BASES FOR SEGMENTATION: SOCIOCULTURAL SEGMENTATION USE RELATED SEGMENTATION USAGE SITUATION SEGMENTATION

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Consumer Psychology (PSY - 514)

Lesson 14

BASES FOR SEGMENTATION:

SOCIOCULTURAL SEGMENTATION

USE RELATED SEGMENTATION

USAGE SITUATION SEGMENTATION

1. Sociocultural Segmentation

Sociocultural segmentation combines social (related to groups) and cultural variables (related to the shared values,

beliefs, attitudes of people) that provide further basis for segmentation

Groups

Group may be defined as two or more people who interact with each other to accomplish either individual or

mutual goals e.g.

· Intimate group pf two neighbors

· The local cricket club

· The doctors in a hospital

· Colleagues in an office, etc.

Variables of Socioeconomic Segmentation

· Family Lifecycle

· Social Class

· Core Cultural Values

· Sub-cultural Memberships

· Cross-cultural Affiliation

4. Family Lifecycle

Many families pass through similar phases in their formation, growth and final dissolution. At each stage the family

unit needs different products and services

Family Lifecycle A composite Variable

Family Life Cycle is a composite variable. It is explicitly based upon marital and family status and implicitly reflects

relative age, income and employment status. For example young single people need relatively basic furniture. Their

parents finally free of child rearing often re-furnish their homes with more elaborate pieces. In Pakistan, however,

the family unit is still very strong. The parent children bond hardly weakens throughout the life. Senior parents

now have their sons in laws and daughters in laws to take care of. There are various rituals and norms of the family

that they have to fulfill with regards to their daughters in laws, sons in laws as well as grand their grand children.

Senior parents after many years of professional experience usually have greater buying power as well. They have to

do a lot of shopping for the rituals and norms.

Each stage in the traditional family life cycle represents an important segment for the marketers. Financial services

industry frequently segments customers in terms of family life cycle stages as the required financial services tend to

shift as they pass through different stages of life.

Stages in the Family Lifecycle

Stages in the Family Lifecycle include:

· Bachelorhood (what do they buy...)

· Newly Married Couples (what do they buy...)

· Parenthood and (what do they buy...)

· Post parenthood (what do they buy...)

· Dissolution

2. Social Class

What is social class? We frequently hear direct or indirect references to social class, like,

Consumer Psychology (PSY - 514)

This place is not my class, this item is not my class, In my family we don't go for the jobs, we have lands or we

have business to take care of, etc...

Social Class is a hierarchy in which the individuals in the same class generally have the same degree or status

whereas the members of other classes have a higher or lower status.

Social Class as Basis for Segmentation

Social Class can be used as a basis for segmentation. Consumers on different social classes vary in terms of values,

product preferences and buying habits.

Marketers may offer products to the consumers that correspond to their wealth status. Shopkeepers, while

bargaining, tend to hint upon a person's relative social class to increase the chances off purchase. They do so while

saying

"Oo Baji yeh khas kapra aap ki class kay liyay hi hay, yeh aap kp bauhat suit karay ga, agar nahin to chalain aap yeh

lay lein"

" Sastay kapray ki dookanein aap ko bauhat mil jaien gi, yahan par to quality ka maal milta hai aur is kay liyay aap

ko kuch ziyada daina paray ga" Zara logon ko pata to chalay key app ka kya andaaz hai

Investment companies appeal to upper classes by offering them investment opportunities corresponding to their

wealthy status. In contrast a financial program targeted to lower socio-economic class might talk about savings

account or certificates of deposit.

Measurement Social Class

Social Class is measured a weighted index of demographic variables such as Education, Occupation and Income.

3. Culture and Subcultural Memberships

This approach corresponds to dividing consumers on the basis of cultural heritage. Members of the same culture

tend to have same values, beliefs and customs.

Culture

Culture refers to relatively specialized lifestyle of a group consisting of their beliefs, values, artifacts, ways of

behaving, ways of communicating that is passed on from one generation to the next.

Included in the culture will be all that members of a culture have produced and developed, their language, modes

of thinking, art, laws and religion.

For example the Pakistani Marriage includes elaborate set of rituals and norms, norms on the boy's family side,

norms on the girls' family side. A marriage may be broken down into following constituents

Match making: Vast Industry of match makers consisting of many different types. Now internet and other

electronic media play a significant role in match making)

Engagement: Industry of the engagement planners, private players, hotels, marriage halls

Marriage: Barri on the boys' side (Specialized Barri Packages), Dowry on the girls side (Specialized Dowry

Packages),

Marriage functions: Mehndi, Barrat, Walima

Subcultural Memberships

Within the larger culture distinct sub-groups (subcultures) often are united by certain experiences, values or beliefs

that make a significant market segment. These groupings may be based upon specific demographic characteristics

(race, religion, ethnicity, or age) or lifestyle characteristics (teachers, joggers)

Now as the world has grown smaller and smaller a true global marketplace has developed, which calls for the need

of Cross-cultural and Global Market Segmentation.

Consumer Psychology (PSY - 514)

For example, a young man while preparing for his exam at home may be:

· Drinking a CSD that originated from America

· Wearing a trouser of an international brand that comes from Dominican Republic

· Wearing a watch that came from Japan

· Wearing shoes that came from China

· Some global market segments such as teenagers appear to want the same types of products regardless of

which nation they call home

Similarly, an international brand of sneakers used the same global advertising campaign in 140 countries to launch

a line of sneakers

2. Use- Related Segmentation

Categorizing consumers in terms of product, service, or brand usage characteristics is included into Use Related

Segmentation. The variables usually include:

Levels of usage

Level of awareness

Brand loyalty

Rate of Usage Segmentation

Rate of Usage Segmentation means differentiating according to the rate of usage. The variables may include:

· Heavy Users

· Medium Users

· Light Users

· Nonusers

Organizing Customers into Action Oriented Frameworks

A segmentation strategy is especially suitable for marketers seeking to organize their database into an action-

oriented framework. The framework proposes a way to identify a firm's best customers by dividing them into

following categories:

Segment Name

Segment Characteristic

Company Action

Lo Lows

Low current share, low consumption patterns

Starve

Hi Lows

High current share, low consumption customers

Tickle

Low Highs

Low current share, high consumption customers

Chase

Hi Highs

High current share, high consumption customers

Stroke

Targeting Heavy Users

Research has consistently indicated that 25-35% of the consumers account for 70-80% of all consumption. For the

very reason most marketers target their advertising campaigns to heavy users than spend considerably more money

to attract the light users

Targeting Low Users

Marketers take note of the gaps in the market coverage for light and medium users and target them profitably

Consumer Psychology (PSY - 514)

Segmentation @Awareness Status

Consumers may be segmented on the basis of awareness level. Aspects of awareness are:

· Consumer awareness of the product

· Interest level in the product

· Readiness to buy the product

Brand Loyalty as a Basis for Segmentation

Marketers often try to identify the characteristics of their brand loyal customers so that they can direct their

promotional efforts to people with similar characteristics. Other marketers target consumers who show no brand

loyalty in the belief that such people represent greater market potential than consumers who are loyal to competing

brands. Marketers stimulate and reward brand loyalty by offering special benefits to consistent and frequent

consumers

3. Usage-Situation Segmentation

Occasion or situation often determines what consumers will purchase or consume. They sometimes focus on the

usage situation as a segmentation variable. For example:

Whenever our son Ali gets a promotion or raise we always take him out to dinner

When I am away on business for a week or more, I try to stay at a suites hotel

Every Sunday when we go to the market for grocery we have our lunch at the Baryani House

Products for Special Usage Occasions

The greeting card industry, e.g. stresses special cards for a variety of occasions, e.g. Grandparents day, Secretaries

Day, etc...

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