ASSIGNMENT TOPIC

Consumer Behavior in Market Segmentation, Socio-Cultural

Segmentation

Submitted to: Prof. Dr. Serajul Hoque

Submitted
By
Fahad Bin Alfaz (Aesheak)
Consumer Behavior 541E
School of Business
ID-0110155

INDEPENDENT UNIVERSITY, BANGLADESH

June 2014

About Consumer Behavior

Consumer behaviour is the study of individuals, groups, or organizations and the
processes they use to select, secure, and dispose of products, services, experiences, or
ideas to satisfy needs and the impacts that these processes have on the consumer and
society. Consumer behaviour is the study of individuals, groups, or organizations and
the processes they use to select, secure, and dispose of products, services,
experiences, or ideas to satisfy needs and the impacts that these processes have on
the consumer and society.
[1] It blends elements from psychology, sociology, social anthropology, marketing and
economics. It attempts to understand the decision-making processes of buyers, both
individually and in groups such as how emotions affect buying behaviour. It studies
characteristics of individual consumers such as demographics and behavioural
variables in an attempt to understand people's wants. It also tries to assess influences
on the consumer from groups such as family, friends, reference groups, and society in
general. Customer behaviour study is based on consumer buying behaviour, with the
customer playing the three distinct roles of user, payer and buyer. Research has shown
that consumer behaviour is difficult to predict, even for experts in the field.
[2] Relationship marketing is an influential asset for customer behaviour analysis as it
has a keen interest in the re-discovery of the true meaning of marketing through the reaffirmation of the importance of the customer or buyer. A greater importance is also
placed on consumer retention, customer relationship management, personalisation,
customisation and one-to-one marketing. Social functions can be categorized into social
choice and welfare functions.
Each method for vote counting is assumed as social function but if Arrows possibility
theorem is used for a social function, social welfare function is achieved. Some
specifications of the social functions are decisiveness, neutrality, anonymity,
monotonicity, unanimity, homogeneity and weak and strong Pareto optimality. No social
choice function meets these requirements in an ordinal scale simultaneously. The most
important characteristic of a social function is identification of the interactive effect of
alternatives and creating a logical relation with the ranks. Marketing provides services in
order to satisfy customers. With that in mind the productive system is considered from
its beginning at the production level, to the end of the cycle, the consumer.

Market segmentation
Abstract:
It is important to remain creative when conducting segmentation research, as many
different ways to segment a market can exist. Five main bases are discussed:
geographic, demographic, psychographic, behaviouristic and image. This is followed by
an overview of the main techniques used to establish and verify segments, including
automatic interaction detector, conjoint analysis, multidimensional scaling and canonical
analysis. Segmentation yields positive results only if the right segment is chosen. While
choosing a target segment care should be taken that the segment is measurable
(quantifiable in terms of market size), substantial (commercially viable), accessible
(easy to reach and address to), and differentiable (different in some way from the other
segments).

Details:
Market segmentation is the process of dividing the market on the basis of certain major
factors - geography, demography, psychology, psychographics, socio-culture factor,
use-related factor, use-situation factor, and benefits, or on multiple factors like
psychographic-demographic segmentation, geodemographic segmentation, and SRI
Consulting's
VALS.
Geographic segmentation involves segmenting consumers on the basis of region,
climate, size of city, and density of population. Demographic segmentation involves
segmenting consumers on the basis of demographic variables like age, sex, marital
status, education, occupation, and income. Psychological segmentation involves
segmenting the market on the basis of psychological variables like motivation,
personality, attitude, perception, and learning.
Psychographic segmentation divides consumers on the basis of difference in lifestyle,
attitude, interest, and opinions. Socio-cultural segmentation divides consumers on the
basis of culture, sub-culture, cross-culture, religion, social class, and family life cycle.
Use-related segmentation divides consumers on the basis of usage rate, awareness
status, and brand loyalty. Use-situation segmentation involves segmenting consumers
on the basis of time, objective, location, and person. Benefit segmentation segments
consumers on the basis of the benefit they seek like prestige, confidence, health,
nutrition etc.

Multi-segmentation involves combining segmentation various variables to effective

segmentation. Some popular multi-segmentation tools are psychographic-demographic
segmentation, geodemographic segmentation, and SRI Consulting's Values and
Lifestyle System (VALS). Segmentation yields positive results only if the right segment
is chosen. While choosing a target segment care should be taken that the segment is
measurable (quantifiable in terms of market size), substantial (commercially viable),
accessible (easy to reach and address to), and differentiable (different in some way
from the other segments).
After selecting the relevant segment(s), the marketer has to formulate a marketing mix.
The marketers may choose to cater to a single segment or multiple segments, with
single or multiple products - single product-single segment strategy (concentration
strategy); single product-multiple segments (product specialization strategy); single
segment-multiple products (market specialization strategy); and multiple productsmultiple segments (selective segmentation strategy).
Big marketers, at times, may also employ a full market coverage strategy, which may
further be differentiated (different marketing mix for different products) or
undifferentiated (single marketing mix for all products). Sometimes marketers adopt too
many micro segments, which later become redundant. In such a case, all segments are
clubbed together with a single marketing mix (counter segmentation).
After selecting the relevant segment(s), the marketer has to formulate a marketing mix.
The marketers may choose to cater to a single segment or multiple segments, with
single or multiple products

Single product-single segment strategy (concentration strategy)

Single product-multiple segments (product specialization strategy)
Single segment-multiple products (market specialization strategy)
Multiple products-multiple segments (selective segmentation strategy)

Big marketers, at times, may also employ a full market coverage strategy, which may
further be differentiated (different marketing mix for different products) or
undifferentiated (single marketing mix for all products). Sometimes marketers adopt too
many micro segments, which later become redundant. In such a case, all segments are
clubbed together with a single marketing mix (counter segmentation) Actually market

segmentation is the process of dividing the market on the basis of certain major factors,
which are given below in details -

1. Geographic Segmentation involves segmenting consumers on the basis of

region, climate, size of city, and density of population.
2. Demographic Segmentation involves segmenting consumers on the basis of
demographic variables like age, sex, marital status, education, occupation, and
income.
3. Psychological Segmentation involves segmenting the market on the basis of
psychological variables like motivation, personality, attitude, perception, and
learning.
4. Psychographic Segmentation divides consumers on the basis of difference in
lifestyle, attitude, interest, and opinions.
5. Socio-cultural Segmentation divides consumers on the basis of culture, subculture, cross-culture, religion, social class, and family life cycle.
6. Use-related Segmentation divides consumers on the basis of usage rate,
awareness status, and brand loyalty.
7. Use-situation Segmentation involves segmenting consumers on the basis of
time, objective, location, and person.
8. Benefit Segmentation segments consumers on the basis of the benefit they
seek like prestige, confidence, health, nutrition etc.
9. Multi-segmentation involves combining segmentation various variables to
effective segmentation. Some popular multi-segmentation tools are
a. psychographic-demographic segmentation,
b. geodemographic segmentation, and SRI Consulting's Values and Lifestyle
System (VALS).

Socio-cultural segmentation
Sociocultural segmentation combines social (related to groups) and cultural variables
(related to the shared values, beliefs, attitudes of people) that provide further basis for
segmentation. Segmentation is a division into segments. Sociocultural segmentation
combines social (related to groups) and cultural variables (related to the shared values,
beliefs, attitudes of people) that provide further basis for segmentation. Consumer
behavior is mostly influenced by the below given factors:
Cultural Factor
Social Factor
Personal Factor
Psychological Factor
Marketing mix
Brand

Social Factors :
Consumer behavior is also influenced by social factors, such as
Groups
Family
Roles and status

Groups :
Group means when two or more people who interact for accomplishing individual or
mutual goals. A person's behavior can be influenced by many small groups. Groups
that have a direct influence and to which a person belongs are called membership
groups. Some are primary groups includes family, friends, neighbors and coworkers.
Some are secondary groups, which are more formal and have less regular interaction.

These include organizations like religious groups, professional association and trade
unions.

Family:
Family members can strongly influence buying behavior. The family is the most
important consumer buying organization in the society. Marketers are interested in the
roles, and influence of the husband, wife and children on the purchase of different
products and services.

Roles and Status:

A person belongs to several groups, family, clubs, and organizations, the person's
position in each group can be defined in terms of both role and status. For an example,
"X" plays the role of father, in his family, also he plays the role of son, in his fathers
family, also he might be brother in the same family, etc. A Role consists of the activities
people are expected to perform according to the persons around them.