BASES FOR SEGMENTATION: BENEFIT SEGMENTATION:Intrinsic Cues

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Consumer Psychology (PSY - 514)

Lesson 15

BASES FOR SEGMENTATION:

BENEFIT SEGMENTATION

1. Benefit Segmentation

Marketers and Advertising Executives constantly try to identify one most important benefit of their product. e.g.

Zaikay ka Naya Andaaz

Dimaagh ki batti ko ropshan kar day

A segmentation study identifying what drives consumers' preferences identified the five strategic brand benefits:

Functional (quality)

Value for money

Social Benefit

Positive Emotional Benefit

Negative Emotional Benefit (Cigarettes)

1. Functional Benefit (Quality)

Consumers often judge the quality of a product or service on the basis of a variety of informational cues that they

associate with the product.

These cues may be:

1. Intrinsic Cues

2. Extrinsic Cues

1. Intrinsic Cues

Cues that are intrinsic concern the physical features of a product itself, such as size, color, flavor or aroma. In

some cases consumers use physical characteristics (e.g. the flavor of ice-cream or cake) to judge product quality

Consumers like to believe that they base their evaluations of product quality on intrinsic cues because that enables

then to justify their product decisions as being rational or objective product choices

2. Extrinsic Cues

Evaluating the product on the basis of cues that are outside the product itself. Extrinsic cues may include:

packaging, pricing, advertising, peer pressure, brand image, manufacturer's image, retail store image or even

country of origin. For Example: Most Cola drinkers can't differentiate between the tastes of different Colas. They

base their preferences on external cues

2. Value for Money

Value of Money is related with the price of the product. How consumers perceive price as high, low or fair?

Consumers' Perception of Price

Consumers pay attention to prices paid by others. No one is happy knowing that S/he paid the price twice as

much for an airline ticket than the next person. Price unfairness affects consumer's perception of product value

and ultimately the willing ness to buy.

Consumer Psychology (PSY - 514)

Two types of reference prices are important to understand the consumers' perception of price

Reference Price

Internal reference Price

External reference Price

Reference Price

Any price that consumer uses as a basis for comparison in judging other prices

Internal reference Price

Prices (or price ranges) retrieved by the consumers from the memory

External reference Price

External Reference Price is in reference to prices elsewhere.

3. Social Benefit

Some researchers associate social benefit with the concept of social class. Social class is often measured in terms of

social status. Status is frequently thought of as relative ranking of members of each social class in terms of specific

status factors

Social Comparison Theory

Individuals quite normally compare their own material possessions with material possessions owned by others in

order to determine their relative social standing. In a marketing society status is often associated with consumers'

purchasing power. Individuals with greater purchasing power or greater ability to make purchases have greater

status. Downward Comparison: comparing with someone worse off. Upward Comparison: comparing with

someone better off

4. Positive and Negative Emotional Benefit

Positive Emotional Benefit

Needs, desires or wants may lead to goals that are positive or negative. A positive goal is one towards which the

behavior is directed. This is often called the approach object. A middle aged woman with a positive goal of fitness

may join a health club to work out regularly

Negative Emotional Benefit

A negative emotional benefit is one from which behavior is directed away and is thus referred to as an avoidance

object. A husband who views getting fat as a negative objective may join health club to guide his exercise

2. Changing Lifestyles

Also play an important role in determining the product benefits that are important to consumers and provide

marketers with new opportunities for new products and services. The microwave Owen served a perfect solution

to the needs of dual income homes, where both husband and wife do the jobs that leaves them with little time to

do their cooking.

3. Various Brands within One Product Category

Benefit segment may be used to position various brands within the same product category. The classic case of

successful benefit segmentation is tooth paste:

Consumer Psychology (PSY - 514)

If the consumers are socially active they want a toothpaste that can deliver cleaner teeth and fresh breath

If they smoke they want a toothpaste that fights stains

If disease prevention is their major focus they want a tooth paste that will fight germs

If they have children they want a toothpaste that will lower their dental bills

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