Behavioural Segmentation: What is it?

behavioural segmentationHave you ever wondered why some ads seem right on point, pulling you to find more about the product advertised? Well, that is what the marketing chiefs do; they are tasked with studying the market (including you) and structure advertising messages in order to encourage customers to purchase their products.

Marketers instinctively understand that all customers have varying preferences, needs and purchasing power. Not every customer wants home insurance or pet food. Similarly, some customers will buy more of their products, others will buy a few. In other words, not all customers are created equal. It is the goal of the marketer to classify customers with similar traits, a process called market segmentation.

Behavioural segmentation classifies organizations and individuals into categories based on how they act or behave towards products.  One common classification under this category is benefits segmentation, which involves classifying consumers based on the benefits they seek from the products. For example, with a toothpaste, what benefit is important to you? Do you look at the price, its ability to prevent tooth decay, freshen your breath or whiten the teeth?  If you want the product to fight tooth decay and freshen your breath, the marketer will structure the advertising message in such a way that it resonates with your need.

There you have your answer! Now let’s explore behavioural marketing in depth, but before we do, please go through a course on marketing strategy so that you can gain some mastery of the topic beforehand.

Behavioural Segmentation Based on Usage Rates

This method of behavioural segmentation involves classifying the consumers based on the frequency with which they acquire the company’s products. It ranks users under heavy users, light users and non-users. So if you prefer the Budweiser and grabs it every day after work to help you unwind, then you are classified as a heavy user.

This also applies to services; a typical casino studies its patrons carefully, with the so-called “high rollers”, or persons who spend a lot of money per visit, being classified as VIPs. This tag comes with benefits such as a personal “host” whose job is to make the client as comfortable as possible. Companies are interested in heavy or frequent users as they can refer other potential clients to use the product or service.

Similarly, firms are interested in non-users in order to find out how they can easily persuade them to buy the products or service.

Behavioural Segmentation by Loyalty

Marketers can also classify consumers based on the level of their loyalty to the product or service. The classification are high, medium and low. Most companies tend to target customers with “high” loyalty and allocate more marketing resources towards them in order to retain them. The three classifications are also referred to as hardcore loyals, soft core loyals and switchers. Hardcore loyals stick to one brand; while soft core loyals will sometimes buy another brand, and the switchers have no specific brand. Rather, they buy the brand that they come across whenever they need it.

Behavioural Segmentation by Occasion

Consumers buy certain products or services during festivals or certain occasions. Items such as premium dishes, wines or chocolates sell on festivals.  Confectioneries are mostly in demand during a party, such as a birthday party. Such products are best marketed through behavioural segmentation.

Occasion segmentation can be divided into three based on the frequency of the event: Universal occasions, regular personal occasions and rare personal occasion. Kansas City, Missouri-based Hallmark Cards markets its products using this form of behavioural segmentation. It targets consumers in a way such that there is a card for every occasion- whether it is wedding, bereavement, recovery from a sickness or college graduation. This ensures you have the right card to express yourself perfectly.

Behavioural Segmentation by Buyer Readiness Stage

Now, let’s have a look at behavioural segmentation based on buyer readiness. This method looks at the market as having potential buyers of an item or service who are all at various psychological stages of the purchasing cycle. The level of intention to buy is classified from mere awareness of the company’s item or service to the actual intention to buy the product. The purchasing cycle varies from item to item and from service to service.

An example of a buyer-readiness state is classified into: Product Unawareness (ignorance), product awareness, product knowledge, product interest, product desire, and Product Purchase intent. Understanding the various stages can help you decide which promotional materials and medium to use to target the consumers. The marketing can be done through both offline and online mediums-you can learn how to target consumers through online channels through this course.

The buyer readiness stage can also be classified into five stages namely; awareness of the product, knowledge, liking, and conviction and purchase stage. This stages are explained below:

  • Awareness stage: Here the buyer has a minimalist idea about how the product can meet his needs. At this state, it is the role of the marketer to tailor strategies to create full awareness of the product to potential consumers.
  • Knowledge stage: In this stage, the buyer is aware of the product (its name) though is unaware of the offerings of the item or service. As a marketer, it is your role to explain what this product offers
  • Liking Stage: At this stage, the consumer is fully aware of the product and its benefits and starts trying to create a connection with it by comparing it with competing products.
  • Conviction stage: At this stage, the consumer is fully convinced that the product can fully satisfy his need. The marketer must take this opportunity to launch messages that are aimed at fully convincing the consumer that the product is the right one.
  • Purchase: Fully confident that they have made the right decision, consumers will now purchase the product. At this stage, the marketer should outline the steps for buying the item as the marketing efforts have yielded fruit.

Behavioural Segmentation by Benefits Sought

As explored earlier, this approach structures marketing strategy to target buyers based on the benefits that they seek or desire from a product. It is the basic foundation for marketing as it is based on the concept that a product exists to satisfy a certain need or want. This method doesn’t just segregate consumers according to their psychological, demographical or socio-economic classification; it also describes the attributes of the product that pull the consumers to buy the product.

Benefit segmentation is also an effective base on which to structure marketing strategy because it describes why consumers purchase certain goods, or patronise certain service providers or suppliers. If an automaker knows that older buyers prefer comfortable cars equipped with power steering, that automaker can expect such buyers to buy comfortable cars fitted with the power steering.

This model of consumer targeting can be subdivided into two approaches, as you will learn in this marketing course that also encapsulates behavioural segmentation. The first one involves convincing potential users that a particular product is superior by communicating or delivering its cognitive benefits. The second approach involves making the brand more prominent and hence likely to be bought by highlighting its visible benefits.

For example, a no-frills airline can position itself by convincing customers that it has the benefit of very low fares when tickets are bought earlier. It can also state that it has a better safety rating because it has planes that are less than 5 years old and that it observes punctuality.

Conclusion

Behavioural segmentation can help you focus your marketing strategy on consumers based on their behaviour. By understanding the consumers, the marketing efforts will be more effective and efficient. Learn more about marketing and behavioural segmentation and how you can optimize your marketing strategy to net more consumers.