Example Of Essay On Behavioral And Demographic Market Segmentations

Behavioral Segmentation and Demographic Segmentation.

Behavioural segmentation is a marketing strategy that studies the market and groups of consumers according to their behavior. Consumers who exhibit similar behaviour such as tastes, preferences, loyalty towards a product are put in one group. These groupings then help marketers formulate strategies that will be employed in advertisements and promotions. Demographic segmentation on the other hand is where a product is tailor made to suit a certain group of consumers. A market can be divided according to such consumer variables as religion, level of income, age, gender, among others. In demographic segmentation, a firm or its department specialises in the manufacturing of products for a specific pre-determined category of consumers, like female perfumes.
The main contrast between behavioral segmentation and demographic segmentation is that in behavioural segmentation, the marketer’s focus is on the strategies that will best attract and retain customers whilst demographic segmentation focuses on product specifications and variations for a certain group/class of consumers.
An example of behavioral segmentation can be seen in the airline industry where frequent flyer program is designed to reward loyal customers. They are awarded with points which can be redeemed for free tickets. This is best illustrated by Qantas Airline of United Emirates which offers points for every air ticket purchased by travellers registered under the frequent flyer program. A minimum of 800 points per ticket are awarded which can be redeemed with Classic Flight Rewards. Examples of these classic rewards are Points plus Pay Flights or Qantas Classic Upgrade Reward. The traveller can also pay air ticket using points and the balance can be paid in cash. Another example is budget airlines which gives its frequent customers a discount of 10% on standard rate.
Other customers are rewarded according to the quantity of items they purchase. For example Virgin America Airline and Gilt City have a discount agreement that allows Gilt City to purchase 10 long-trip flight tickets for a price of 3,500 dollars.

These strategies are aimed at not only attracting new customers, but also maintaining the old ones.

An example of demographic segmentation can be seen in the car manufacturing industry where, for instance, Toyota manufactures different models for customers of different income levels. In this case, the Toyota Landcruiser Lexus model targets high income earners whereas the Toyota Corolla model is for the low income earners.
Behavioral segmentation can also cut across demographic groupings whereby a product can be designed for specific groups of consumers based on demographic variables such as age but the strategic marketing be influenced by the behaviour of these consumers.
A good example of this is illustrated in the way Procter & Gamble designs some of its products. The diapers department focuses in the production and designing of pampers whose targeted consumption is primarily babies. The main purpose is to keep babies dry. This is a demographic grouping. The marketing strategy here is one that focuses on mothers. As much as pampers are mainly won by babies, the target group for marketers are their mothers. This is because mothers are the users of the marketing information and therefore the product must meet their tastes and preferences. Some mothers are loyal to the Pampers brand and may stick to it even if prices go up while others may prefer Huggies brand. This is behavioral segmentation.