What Is Behavioral Segmentation?
Definition. Behavioral segmentation refers to the grouping of total consumers in a market into homogeneous groups based on their mutual buying behavior patterns.
There are many factors that affect the consumer behavior while responding to a product and take a decision to buy it. The consumer decision making process is greatly influenced by consumer behavior. This is how behavioral segments are targeted by marketers.
The main point behind behavioral market segmentation is to understand your customer needs and wants based on their buying behavior of product or service. Behavioral segmentation group consumers based on some similarity. This similarity is the mutual behavior of consumers towards a product.
Behavioral segmentation in marketing allows marketers to market product in a specific manner that targets their potential consumers through offering a message that caters some need and want of consumers, stimulating them to purchase the product.
Also, behavior market segmentation allows companies to create market strategies that customize their products offering something unique to consumers that they want or desire, thus proving more competitive in the market as well.
Behavioral segmentation is used generally by products or services that are a niche in nature and target specific needs and requirements of an individual.
Examples of Behavioral Segmentation
Behavioral segmentation that studies the behavior of consumers towards a product or service consists of different variables that are studied by marketers to accordingly devise a market strategy. Based on the particular requirement of the market, behavioral segmentation is divided into variables namely brand loyalty, benefit sought, readiness to buy/purchase, and usage based segmentation.
Brand Loyalty Based Segmentation
This is one major behavioral market segmentation variables that marketers use to segment their consumers. Businesses generally grow by adopting two major actions. Firstly attracting consumers to purchase and use a product or service and secondly, retain that customer. Retention of customers is based on how loyal they are to a product or service and the more brand loyalty a product or service enjoys, the more is its customer base. This is one common behavioral segmentation strategy that marketers use to create brand loyalty in consumers.
The best examples of companies that practice this segmentation belong to the hospitality industry, hotels, airlines, restaurants, etc. Emirates Airlines is one example of a company that offers excellent services in all related areas to retain its customers. When a customer is treated so nicely and is offered exactly what he or she desires, this creates brand loyalty and thus loyal Emirates customers will fly with the airline every time they need to.
Benefit Sought Based Segmentation
Benefit sought segmentation is based on the different benefit consumers derive from a product and service. When a consumer purchases a product, he or she has some expectations in terms of benefits.
If you conduct a survey and ask every individual customer the reason behind using your product or service, to some extent you will receive a unique response from every customer.
Suppose, Head & Shoulders Shampoo targets individuals with dandruff issues. Every individual requires washing their hair; however, those who suffer from dandruff are the target customers of Head & Shoulders. Similarly, Colgate and Sensodyne toothpastes target individuals with sensitive teeth.
Readiness to Buy Based Segmentation
Readiness to buy in behavioral segmentation refers to the grouping of potential buyers who are at different psychological stages of the purchasing cycle. The purchasing cycle starts from product unawareness to awareness, product-related knowledge, interest development, desire to purchase product, and finally the intent to purchase the product.
When marketers understand the stage at which consumers are standing, they can better decide on which promotional activities can offer better results and which medium can effectively reach out to these customers.
Usage Based Segmentation
Usage based behavioral segmentation target the customer’s habit of repeated purchases. behavioral market segmentation divides customers based on usage, categorizing them under the
- Heavy usage
- Moderate usage
- Less usage
Skin care products, for example, target their consumers through offering large containers and tubes for consumers that are placed under the heavy usage category, while offering small packages or sachets for individuals who lay under the less usage category.
Another example of electronic companies like LG Electronics. This Company market their products offering the biggest discounts to the highest purchaser. For example, offering a 15% discount on a TV and a 35% discount on the purchase of an Air Conditioner.