Consumer characteristic or personal segment bases measure in terms of geographic, demographic and psycho-graphic features of consumers. These characteristics portray the consumer in terms of “Where they live?” “Who are they?” “How they behave?”
Following is the brief explanation of each such consumer characteristic and its variables:
1. Geographic characteristics:
Historically the first and probably the most obvious basis for segmentation of markets have been geographic characteristics of people. Regional difference in consumer tastes for products as a whole are well-known.
The sellers distinguish carefully among the regions in which they operate and select where they have comparative advantage. Thus, small retailer may distinguish between nearby or surrounding customers and distant customers or far-off one.
A fertilizer dealer may have grouping as-urban and rural. A regional manufacturing company may have segments as in terms of zones say-South-East and West. A national manufacturer might have different sales territories in terms of borough-Divisions- Chelsea & Kensington-Cities and Towns.
Though geographic segmentation helps the marketers to concentrate their efforts to the exact places, organisational, promotional and distributional efforts can be fruitfully utilized. Consumers do not stick to a particular locality or a region. The geographic mobility changes consumer habits thus, cancelling the organisational set-up.
2. Demographic and socio-economic characteristics:
By far the most common approach to market segmentation has been the identification of buyer groups according to a selected demographic and socio-economic characteristic. Demography is the study of human population in terms of its size, density and distribution.
These demographic and social-economic characteristic are-age group,-sex- family size, income, occupation level of education religion, ethnic status, Social class and the like.
For instance, a marketing manager of a carpet manufacturing company might decide the market segmentation on such characteristics such as family income, size of the family and home ownership. Ideally, the manager would like to cross these tabulated variables to have clear twenty four possibilities if he has four income groups, three family sizes and two types of ownerships.
Each family belongs to one of these twenty four segments. After weighing the profit potentiality, the manager can select the best one from his angle to his advantage.
Although demographic and socio-economic segmentation tells the business as to who is the most likely customer to buy the product or a service, it does not disclose about the brand he or she likes.
3. Psycho-graphic characteristics:
Psycho-graphics is a recent approach to market segmentation which has emerged as a major alternative to the traditional approaches. In a fundamental sense, it is not a different approach.
" It has been coined by Professor E. Denby who says that psycho-graphics seeks to describe the human characters of consumers that have bearings on their responses to product’s packaging, advertising and public relations efforts of the unit. Psycho-graphic characteristics include variables like personality attitudes and life- styles. "
Personality is the Individual’s consistent reactions to the world that surrounds him or her. The personality variables are-dominance, aggressiveness, objectivity, achievement, motivation and the like. These influence the buyer behaviour.
The renowned example of this kind is the famous personality study conducted by American automotive industrialist in case of Ford versus Chevrolet cars.
According to the study, Ford cars attracted the personalities with variables like “independent, impulsive, masculine, alert to change and self-confident”.
Chevrolet cars, on the other hand, “conservative, thrifty, prestige conscious, less masculine and seeking to avoid extremes”. This applies to other consumer durable and non-durable items.
Coming to life-style, it stands for the people’s activities, opinions and the sum-total of their interests and values. Thus, the customers can be grouped as Swingers who seek up-to-date goods-they are past posed-hedonistic style; Status Seekers who try to buy goods that will reflect a high status in the society and the Plain Joes who seek ordinary, unfilled goods that do their job.
B. Consumer Response Approach:
Unlike consumer characteristic approach, the consumer response approach believes in why a consumer buys a product than asking as to who is the consumer. Consumer response to the market offerings is much more important which can be made as the bases for segmentation.
These responses are benefit, usage, loyalty and the occasion:
1. Benefit response:
Under this, the consumers are sub- divided into specific groups in relation to the various benefits that the buyer is seeking from a product in particular. These benefits sought differ from product to product.
These benefits are-the aspects of efficiency, prestige, durability, economy or resale value and the like. The following exhibit clears this point in case of tooth pastes in India.
For instance, in case of tooth-paste, the benefits sought may be bright teeth, taste and low price. In case of an automotive the benefits sought may be the fuel efficiency, quality, and status and resale value.
Segmentation based on benefits is usually most practical approach from a marketing stand point of view because of its close connection, product planning and publicity.
Thus, a company can choose the benefit it wants to emphasize, create a product and deliver it by a direct message to the group seeking that benefit or set of benefits.
However, choosing in benefit to emphasize is not an easy task. The firm must be damn sure that the stated benefit or set of benefits that the buyers seek are real ones.
2. Usage response:
The first departure from pure demographic segmentation is usage or volume response as a base for segmentation. Thus, the amount of usage of a particular product has its say among different consumer segments.
Under this approach, the seller distinguishes the users as the Heavy, Medium, Light and Non-user of his product. Then he attempts to determine whether these groups differ in demographic and psycho-graphic factors.
Thus, the classification is into primary groups as Users and Non- users and Potential Users. Actual users are separated as to Heavy and Light Users where an attempt is made to determine the difference that exists between them. Naturally, he concentrates on Heavy User as they consume four to ten times the Light Users.
Non-user group is consisting of two types of people. One, those who generally do not use this product (Non-potential Users) and those who might use (Potential Users). Much caution should be exercised before writing off the people as Non-potential Users because, every rule has an exception. In fact, the seller should give thought to all the volume groups because, they present different opportunities.
Here, Potential Users are those who do not use the product but who are not barred from its use for any functional, cultural or economic reason. Many a times, it may be the ignorance of the product or inertia or even a psychological resistance.
However, these can be removed effectively. Thus, extensive information feed will kill ignorance; inertia will be eased by repetitive ads and psychological resistances by thematic ads.
3. Loyalty responses:
Loyalty response or product-space response is the latest base used for segmentation. It works on the fact that the consumers can differentiate between the products. That is, they create a product preference scale. That is, the buyers are asked to compare the existing brands of product and rate them as they perceive them based on their liking.
Such attempt helps the seller in developing an ideal brand to which a sizeable group of customers is clustering. Later, these consumers can be sub-divided on the demographic or psycho-graphic features.
However, it is really very difficult to pin down correctly the loyalty. That way, every seller has consumers who are most loyal, moderately loyal and fickle-minded. There is no guarantee that the most loyal consumers are the heaviest users. Further, brand loyalty is very hard to measure because, it depends on the availability of competing products.
Again, the reasons for faith in a particular product are too often too personal to take as the basis for effective segmentation.
4. Occasion response:
The earlier noted responses of loyalty, benefit and usage are one that varies according to the immediate situation. For this reason, the shrewd marketers use occasion response to determine which situations produce optimal consumption patterns for a given product. This sense of occasion is of top significance when it comes to the question of designing the marketing-mix.
For instance, inexpensive local broiler chicken for daily dinner is fine but inappropriate for entertaining guests where costly ‘Venky’ chicken works wonders. For daily use most of them use common brand toilet soap cakes but for special occasions specific brands of toilet soap cakes are used.
The experience has proved beyond doubt that it is possible to broaden the occasion response to product and, therefore, its demand. Thus, a traditional breakfast drink can be converted into a refreshing drink for any time of the day. Much depends on marketing creativity.
In conclusion: It can be said that the marketer may proceed to segment his market in many ways. His goal is to delimit and determine the most decisive mode of segmentation. That is, the differences among the buyers that may be the most consequential in choosing among them or marketing to them.
The marketing segment strategy chosen is the key input to marketing most vital decisions. Once, You have has the sound understanding of markets to be approached, intelligent decisions about product, pricing strategy & promotion and place can be made.