Behavioural segmentation is possibly the most useful way to segment the market as it is based on consumers' knowledge of, attitude towards, uses for, and response to a product (Kotler et al. 2003). In particular, markets can be effectively segmented on the basis of benefits sought (benefit segmentation).  After all, marketing is about finding out what people need and want and then developing a product that satisfies those needs. 

Behavioural bases for segmentation include:

• purchase occasion;

• benefits sought;

• user status and usage rate;

• loyalty status;

• buyer readiness stage; and

• attitude toward the product.

Purchase occasion

Markets can be segmented on the basis of when and why people buy.  For example, consider the purchase of wine.  People may purchase wine for a range of reasons and those reasons will influence what they buy (variety, brand, price), where they buy (outlet), and when they buy (regular, special event).  For example, you might purchase a bottle of wine for an evening meal at home, for a dinner party, to take to a BYO restaurant, for cooking, for cellaring, or for a gift.  No doubt you would buy a different type and quality of wine for each occasion or purpose. 

Likewise when dining out, your choice of restaurant would vary depending upon the reason, whether it be to entertain your boss, a family get together, a wedding reception, a romantic dinner for two or just a quick lunch with a friend. 

If a product is typically used for a particular occasion, the marketing firm might like to extend use by encouraging the market to think of using the product on other occasions.  For example, if the market typically thinks of eating a particular product as a treat, then the firm might advertise the product in a way that suggests that people should reward themselves more often.  Advertising lines, such as 'Dangerous Liaisons', 'Pure Temptation' and the like may encourage people to consume these 'treats' on a more regular basis.

Benefits sought

Summers et al. (2009, p. 142) define benefit segmentation as 'the process of grouping customers into market segments according to the benefits they seek from the product'. Marketing is about finding out what people need and want and then developing a product offering (product, price, placement, promotion) that satisfies those needs and wants.  Therefore, segmenting a market on the benefits that people are seeking from the product makes a lot of sense.  Consider the market for cars.  What are the main benefits that people are seeking from owning a car?  For some, economy is the key issue, whereas for others safety, power, comfort, or status may be more important benefits.

Activity 7

Consider the market for Bambi woollen under-blankets. 

What are the main benefits that people may be seeking from purchasing a woollen under-blanket? 

Can you identify some discrete market segments for this product based on benefits sought?

Feedback on Activity 7

Usage rate and user status

Summers et al. (2009, p. 142) define usage-rate segmentation as 'dividing a market by the amount of product bought or consumed'.  Usage rate can be light, medium, or heavy.  User status for a product can range from regular user, first-time user, potential user, ex-user, to non-user.  Obviously marketers focus much of their attention on heavy and regular users, but they are also interested in attracting non-users.  Consider the marketing of beer.  The focus of advertising for full strength beer is on heavy drinkers, but newer products such as light beers and premium beers are targeted at non-traditional markets, such as younger people and females. 

Activity 8

Visit the Fosters brewing company.  Click on 'brands' and then 'beer'.  Which brands of beer do you think are targeted at heavy, moderate, light, and potential users?

Loyalty status

When assessing loyalty, consumers can be classified as completely loyal, somewhat loyal, or not loyal.  Completely loyal consumers are those that would not consider buying another brand or visiting a different outlet.  I tend to be more loyal for service products, such as my hairdresser and my doctor, while I tend to be a brand switcher when it comes to most food products.  Some consumers may be loyal to more than one brand.  For example, I like both Arnotts and Nabisco  biscuits and tend to buy whatever is on special for those two brands.  Other consumers may show no brand loyalty at all and may simply buy whatever brands are on special. 

Buyer-readiness stage

Buyer readiness stages range from being unaware that the product or service exists to actual purchase.  Refer to figure 12.3 (p.416) of Kotler et al. 2003.  The six buyer readiness stages are:

Activity 9

What is your buyer readiness stage with respect to LCD Home Theatre TVs?  Are you a user or a potential user?  How could the marketing firm get you to progress to the next stage?

Attitude

Summers et al. (2009, p. 97) define an attitude as a 'learned tendency to respond consistently towards a given object'. For example, people's attitude toward the product can range from 'enthusiastic, positive, indifferent, negative to hostile' (Kotler et al. 2003, p. 225).  Frankly, it is a waste of time trying to convince people with a negative attitude toward the product to buy it.  For example, no amount of advertising is going to persuade me (a converted smoker) to purchase cigarettes.  However, indifferent people could be persuaded to buy, and people with a positive attitude toward the both the product category and your brand are a very attractive target market.  

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