psychological segments

Examples of psychological segments in the following topics:

• Determining Segmentation Variable(s)

  • Markets can be segmented primarily according to geographic, demographic, usage, and psychological segments--or a combination of the above.
  • Segmentation should recognize psychological as well as demographic influences.
  • For example, Phillip Morris has segmented the market for cigarette brands by appealing psychologically to consumers in the following way:
  • If people with similar attitudes can be isolated, they represent an important psychological segment.
  • People with similar physical and psychological characteristics may be similarly motivated.

• Stimulating Demand

  • The field of psychology defines motive as the inner drive or pressure to take action to satisfy a need.
  • The sources of this arousal may be internal (such as hunger); environmental (viewing a McDonald's advertisement); or psychological (thoughts about food, which can cause hunger).
  • For the most part, the research in motivation involves benefit segmentation and patronage motives.
  • Benefit segmentation may include consumer labels such as price-conscious, convenience-oriented, service-oriented, or other motivation features.
  • Discuss the psychological factors that drive consumer demand, and how they play into marketing segmentation

• Selecting Target Markets

  • Mass marketing - Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.
  • Differentiated marketing - A differentiated marketing strategy is one where the company decides to provide separate offerings to each different market segment that it targets.
  • Each segment is targeted uniquely as the company provides unique benefits to different segments.
  • Concentrated marketing - Concentrated marketing is a strategy which targets very defined and specific segments of the consumer population.
  • Niche marketing is the process of finding market segments that are small but potentially profitable nonetheless.

• The Importance of Market Segmentation

  • Market segmentation allows for a better allocation of a firm's finite resources.
  • Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target and Position.
  • While there may be theoretically 'ideal' market segments, in reality, every organization engaged in a market will develop different ways of imagining market segments, and create product differentiation strategies to exploit these segments.
  • To increase marketing efficiency by directing effort specifically toward the designated segment in a manner consistent with that segment's characteristics
  • Rather, one or more target markets (segments) must be selected.

• Developing a Market Segmentation

  • This allows them to focus all of their efforts on a single segment.
  • There are two major segmentation strategies followed by marketing organizations: a concentration strategy and a multi-segment strategy.
  • This strategy is advantageous because it enables the organization to analyze the needs and wants of only one segment and then focus all its efforts on that segment.
  • In the multi-segment strategy, a company focuses its marketing efforts on two or more distinct market segments.
  • Markets could also be segmented by usage rates.

• Evaluating Market Segments

  • Segmentation involves classifying people into homogeneous groupings and determining which of these segments are viable target markets.
  • Rather, one or more target markets (segments) must be selected.
  • Thus, market segmentation is a twofold process that includes:
  • An ideal market segment meets all of the following criteria:
  • The other segmentation strategy is a multisegment strategy.

• Demand-Based Pricing

  • These include: price skimming, price discrimination, psychological pricing, bundle pricing, penetration pricing, and value-based pricing.
  • As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment.
  • Price discrimination requires market segmentation and some means to discourage discount customers from becoming resellers and, by extension, competitors.
  • Psychological pricing is a marketing practice based on the theory that certain prices have a psychological impact.

• Estimating the Addressable Market

  • The market can be categorized into separate groups called segments.
  • Any discrete variable is a segmentation.
  • Segments can be obtained by any number of approaches.
  • Minimally, an existing discrete variable may be chosen as a segmentation, also called "a priori" segmentation.
  • Each entity in the delivery chain will have different needs, so a complete market needs analysis must include all potential segments and all entities within each segment.

• Social Behavior of Consumers

  • The data helps sales and marketing professionals improve segmentation to target prospects and customers.
  • Psychological factors include an individual's motivation, perception, attitude and beliefs, while personal factors include income level, personality, age, occupation and lifestyle.
  • Extensive research is often used to understand what appeals to buyers: colors, thought triggers, images and sounds; all of these factors address psychological buying behaviors.
  • Psychologically, research shows that men seem to adopt technology faster and have more incentive to try new features.

• Identifying the Target Market

  • In addition to the above segmentations, market researchers have advocated a needs-based market segmentation approach to identify smaller and better defined target groups.
  • Identify clusters of similar needs - Demographics, lifestyle, usage behavior and pattern is used to differentiate between segments.
  • Apply a valuation approach - Market growth, barriers to entry, market access, and switching is used to valuate segments.
  • Test the segments - A segment storyboard is created to test the attractiveness of each segment's positioning strategy.
  • Modify marketing mix - The segment positioning strategy is expanded to include all aspects of the marketing mix.