August 22, 2014

Behavioral Segmentation

Behavioral segmentation divides a population based on their behavior, the way the population respond to, use or know of a product. Consumer behavior is a subject studied in depth over time in marketing management. This is mainly because there are several factors which a consumer takes into consideration before taking a decision. Thus consumer decision making is affected by his behavior and that is exactly how the behavioral segments are targeted.

Lets take a simple example of behavioral segmentation. I am writing this article in the month of December which is Christmas time. Christmas is on the 25th  of December. Would you start targeting your segment on the 23rd  or 24th  of December? You will probably start targeting that segment from 1st  December itself. After Christmas we have new year. Thus both of the occasions are such that companies would have to finalize which behavior they want to target. They cannot target both as it leaves only 6 days for the marketing of new year. Example –  Hotels and restaurants will target new year as they will have more customers over the new year which is a moment of outdoor celebration whereas Christmas is more of a family celebration. Several other mass marketing companies strategically target “Christmas and new year”.

Forms of Behavioral segmentation

Buying on occasions –  As mentioned in the above example, buying on occasions is the first form of behavioral segmentation. Products such as chocolates and premium foods will sell on festivals. Similarly, confectioneries will sell when there is a party. Thus these products are generally targeted by behavioral segmentation.

The best example of targeting buying on occasions is Hallmark cards –  greeting cards for all occasions. The primary targeting of hallmark was that be it any occasion, you will find the right kind of card for you. Thus you have the perfect option to express yourself.

Benefits sought –  Several products are targeted towards the benefits sought by the customer. Recently, there has been a war between Colgate and sensodyne to target the people who have sensitive teeth. Similarly, there are other toothpastes which are targeted towards whitening of teeth. Hair shampoos are targeted towards split ends, anti dandruff or others.

The above examples explain what is the role of benefits in behavioral segmentation. Thus a marketer can divide a population based on the benefits they seek within a product.

Loyalty –  There are two ways to grow a business. First is to acquire new customers and second is to retain your existing customers. The more loyal your customer is to you, the more your customer base will increase. That’s one more kind of behavior which marketers target. The strategies for brand loyal customers is very different from that used for acquiring new customers.

The best example of behavioral segmentation by loyalty is observed in the hospitality segment wherein airlines, hotels, restaurants and others give their best to provide the best service possible such that they can retain their customer. The hospitality sector is the one with the best loyalty programs ever. Thus the loyalty of the customer can also be used for behavioral segmentation.

Usage rate – In residential or commercial segment, the usage can be demonstrated in the form of heavy usage, moderate usage or lesser usage. Lets take the example of beauty parlors or personal care. There are some customers who use a lot of personal care products whereas others do not use personal care products much. Thus depending on their usage the customers can be targeted.

Another example of usage rate segmentations can be seen in the electronics as well as the FMCG industry in industrial buying. FMCG and electronics works on the basis of a channel with dealers and distributors. In these segments, the maximum discount goes to the one who buys the maximum whereas others get lesser profits as they also get lesser discounts.

Any product which is not targeted towards the masses generally used behavioral segmentation. It is also an excellent form of segmentation for products which are niche in nature and are targeted towards the wants and demands of customers.

Hitesh Bhasin

Hitesh Bhasin

Admin at Marketing91
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Hitesh Bhasin
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About Hitesh Bhasin

I love writing about marketing and advertising. How did you like the post? Kindly send me you suggestions and post ideas via Feedback or you can also Follow us on Email and get daily marketing updates.

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