next, we look primarily at the ways in which consumer markets can be
segmented. Later in the chapter, we’ll look at the ways in which B2B markets can be
segmented.
Types of Segmentation Bases
Notice that the characteristics
fall into one of four segmentation categories: behavioral, demographic, geographic, or
psychographic. We’ll discuss each of these categories in a moment. For now, you can
get a rough idea of what the categories consist of by looking at them in terms of
how marketing professionals might answer the following questions:
•Behavioral segmentation. What benefits do customers want, and how do they use our product?
• Demographic segmentation. How do the ages, races, and ethnic
backgrounds of our customers affect what they buy?
• Geographic segmentation. Where are our customers located, and how
can we reach them? What products do they buy based on their
locations?
• Psychographic segmentation. What do our customers think about
and value? How do they live their lives?
Behavioral segmentation divides people and organization into groups according
to how they behave with or act toward products. Benefits segmentation—segmenting
buyers by the benefits they want from products—is very common. Take toothpaste,
for example. Which benefit is most important to you when you buy a toothpaste:
The toothpaste’s price, ability to whiten your teeth, fight tooth decay, freshen your
breath, or something else? Perhaps it’s a combination of two or more benefits. If
marketing professionals know what those benefits are, they can then tailor
different toothpaste offerings to you (and other people like you). For example,
Colgate 2-in-1 Toothpaste & Mouthwash, Whitening Icy Blast is aimed at people
who want the benefits of both fresher breath and whiter teeth.
Another way in which businesses segment buyers is by their usage rates—that is,
how often, if ever, they use certain products. Harrah’s, an entertainment and
gaming company, gathers information about the people who gamble at its casinos.
High rollers, or people who spend a lot of money, are considered “VIPs.” VIPs get
special treatment, including a personal “host” who looks after their needs during
their casino visits. Companies are interested in frequent users because they want to
reach other people like them. They are also keenly interested in nonusers and how
they can be persuaded to use products.
The way in which people use products is also be a basis for segmentation. Avon Skin
So Soft was originally a beauty product, but after Avon discovered that some people
were using it as a mosquito repellant, the company began marketing it for that
purpose. Eventually, Avon created a separate product called Skin So Soft Bug Guard,
which competes with repellents like Off! Similarly, Glad, the company that makes
plastic wrap and bags, found out customers were using its Press’n Seal wrap in ways
the company could never have imagined. The personnel in Glad’s marketing
department subsequently launched a Web site called 1000uses.com that contains
both the company’s and consumers’ use tips. Some of the ways in which people use
the product are pretty unusual, as evidenced by the following comment posted on
the site: “I have a hedgehog who likes to run on his wheel a lot. After quite a while
of cleaning a gross wheel every morning, I got the tip to use ‘Press’n Seal wrap’ on his wheel, making clean up much easier! My hedgie can run all he wants, and I don’t
have to think about the cleanup. Now we’re both GLAD!”
Although we doubt Glad will ever go to great lengths to
segment the Press ’n Seal market by hedgehog owners,
the firm has certainly gathered a lot of good consumer
insight about the product and publicity from its
1000uses.com Web site. (Incidentally, one rainy day, the
author of this chapter made “rain boots” out of Press ’n
Seal for her dog. But when she later tried to tear them
off of the dog’s paws, he bit her. She is now thinking of
trading him in for a hedgehog.)
very good
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