Introduction
Market Segmentation
What is Segmentation?
According to Proctor (2000), segmentation is a market technique which can help firms find ways of establishing a competitive advantage. A market segment is a section of a market which possesses one or more unique features that both give it an identity and set it apart from other segments. Market segmentation amounts to partitioning a market into a number of distinct sections, using criteria which reflect different and distinctive purchasing motives and behaviour of customers. Segmentation makes it easier for firms to produce goods or services that fit closely with what people want (p. 189).
Segmentation Variables
1. Demographic variables are among the most widely used segmentation approaches. Demographic variables are:
- Easier to observe and/or measure than most other characteristics
- Their breakdowns by sex, age, family life cycle, race/ethnic group, education, income, occupation, family size, religion and home ownership are often closely linked to differences in buying behaviour (2006, p. 67).
2. Geographic segments mean location and this can include: streets, towns, cities, regions, continents, and trading blocks (Proctor 2000).
Geographic segmentation is relatively easy to perform because the individual segments can be clearly defined on a map. It is a sensible strategy to perform because the individual segments can be clearly defined on a map. It is a sensible strategy to employ when there are distinct differences in climatic conditions, access to transportation and proximity to round-the clock service or repairs. This strategy is effective if there are geographic considerations such as varying regional tastes or unique culture based habits and behaviors (2006, p. 67).
3. Behavioral variables are behaviour patterns that include usage and benefit (Proctor 2000).
- Usage segmentation is a from of market segmentation which is based on information about volume and frequency of purchase for a given product (Stat 1999, p. 180).
- Benefit segmentation is a form of market segmentation which is based on a knowledge of the benefits that consumers seek from a particular product (Stat 1999, p. 15).
4. Psychographic variables include psychological profiles of people in terms of their life-styles, attitudes and personalities (Proctor 2000).
Psychographic segmentation is a form of market segmentation that tries to analyze the way in which the consumption of particular products and services relates to the rest of the consumer’s life (Stat 1999, p. 135).
Target Market
Marketing Mix
Consumer Needs and Motivation
Maslow suggested that human needs are ordered in a hierarchy of importance. The most important needs are those to do with physiological needs, whereas the least important ones are to do with self actualization. Maslow contended that people would not seek to satisfy the less important needs until the more important ones were satisfied (Proctor 2000).
Maslow’s Hierarchy of Needs
Abraham Maslow suggested that human needs can be divided into five basic categories:
- Physiological – include hunger, thirst and sex
- Safety – range from security and protection
- Social Esteem – cover affection and a sense of belonging; include recognition, status, and self esteem
- Self Actualization – range from self development to self accomplishment
According to Maslow’s hierarchy of needs, after physiological and safety needs have been realized, social needs, esteem needs, and finally self-actualization needs take priority. Self-actualization is our highest need. There is overlap between each level since no need is ever completely satisfied. For this reason, the lowest needs remain as prime motivators that influence consumer behavior (2003, p. 62).
Consumer Personality
Consumer Perception
Consumer perception is an important factor in positioning the product in the consumers’ minds. One of the goals of the marketing mix is to use the consumers’ perception to make a product and service attractive. The aim is to portray an image for the product or service that will match with how one wants the product to be visualized in people’s minds. Image is not only reflected in the promotional messages which are directed towards the market target but also in the pricing strategy, the mode of distribution and, the appearance of the product or service itself.
Consumer Perception of Product or Service Quality
Perception is important in the marketing mix of a product or service. In terms of Product, the “perceived quality” of the product/service affects consumer behaviour. Quality according to Proctor (2000), reflects differences among products or differences among services. Product differences are an important factor in marketing. Perceived quality differences affects how the consumers view a product or a service. Quality is a relative value that people attribute to things. It reflects people’s perceptions concerning a product or service and how well it will provide the various benefits they require from using it.
Consumer Perception and Price
Anything that can impact the perception of the product or service features can impact the price that potential consumers will be willing to pay. If the consumer perceives more than justifies the price, he will not purchase ( 2001, p. 56). The perceived value of the product or service affects the price.
Conclusion
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