A Level Business Studies: Segmenting using customer behaviour

Market segmentation is a process of dividing a market into smaller groups of consumers with similar needs or characteristics.
Behavioural segmentation is one of the ways in which a market can be segmented, based on consumer behaviour.

Behavioural segmentation divides a market based on consumer behaviour towards a product or service.
Consumers are grouped based on their attitudes, knowledge, usage, and response to a product.
The aim is to identify the specific behavioural characteristics of a group that can be targeted with a tailored marketing strategy.

Usage: Frequency of use, benefits sought, and loyalty are the key factors that determine the usage of a product.
Occasion: Occasion-based segmentation involves targeting consumers based on the specific occasion or event when the product is used.
Knowledge: Knowledge-based segmentation targets consumers based on their level of knowledge about the product.
Attitude: Attitude-based segmentation targets consumers based on their attitude towards a product.
Response: Response-based segmentation targets consumers based on their response to a product.

Loyalty programs: Rewarding customers for repeat purchases, increasing brand loyalty and customer retention.
Purchase behaviour: Examining the purchasing patterns of customers, identifying the reasons behind their purchases, and targeting them with tailored marketing messages.
User status: Identifying different types of users, such as first-time users, regular users, and non-users, and targeting them accordingly.

When the company’s product or service is used for a specific purpose, such as toothpaste for sensitive teeth or allergy medicine for seasonal allergies. In this case, the company can use behavioural criteria to target consumers who have a specific need for their product.
When the company wants to target customers who are loyal to their brand or those who frequently purchase from them. Behavioural segmentation can help companies identify and target customers who are likely to make repeat purchases.
When the company wants to promote new products to existing customers. By analyzing the buying behaviour of their existing customers, companies can identify those who are likely to be interested in their new products and target them specifically.
When the company wants to target customers who are price-sensitive. By segmenting customers based on their behaviour, companies can identify those who are most likely to respond to promotions and discounts, and target them accordingly.
When the company wants to target customers based on their usage rate. For example, a company that sells fitness trackers may want to segment their market based on how often customers use the product or how many steps they take per day. This can help the company identify and target their most active and engaged customers.

Tailored Marketing: Allows companies to create targeted marketing campaigns that are more likely to resonate with the intended audience.
Improved Sales: By targeting specific consumer behaviours, companies can create products and services that better meet the needs of their customers, leading to increased sales and revenue.
Improved Customer Loyalty: By targeting customers based on their behaviour, companies can create loyalty programs that incentivize customers to continue purchasing their products.

Disadvantages/Drawbacks:

Limited Scope: Behavioural segmentation only focuses on consumer behaviour, ignoring other important factors such as demographics or psychographics.
Costly: Conducting research on consumer behaviour can be expensive, and implementing tailored marketing campaigns can also be costly.
Complexity: Behavioural segmentation can be complex, as it requires a deep understanding of consumer behaviour and a significant investment in research and analysis.