INDIVIDUALS.

What is segmentation?

 

Segmentation identifies groups of buyers within a market who share similar needs and demonstrate similar purchasing behavior. Demographics and psychographics describe market segmentation.

 

• Demographics: age group, sex, religion, income, life cycle.

• Psychographics: education, attitudes, and opinions, lifestyle.

 

How does segmentation work?

 

Demographics and psychographics target a segment using data to build a customer profile and a typical consumer's image. People can be targeted as individuals or a family group that lives together and makes up a household. Marketers use the ABC socio-economic categories to target groups.

 

ABCs are a prized customer segment with a high disposable income and strong economic power. Homemakers who stay at home and look after the family are often the main shoppers for a household and are frequently targeted by marketers for certain services.

 

Common market segments

 

Although every department has definitions and names for its target market segments, there are some standard terms. In 1962, Everett Rogers described five market segments in his book Diffusion of Innovations:

 

• Innovators create something new and start a new trend—well-informed risk-takers willing to try an unproven product. Innovators represent the first 2.5% to adopt the product (or service).

• Early adopters identify trends early and like to be associated with the start of a trend. Based on the positive response of innovators, early adopters then begin to purchase the product (or service). Early adopters tend to be educated opinion leaders, representing about 14% of consumers.

• The early majority follows the trends set by the early adopters. They rely on recommendations from others who have experience with the product (or service). The early majority represents 33% of consumers.

• The late majority follows the trends that the early majority has tested. Somewhat skeptical consumers acquire a product (or service) only after it has become commonplace. They represent about 33% of consumers.

• Laggards are the last group to buy a product (service) or brand; they may never buy it. Those who avoid change may not adopt a new product (or service) until traditional alternatives are no longer available. They represent 17% of consumers.

 

The term consumers represent both individuals and organizations.

 

The adoption rate depends on many factors, including perceived benefits over alternative products, the communicability of the product benefits, price and ongoing costs, ease of use, promotional effort, distribution intensity, perceived risk, compatibility with existing standards, and divisibility.

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Market segments may also be divided according to professions, lifestyles, or age groups.

 

Product Diffusion Curve

 

Consumers can be grouped according to how quickly they adopt a new product (or service). Some consumers adopt the product (or service) as soon as it becomes available; some are among the last to purchase a new product (or service).

 

Basics of Market Segmentation

 

The division of a market into different homogeneous groups of consumers is known as market segmentation.

 

Rather than offer the same marketing mix to vastly different customers, market segmentation makes it possible for organizations to tailor the mix for specific target markets, thus better satisfying customer needs.

 

A market segment should be

 

• Measurable;

• Accessible by communication and distribution channels;

• Different in its response to a marketing mix;

• Durable;

• Substantial enough to be profitable.

 

Various bases can segment a market, and industrial markets are segmented somewhat differently from consumer markets.

 

Consumer Market Segmentation

 

A basis for segmentation is a factor that varies among market groups but is consistent within groups. We can identify four primary bases on which to segment a consumer market:

 

• Geographic segmentation is based on regional variables (region, climate, population density, and population growth rate).

• Demographic segmentation is based on age, gender, ethnicity, education, occupation, income, and family status.

• Psychographic segmentation is based on variables such as attitude and lifestyle.

• Behavioral segmentation is based on variables such as price sensitivity or brand loyalty.

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The optimal bases for market segmenting depend on the particular situation and are determined by marketing research, market trends, and managerial judgment.

 

Business Market Segmentation

 

While many of the consumer market segmentation bases can be applied to organizations, the different nature of business markets often leads to segmentation on the following bases:

 

• Geographic segmentation (based on regional variables such as customer concentration, regional industrial growth, and macroeconomic factors).

• Customer type (based on factors such as the size of the organization, its industry, and the position of the value chain).

• Buyer behavior (based on factors such as supplier loyalty, usage patterns, and order size).

 

Profiling the Segments

 

Profiles summarize the identified market segments, often given a descriptive name. From these profiles, the attractiveness of each segment can be evaluated, and a target market segment can be selected.

Abraham ​Maslow was a twentieth-century social psychologist. His pyramid of basic needs is one of the most cited models in marketing:

 

• Self-fulfillment.

• Esteem needs.

• Social needs.

• Safety needs.

• Physiological needs.

 

Purchasing behavior

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Purchasing behavior or patterns refer to what a consumer buys and how they make their final purchasing decision. The first step is usually the awareness of the brand. The consumer forms purchase intentions - plans to buy things that they may or may not act on. Routine purchases of the same products on a repetitive basis have low levels of personal involvement. Significant investments or impulse purchasing have higher levels of personal involvement. Some consumers are very highly loyal to a brand or service and will always buy the same brand.

Customer loyalty

 

Customer loyalty is critical to business success and profitability. Loyal customers buy more, so it improves sales and profit margins. However, customers are becoming increasingly fickle or disloyal; they no longer hesitate to switch or change retailers or brands.

 

Loyalty programs

 

Managers implement loyalty programs, such as frequent flyer programs, to maximize customer loyalty and minimize customer decisions. A loyalty program aims to allow marketers to identify and retain, or keep, preferred customers, and reward them with discounts and special offers.

 

​Some essential management concepts

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The Trusted Leader

 

Trust is a vital ingredient in organizations since they represent a type of ongoing relationship. There are three categories of trust within a University:

 

• Strategic trust (trust in the university’s mission, strategy, and ability to succeed);

• Organizational trust (trust that the university's policies will be fairly administered and implemented as stated);

• Personal trust (trust that subordinates place in their manager to be fair and to look out for their interests).

 

Trust reduces unproductive rumors and second-guessing that distracts employees from their work. It motivates creativity, and helps the university to attract and retain great employees.

 

Modeling trust

 

There is an equation to model trust. Trustworthiness: (C + R + I) / S

 

Where:

 

- C = credibility;

- R = reliability;

- I = intimacy;

- S = self-orientation.

  

Building Personal Trust

 

There is a five-stage process to build personal trust:

 

• Engaging;

• Listening;

• Framing;

• Envisioning;

• Committing.

  

Building organizational trust

 

Organizational trust is based on the belief in how things are done in the university.

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There are five variables on which organizational trust depends.

 

Organizational trustworthiness = ((A1 + A2 + A3) x (A4 + A5)) / R

 

Where:

 

A1 = Aspirations;

A2 = Abilities;

A3= Actions;

A4= Alignment;

A5 = Articulation;

R = Resistance.

 

3-C Leadership Model

 

• Present a Challenge;

• Build Confidence;

• Provide Coaching.

  

Managing People

 

The effective management of people in an organization requires understanding motivation, job design, reward systems, and group influence.

 

Many concepts have their definitions, such as:

 

• Behavior Modification;

• Expectancy Theory (MF = E x I x V);

• Principal-Agent Problem;

• Promotion Tournaments;

• Job Design;

• Equity Theory;

• Reward Systems;

• Efficiency Wages;

• Rationalizing Behavior;

• Groupthink;

• Managing Individual and Group Performance.

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The 7 Habits of Highly Effective People

 

Habits consist of knowledge, skill, and desire. The Seven Habits move us through the following stages:

 

• Dependence: the paradigm under which are born, relying upon others to take care of us;

• Independence: the paradigm under which we can make our own decisions and take care of ourselves;

• Interdependence: the paradigm under which we cooperate to achieve something that cannot be achieved independently.

 

1. Be Proactive;

2. Begin with the End in Mind;

3. Put First Things First;

4. Think Win/Win;

5. Seek First to Understand, Then to Be Understood;

6. Synergize;

7. Sharpen the Saw.

 

Motivation management

 

What is motivation?

 

For most Universities, the staff is key to success, the most important tool for the organization's success, and they can be motivated to promote their services. Motivation engages staff and gets them interested in using events or incentives. It also aims to recognize and reward staff efforts by offering prizes or rewards for good performance. Other benefits of motivation marketing include:

 

• Increased job satisfaction: happier people at work.

• Improved productivity: more work done in less time.

• Improved performance: the work is done better.

• Encouraging behavior changes: introducing new work practices.

• Increased sales force effectiveness: to achieve higher sales figures.

• Improved service launches: boosted market penetration and gained market share more quickly.

 

Staff incentive schemes

 

Staff incentive schemes, also known as incentive programs, are formal schemes designed to encourage staff to act in a certain way and are used by a wide range of Universities to improve staff and distributor performance. Incentives such as prizes, rewards, or gifts can boost morale. Building staff loyalty will result in lower staff turnover or churn. Another benefit is reduced staff absenteeism, a reduction in the number of days when employees are not at work through sickness. Measuring staff reaction and getting feedback is essential to getting it right.

 

Incentives: travel and events

 

A university may choose to use cash substitutes or non-cash awards, such as travel incentives or sending staff on a short trip or holiday, to motivate staff. Big-ticket giveaways, such as cars or costly holidays, are significant sales incentives; they can motivate staff to sell more. Teams are usually motivated during the qualifying period for an award or prize. Nominations for awards can come from colleagues. Sometimes, a manager may nominate an employee, perhaps because of high sales figures. Events like parties, weekends away, games, and competitions can be very successful.

 

Customer Relationship Management

 

One-to-one

 

One-to-one, also known as Customer Relationship Management (CRM), is based on the idea of treating different customers differently. Organizations in all sectors are faced with a double problem of declining customer loyalty and shrinking profit margins. One-to-one marketing strategies enable an organization to create long-term, mutually beneficial relationships with customers. These result in greater customer loyalty and improved margins.

 

We call this process a learning relationship, and it has four basic implementation steps (IDIC):

 

• Identify our customers at all points of contact.

• Differentiate between our customers based on their individual needs and value to our organization.

• Interact with our customers in a two-way dialogue.

• Customize or tailor some aspects of our services based on what we learn from our customers.

 

CRM technology

 

CRM technology supports a CRM strategy by gathering, storing, and analyzing customer data. Front-office systems, such as call centers or loyalty cards, collect information directly from clients and store and process it in a back-office system called a database or data warehouse. Back-office systems allow an organization to follow sales and fulfill orders.

 

The department can use software tools to mine the data stored in the data warehouse. Data mining reveals patterns in customer behavior. Relationship marketers can then tailor or customize their marketing efforts toward the customer. With CRM technology, mass customization is possible. It means that each customer will receive slightly different offers and discounts.

 

Privacy

 

Consumer protection groups or watchdogs are concerned about the gathering and storing large quantities of customer information. An organization should protect its customers' privacy. Customers may wish to keep their data confidential. Most organizations have a privacy policy. They promise not to disclose customer data by revealing it to others or sharing customer records with other organizations. Organizations encrypt the information. It ensures that it is not available to people outside the organization, preventing accidental disclosure of information.

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