Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 7 SEGMENTATION AND POSITIONING PRINCIPLES
Summary of background customer characteristics
The background customer characteristics discussed previously all examine the individual 
in isolation from the specific market of interest. While in some markets they may be able 
to discriminate between probable users and non-users of the product class, they can rarely 
explain brand choice behaviour. Members of the same segments based on background char-
acteristics may behave differently in the marketplace for a variety of reasons. Similarly, 
members of different segments may be seeking essentially the same things from competing 
brands and could be usefully grouped together. While traditionally useful for the purposes 
of media selection and advertising atmosphere design, these characteristics are often too 
general in nature to be of specific value to marketers. They are essentially descriptive in 
nature. They describe who the consumer is, but they do not uncover the basic reasons why 
the consumer behaves as they do.
7.5.2 Customer attitudinal characteristics for segmenting markets
Attitudinal characteristics attempt to draw a causal link between customer character-
istics and marketing behaviour. Attitudes to the product class under investigation and 
attitudes towards brands on the market have both been used as fruitful bases for market 
segmentation.
Benefit segmentation
Classic approaches (such as Haley, 1968, 1984) examine the benefits customers are seeking 
in consuming the product. Segmenting on the basis of benefits sought has been applied to 
a wide variety of markets, such as banking, fast-moving consumer products and consumer 
durables. The building society investment market, for example, can be initially segmented 
on the basis of the benefits being sought by the customers. Typical benefits sought include 
high rates of interest (for the serious investor), convenient access (for the occasional investor) 
and security (for the ‘rainy day’ investor).
Nokia recognised that phones were seen by many customers as fashion accessories. The 
Nokia 5510, for example, was aimed at fashion-conscious young people who used their 
phones for text messaging and music. While the market in the late 1990s was dominated by 
first-time purchasers of phones, replacement purchases in Western Europe accounted for 
60 per cent of sales in 2001 and were predicted to rise to nearer 99 per cent by 2006. The 
Samsung A400 phone had a flip-up lid in a red ‘feminine’ version, called the ‘Ladyphone’, 
with special features such as a biorhythm calculator, a ‘fatness’ function that calculates 
height-to-weight ratio and a calorie count function that estimates calories burnt for every-
day activities such as shopping, cleaning and cooking. Nokia even launched a subsidiary 
named ‘Vertu’, which marketed platinum-cased handsets with sapphire crystal screens for 
the very rich (they retail at $21,000) (Economist, 26 January 2002). However, the company 
was later sold, and stopped trading altogether in 2017.
Benefit segmentation takes the basis of segmentation right back to the underlying rea-
sons why customers are attracted to various product offerings. As such, it is perhaps the 
closest means yet to identifying segments on bases directly relevant to marketing decisions. 
Developments in techniques such as conjoint analysis make them particularly suitable for 
identifying benefit segments (Hooley, 1982).