Customer Segments (Part B) PDF

Topic 2: Customer Segments (PART B)  On completion of this topic you will be able to:  Understand the theory of customer segments  Define customer profiles of a retail business  Define customer needs.  Conduct basic research on customer needs  Understand product specificatio...

Topic 2: Customer Segments (PART B)  On completion of this topic you will be able to:  Understand the theory of customer segments  Define customer profiles of a retail business  Define customer needs.  Conduct basic research on customer needs  Understand product specifications  Explain the shopping behaviour of customers in a retail store  Customer Profiling Acustomer profile is a generic description of the type of customers likely to purchase a retail store’s products and services. These describe the typical users of a product or a service.  Generic Customer Profiles Geographic segmentation is a marketing strategy, whereby, prospective buyers are divided on the basis of geographic units, like countries, cities, provinces  Generic Customer Profiles Segmentation based on various demographic factors, like age, gender, social class, etc. The word 'demographic' is derived from 'demography', meaning the study of population.  Generic Customer Profiles It is the division of the market according to a mixture of occupation and income. Each socio- economic group (A-E) has broadly similar characteristics, which infer taste, lifestyle and level of disposable income  Generic Customer Profiles Segmentation based upon different personality traits, values, attitudes, interests, and lifestyles of consumers.  Generic Customer Profiles Based on actual consumer buying behaviour. It divides the market into groups of customers according to their knowledge of, attitude towards, use of or response to a product  Living Standards Measure (LSMs)  It is a means of segmenting the South African market that cuts across race, gender, age or any other variable used to categorize people. Instead, it groups people according to their living standards.  The SAARF LSM (Living Standards Measure) has become the most widely used marketing research tool in Southern Africa. It divides the population into 10 LSM groups, 10 (highest) to 1 (lowest). Previously eight groups were used but this changed in 2001 when the new SAARF Universal LSM consisting of 10 groups was introduced.  The SAARF LSM is a unique means of segmenting the South African market. It cuts across race and other outmoded techniques of categorising people, and instead groups people according to their living standards using criteria such as degree of urbanisation and ownership of cars and major appliances.  Defining customer needs  Customer needs refers to problems that customers intend to solve with the purchase of goods and services. The expectations begin with an identified need.  Customer Shopping Behaviour  Buying/shopping behaviour is the decision processes and acts of people involved in buying and using products (As previously discussed in last semester – Chapter 3).