Segmentation Techniques

Segmentation Techniques

MKT 571

Segmentation Techniques

VALS (Values and Lifestyle) is a research method used for psychographic market segmentation (Kotler & Keller, 2016, p. 258). Market segmentation is designed to assist companies and individuals design and manufacture their products and services in a manner that attracts buyers. This paper will provide a summary of my VALS results and the PRIZM segmentation methodologies. The paper will compare my results showing my buying behaviors with what I know of organizational buying behaviors. Finally, the paper will discuss how consumer behaviors differ from organizational behaviors and examine the dimensions of the consumer segments as well as organizational segments.

My VALS

Upon completion of the VALS, I have learned that my primary type is an innovator, and my secondary type is an achiever. The innovator consumer group possesses all three primary motivations in varying degrees (Strategic Business Insights, 2016). According to Strategic Business Insights (2016), “People associated with this group generally:

An innovator is an interesting group of consumers that I find pretty interesting and similar to my personality. Innovators do not take advertisements at face value, which can pose marketing challenges. This group of consumers is also future-oriented; do not mind trying new things, and have a wide variety of interests, which makes them an ideal market to target.

1. Are always taking in information (antennas up)
2. Are confident enough to experiment
3. Make the highest number of financial transactions
4. Are skeptical about advertising
5. Have international exposure
6. Are future oriented
7. Are self-directed consumers
8. Believe science and R&D are credible
9. Are most receptive to new ideas and technologies
10. Enjoy the challenge of problem-solving
11. Have the widest variety of interests and activities.”

In the same way, my secondary consumer group is the achiever. Achievers have an abundance of resources and are motivated by achievement (Strategic Business Insights, 2016). According to Strategic Business Insights (2016), “Those associated with this group generally:

Achievers are motivated by the desire for achievement and place a great deal of emphasis on family. They are viewed as very active consumers in the market. This consumer group also corresponds with me.

1. Have a “me first, my family first” attitude
2. Believe money is the source of authority
3. Are committed to family and job
4. Are fully scheduled
5. Are goal oriented
6. Are hardworking
7. Are moderate
8. Act as anchors of the status quo
9. Are peer conscious
10. Are private
11. Are professional
    • Value technology that provides a productivity boost.”

Nielsen PRIZM Segmentation Methodology

Equally important, after exploring the Nielsen Segmentation Methodologies I found that the segment that I identify with most is “White Picket Fences.” I chose this segment because out of the five presented it seems to fit my lifestyle and overall situation and circumstances best. I fall within the social, lifestyle, and income groups for this segment. The neighborhood I reside in is made up of fairly modest homes, and there is a lot of diverse ethnicity within households. I also associate myself with this segment because there are some common characteristics with our purchasing power. There are not many differences in the factors that affect our purchasing power such as culture, income, and religion.

Buying Behaviors

On the other hand, companies and manufacturers now understand the factors that affect purchasing power create a type of behavior that influence consumers decision of how and what to buy. Consumers have to make decisions based on predictions about how they feel, how they will feel later, or how others will feel about a product. That is why it is important to study the market purchasing behavior to understand its needs, and cater products that are consistent with people’s needs.

Organizational Behaviors

Similarly, everyone has their philosophy that directs their buying behavior. My buying behavior differs from organizational buying behavior due to decision making, the buying. process, and factors that influence my buying behavior. I examine and purchase products or the services that satisfy and fit my needs. When what is available does not fit my needs, I have to adapt and be flexible to be consistence with what is available in the market. Sellers change their products and services to satisfy the organizational buyers need.

Organizations and individual have to purchase products and services to suit their daily needs. There are several factors that influence individual and organizational buyer behavior. There are also many characteristics that distinguish consumer behavior from organizational behavior. Some characteristics that distinguish organizational and individual buying include:

Furthermore, organizational buying differs from consumers buying behavior based on how and why organizations buy products and services compared to how and why individual consumers buy products and services. Organizations buy larger volumes of products and services than individual consumers, which is driven by customers demand and the need to meet the demand; while individual consumers are driven to purchase based on their needs and wants. The use of an effective marketing strategy can alter consumer attitudes, making it more consistent with a specific product or service; luring them to purchase, yet organization buyers manipulate the sellers’ attitude to be consistent with their needs.

1. Organizations must not be placed in a specific category. Every organization has a philosophy and way of running a business.
2. With organizations, groups are involved in the decision making. Individuals make their decisions.
3. The decision process in organizations takes time, slowing things down between the initial contact with a customer and the buying decision. The individual decision process can take seconds.
4. Quantitative criteria dominant motivates organizational buyers.
5. Organizational buying usually involves considering some technical factors before buying.

Consumer and Organization Segment

Segmentation techniques are used to define the overall market into individual market segments. Factors include a description of consumers, information about their buying behavior, their lifestyle, and goals. To efficiently develop a marketing strategic plan, the company should segment the market and determine the dimensions of the consumer and organizational segments.

Consumer Segments:

Organizational Segments:

1. Geographic segmentation: regions, countries, and any geographic areas.
2. Benefit segmentation: Segmenting consumers based on what they are seeking from the product.
3. Demographic segmentation: Segmenting based on population characteristics like martial status and even gender.
4. Behavioral segmentation: Segmenting based on the connection with the product like brand loyalty and high or low users?
5. Psychographic segmentation: Understanding the population lifestyle, education level, etc.

In conclusion, VALS (Values and Lifestyle) is a research method used for psychographic market segmentation (Kotler & Keller, 2016, p. 258). Market segmentation is designed to assist companies and individuals design and manufacture their products and services in a manner that attracts buyers. Organizational buying differs from consumers buying behavior based on how and why organizations buy products and services compared to how and why individual consumers buy products and services. The use of an effective marketing strategy can alter consumer attitudes, making it more consistent with a specific product or service; luring them to purchase, yet organization buyers manipulate the sellers’ attitude to be consistent with their needs.

1. Geographic location: where does the organization operate?
2. Culture and Personality: organization management style?
3. Behavioral / operating practices: decision-making process and how are organizational purchasing decisions made?
4. Organization Description: What kind of business is it? What industry does it operate in?
5. Conclusion

References

Kotler, P. T., & Keller, K. L. (2016). Marketing Management (15th ed.). Upper Saddle River,

NJ: Pearson/Prentice Hall. Retrieved from UOP MKT/571 Course Material

Strategic Business Insights. (2016). Innovators. Retrieved from

http://www.strategicbusinessinsights.com/vals/ustypes/innovators.shtml