Consumer Behaviour and Segmentation Essay Example | Topics and Well Written Essays - 2750 words

Consumer Behaviour and Segmentation - Essay Example The researcher states that the goal of market segmentation is to identify distinct consumer groups that have homogeneous needs. Tailoring the marketing mix for particular segments leads to better planning and more effective use of marketing resources. Coles and Culley, for example, illustrate how DuPont segmented its market for Kevlar, an aramid fiber that is lighter yet stronger than steel. The company focused the unique needs of consumers in three different segments. Potential fishing boat owners: Kevlar's lightness promised fuel savings, increased speed, and the ability to carry more fish weight. Aircraft designers: Kevlar has a high strength-to-weight ratio. Industrial plant managers: Kevlar could replace the asbestos used for packing pumps. The market segmentation design, based on product benefits, is widely recognized as the state of the art and superior to traditional segmentation schemes based on industry type or consumer size, sustaining a segmentation strategy based on benefits alone is often difficult for the product market. Eventually, in a competitive market, competitors are able to offer equivalent products and the abnormal profits start to deteriorate. This situation is especially prevalent for industrial raw materials and supplies that are difficult to differentiate by functions and features alone. As the product market turns a commodity, price and service become important buying criteria for some consumers.... In this paper the consumer buying behaviour model has been generally applied to segment consumers which can be used by many large industrial companies. In addition, it will be appreciated how segmentation analysis can be used proactively to influence consumers' movements to segments that are mutually beneficial to the seller and buyer. In contrast, previous application work (Moriarty and Reibstein 1986) attempted to uncover existing segments as a way to position products strategically. Consumer Buying Behaviour Model & Market Segmentation The consumer buying behaviour model is derived largely from economic theory of consumer demand and the normative concepts of economic man and rational behaviour. The assumptions of consumer demand specify that buyers, at the point of purchase, possess perfect information about products and prices, are certain of their own stable tastes and preferences, are capable of perfectly processing information, and can express preferences between goods and bundles of goods without cost (Schwartz 1986). The model for the consumer decision process is based on assumptions about the behaviour of economic man who chooses a good for its primary function. The rational decision maker adheres to the tenets of Herbert Simon's three-step model in which one (1) identifies the problem, (2) gathers information, and (3) makes a choice based on the information (Simon 1957). In spite of contemporary consumer behaviour texts resting heavily on the tenets of psychology and sociology to explain attitudes, motivati ons, and behaviour, the discipline holds fast to economic theory. Research on market segmentation offers several bases for segmenting consumers (Frank, Massy, and Wind 1972), including: demographic descriptors such