Question

Topic: Student Questions

Linking Market Segmentation And Decision Making

Posted by Anonymous on 7/30/2009 at 9:40 AM ET 500 Points
Hi there, I have one question regarding “market segmentation” and “consumer decision making process”. I read about both topics, but I am a bit confused now, what comes first. Do I first segment the market and then analyse the buying behaviour within the different market segments OR do I first look at the buying behaviour and then segment the market on basis of my findings? I mean, both is possible, isn’t it? I really have problems linking these two topics. I would be more tan glad if anyone could help me out here.
Thanks a lot! Kind regards!
To continue reading this question and the solution, sign up ... it's free!
SUBSCRIBE
Or, SIGN IN

RESPONSES

  • Posted on 7/30/2009 at 10:35 AM Accepted
    It depends upon how you plan to segment. If you have survey data, you can upload it to some statistical packages (SPSS, for example) and see how segments naturally fall out.

    If you're just making judgments about a population, though, the best approach is to look at some obvious segments, which could be based, for example, on age, income, usage habits, etc. Then you would try to observe the decision making process within each of these segments. If you find commonalites you may be able to combine into larger segments, or you may find a lot of discrimination within segments, suggesting that they're not refined enough.

    Either way, you want to make sure that it makes sense to conduct this type of segmentation in terms of your business model. For example, if you are considering creating segments based on age, but have no way to track or test how these different segments respond to different marketing elements, such as advertising copy, positioning messages, or promotions, you may want to reconsider whether it makes sense to segment on that variable.
  • Posted by Gary Bloomer on 7/31/2009 at 10:38 AM Member
    Dear Christin333Ari,

    Why not do both? Segment the market and review the buying behavior AND look at the buying behavior and then segment the market.

    From this little exercise you’ll learn the efficacy of research and because you’ll have found the result on your own, it will mean all the more to you.

    I hope this helps.

    Gary Bloomer
    Wilmington, DE, USA
  • Posted by mgoodman on 8/1/2009 at 9:17 PM Moderator
    It depends on what you plan to do with your segmentation. If you are planning to develop different marketing plans for key segments, then you clearly want to let the market "tell you" how it segments itself. After all, you want your plans to be as specific and meaningful for each segment as possible.

    If the segmentation is simply to make some projections on what the total volume is likely to be, then use whatever makes most sense for your market.

    The key is to keep your real objective in mind as you make the decision. If you are not going to be able to measure and act on what you do, then there isn't much need to segment, is there?
BACK TO TOP

Post a Comment

Related Discussions

Community Info

Top 25 Experts
(Student Questions)