What Is Consumer-To-Consumer Marketing?

The consumer market is a market composed of all individuals and households that are purchased to meet their own needs. The organizational market refers to the market composed of all organizations that purchase for their own production, resale or sublease, or for organizational consumption. It mainly includes producer market, middleman market and government market. The producer market, also called the industrial market, refers to a market formed by an organization that purchases for the purpose of reproduction. The middleman market refers to the market formed by organizations that purchase for resale. The middleman market mainly includes wholesalers, retailers, agents and distributors. Government market refers to the market formed by government procurement.

Consumer market

The consumer market, also known as the final consumer market, consumer goods market, or lifestyle market, refers to the market in which individuals or families purchase or rent goods to meet their daily needs. The consumer market is the foundation of the market system and a decisive market. The consumer market is

The guiding principle of modern advertising management is consumer-centric. Advertising communicators must first understand the demand of advertising objects through the consumer market and grasp the demand laws of market products. The concept of market differentiation does not start from the product, but from the different needs of consumers. It is based on the needs of consumers and divides the overall consumer market into segments of many similar buying groups based on the differences in consumer buying behaviors, so that companies can select and determine target markets and implement effective marketing Strategy combinations to enhance the targeting of advertising goals and achieve the best publicity results with the least cost of advertising.

The consumer market is a very large and complex system. China's consumer market consists of more than a billion people, from babies who fall to the ground to old people who are sparse. They are members of the consumer market. They consume hundreds of billions of yuan in products and services every year. However, due to the influence of age, gender, education, income, occupation, interest, place of residence, environment and other factors, there are significant differences in the purchasing habits, motivations, methods and levels of various types of consumers, thus forming different types of Demand market, each market segment represents a meaningful buying group. Therefore, the sales department should break down the entire potential market into smaller parts as sales targets for specific products, and distinguish consumers with different purchasing needs and interests in order to target the target market and deliver advertising information to such consumers. . The main problem of market segmentation is to determine the object of product advertising, and then determine the advertising area and advertising medium. It is to divide the potential market into various types of consumers, classify consumers with certain characteristics, design specific market decision variables (products, prices, sales and retail channels), and Consumers classified as a category are their own market targets. Market differentiation should include: geographic, population, psychological, socio-cultural, and user behavior.

Geographical differentiation of consumer markets

According to factors such as geographical distribution, climatic conditions, population density, the market can be divided into various regions, such as rural markets, urban markets, southern markets, northern markets, etc. Consumers have different consumption due to different areas where they live Demand and purchase methods. For example, households in large cities have higher expenditures on household appliances, while rural households have a stronger desire to purchase agricultural production materials such as small farm tools and building materials. High-end clothing and jewelry are easier to sell in large cities than in smaller cities. In some areas, televisions are used. Due to the weak transmission power and the influence of factors such as high mountains, users have higher requirements for the sensitivity of televisions. In these regions, passing the advertising information of the TV with good receiving performance is far greater than advertising benefits such as audio and appearance. Climate differences are also an aspect of regional differences and can affect consumer behavior. For example, the demand for fur products in areas with a warm climate is not very urgent. On the other hand, most people in cold regions need to wear fur clothing. Similarly, the advertisement of ski shirts to the south and the sandalwood fan to the north can only be a futile move in the south. Even in the same area, the consumption habits of urban residents and suburban residents may be different.

Consumer market demographics

That is, the potential customers are classified according to human factors such as age, gender, family size, income status, occupation, education, religion, and ethnicity.

According to age standards, the market can be divided into the elderly market, the middle-aged market, the youth market, the children's market, etc .; the children's market can also be subdivided into the market for preschool children, preschool children, and the baby market. Because consumers of different ages have differences in economic income, lifestyle and purchasing habits, the demand for goods also shows different conditions.

(1) Children's market: Due to the stability of life and the popularization of family planning, parents take great care of children, and they need to pay more and more attention to quality and decoration. Children s buying behavior is mostly determined by their parents, so this type of advertising still needs to target parents. For example, the "pencil sharpener", in addition to being designed to meet the children's psychological needs of "color, movement, and fun" as much as possible, can also be written in the advertisements "ideal tools for children to learn, save time, effort and safety", which caters to Psychology of parents.

(2) Young people's market: young people have more employment, less family burdens, and have relatively strong purchasing power; they also have a certain culture, active thinking, like imitation, imagination, and "emotional", and especially need fashionable, beautiful, and novel The product. As a result, novelty, emotional, and appealing ads can easily work.

(3) Middle-aged people market: Middle-aged people are characterized by cautious shopping and rational colors. Such advertisements must be artistic, and the characteristics of the products must be detailed. At the same time, because most wives are in charge of family finances, this type of advertisement also needs to bring some characteristics that women like. For example, the advertisement of "electric shaver" writes "comfortable, beautiful, dexterous, and beauty", which "conveniently" buys the middle-aged man.

(4) Elderly market: The elderly need comfortable, solemn and practical consumer goods. They believe in old brands and old store numbers, and they are more discerning in shopping. They are more concerned about how to maintain their bodies, are willing to invest in health and longevity, and have higher requirements for supplements and various consumer products for health. Therefore, to do this type of advertising, it is necessary to highlight the brand and product name, and it is best to have symbols such as auspiciousness, happiness, and longevity in the design.

Gender is also an important variable in market differentiation. The users of cosmetics and hair dyes are mainly women, while men are the main users of cigarettes and shavers. The level of income is also a variable on which market differentiation is based. High-income families have ample economy, are more interested in fashionable, fashionable and fashionable products, and have the pursuit and enjoyment of beauty. Those with low income levels pay attention to the durability, convenience or multi-use of goods, but also strive to catch up with modern consumption. Education level is also an important variable. More educated people have higher demand for books and magazines than less educated people. These factors or variables all require different sales strategies. In addition, ethnicity, occupation, etc. are also the variables on which market differentiation is based.

Consumer market psychology

Advertising is to persuade consumers through the audio-visual presentation. Therefore, in order to enhance the effectiveness of advertising, it is necessary to make advertising consistent with people's psychological activities. In fact, due to the psychological differences of each person's personality, feelings, and purchase motivation, they also have certain differences in product selection and attitudes toward advertising, so people with the same demographic characteristics may show completely different consuming behavior. For example, two young workers of the same age have similar wage incomes, but their consumption behavior will also be very different due to their different lifestyles. One might be arrogant and spend money casually, while the other could be very budget-conscious and very economical. Although two people are similar in terms of demographics, it is inappropriate to classify them as the same consumer.

Consumers' personality and self-image are also useful basis for market differentiation. Consumers with different personalities often need to buy products that are suitable for their personal characteristics. This means that the design and manufacturing of products should also have different "personalities" in order to meet the needs of consumers with different personalities. Such as the production of bicycles should have different models, rural areas need to increase the weight of the car, young girls in the city like beautiful light vehicles. Psychological purchase motivation is often satisfied from the social and psychological functions of the product. Therefore, advertising should psychologically give potential buyers the most attractive influence to attract consumers to buy.

Consumer market culture

Various variables studied in sociology and cultural anthropology also provide the basis for market differentiation. For example, social strata, reference groups, customs, and different stages of the family life cycle are all important criteria for differentiating markets.

Social class is a composite index composed of several demographic variables, such as education, income, position, and place of residence. Among them, the amount of income and education are often important factors that determine the social class.

Consumer behavior is often influenced by reference groups. The so-called reference group refers to the group that people yearn for. Sometimes, although people are members of one group, they yearn to become members of another group, and their behavior is based on the norms of another group. For example, fans see their favorite team as a reference group. Foreign salesmen at any cost hire famous players to wear the sportswear or sneakers they sell as an important means of soliciting customers. This is the use of reference groups to influence people.

The business sector also uses different stages of the family life cycle to segment the market. For example, newlyweds are often interested in interior decoration and furnishings; after having children, their interest will turn to various supplies for raising babies; when their children enter school, they will be interested in children's cultural and educational supplies; finally When children grow up, they will consider how to build a family for their children and spend their old age. This shows that people's consumption behavior will be different at different stages of the family life cycle. Therefore, this type of advertising should avoid simplification and similarity, and must start from different levels of consumers and use their favorite language and tone to create.

Consumer market behavior differentiation

Some commodity markets can be differentiated according to the number or number of times the buyer uses the product, and consumers can be divided into low, medium, high, and non-used consumers. Depending on the usage rate, different sales strategies can be adopted. For example, to promote tea, advertising can be targeted at people who often drink tea. This emphasizes that the tea is of good quality and cheap. If it's targeted at people who don't drink tea often, emphasize the health benefits of tea. If the promotion is for people who never drink tea, try to change people's habits. Some studies have shown that a small number of consumers with a large amount may occupy the main sales volume of a certain product. Therefore, many companies naturally treat regular users as their main advertising target. The reputation of a trademark is important to the sale of a product. Consumers can be classified according to how much they trust the trademark. Some people have a lot of confidence in a certain brand of product and often buy products with this trademark; while others may not care about any branded product when they shop. This requires that the promotion of the trademark be prominent in the advertisement and improve the popularity of the trademark.

Consumer market segmentation basis

As mentioned earlier, the reason why the overall market for a product can be subdivided is because of differences in consumer or user needs. There are many variables that cause differences in consumer demand. In practice, companies generally use related variables to segment the market instead of using a single variable. It can be summarized as follows:

1. Segment markets by geographic variables

Segment the market according to the geographic location and natural environment of the consumer, for example, divide the overall market into different small markets based on differences in countries, regions, city sizes, climate, population density, and topography. Geographic variables serve as the basis for market segmentation because consumers in different geographic environments often have different needs and preferences for the same type of products, and they will respond differently to the marketing strategies and measures adopted by enterprises. For example, in some provinces along the southern coast of China, certain seafood is considered superior cuisine, while many consumers in the Mainland find it tastes ordinary. As another example, due to the difference in living environment, urban residents and rural consumers have very different needs for interior decoration products. Geographical variables are easy to identify and are important factors to be considered in market segments, but consumer demand in the same geographical location will still vary greatly. For example, in some big cities in China, such as Beijing and Shanghai, where the floating population is more than one million, these floating populations themselves constitute a large market. Obviously, this market has many different characteristics from the needs of the permanent population market. Therefore, simply distinguishing the market by a certain geographical feature may not necessarily truly reflect the commonalities and differences in consumer demand. When selecting a target market, an enterprise must also consider other subdivision variables in a comprehensive manner.

2. Segment the market by demographic variable

Segment the market by demographic variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, nationality, etc. Consumer demand and preference are closely related to demographic variables. For example, only consumers with high income levels can become regular buyers of high-end clothing, expensive cosmetics, and high-end jewelry. Demographic variables are relatively easy to measure, and relevant data is relatively easy to obtain, which constitutes an important reason why companies often use it as a basis for market segmentation.

1) Gender

Due to physical differences, men and women have very different product needs and preferences, such as differences in clothing, hairstyles, and necessities. Some automakers in the United States have been designing cars to cater to the requirements of men. As more and more women work and own cars, these automakers are studying market opportunities and designing features that appeal to female consumers car.

2) age

Consumers of different ages have different demand characteristics, such as the demand of young people for clothing, and the demand of the elderly is quite different. Young people need bright, fashionable clothes, and the elderly need modest and elegant clothes.

3) income

High-income consumers and low-income consumers will be different in terms of product choice, leisure time arrangements, social communication and interaction. For example, when travelling abroad, high-income earners and low-income earners will be very different in their choice of transportation and accommodation. Because income is a direct and important factor that causes demand differences, it is quite common to segment markets according to income in fields such as clothing, cosmetics, and tourism services. 4) Vocational and Education

Refers to segmenting the market by consumer occupation, education, and demand. For example, farmers buy bicycles with preference for heavy-duty bicycles, while students and teachers prefer light-weight and beautiful bicycles. The person will have different preferences for the variety and color of room decoration products.

5) family life cycle

A family can be divided into seven stages according to age, marriage and child status. At different stages, the purchasing power of households and the interest and preferences of household personnel on goods will vary greatly. Single phase: young, single, with almost no financial burden, a leader in new consumption concepts, and entertainment-oriented purchases. Newlywed stage: young couples, no children, economic conditions are better than the near future. Strong purchasing power, strong desire and demand for durable goods and large goods. Full nest stage: young couples, children under 6 years old, the peak period of household goods purchase. Not satisfying the current economic situation, pay attention to saving, buy more children's products. Full nest stage: young couples with minor children over 6 years old. The economic situation is better. Purchasing tends to be sane, and is relatively less affected by advertising and other marketing stimuli. Pay attention to higher-grade products and children's education investment. Full nest stage: Older couples live with adult children who are not yet independent. The financial situation is still good, and either the wife or children have jobs. Pay attention to saving, purchase calmly and rationally. Empty nest stage: older couples, children separated from home. Earlier income is higher. The purchasing power reached its peak, and more were purchased for the elderly, such as health care products. Entertainment and service spending increased. Late retirement income is reduced. Lonely stage: Single elderly people live alone and their incomes have dropped sharply. Special attention is paid to the needs of emotion, attention, and security. In addition to the above, demographic variables often used in market segmentation include family size, nationality, ethnicity, religion, etc. In fact, most companies usually use two or more demographic variables to segment the market.

3. Segment the market by psychological variables

Segmenting the market according to the psychological factors such as the social class, lifestyle, and personality characteristics of the buyer is called psychological segmentation.

1) Social class

Social stratum refers to groups that are relatively homogeneous and persistent in a society. Members at the same level have similar values, hobbies and behaviors, while members of different levels have large differences in the above aspects. Obviously, identifying different characteristics of consumers in different social classes will provide an important basis for market segmentation of many products.

2) Lifestyle

In layman's terms, lifestyle refers to how a person lives. People pursue different lifestyles, such as the pursuit of trendy fashion, some of the pursuit of tranquility, simplicity; some of the pursuit of stimulation, adventure, and some of the pursuit of stability and comfort. Some western clothing manufacturers design different clothing for "simple women", "fashionable women" and "manly women"; tobacco companies target "challenging smokers", "easy smokers" and "Prudent smokers" launched different brands of cigarettes, all based on lifestyle segments.

3) Personality

Personality refers to a person's relatively stable psychological tendency and psychological characteristics, which will cause a person to make a relatively consistent and continuous response to his environment. As the saying goes: "People have different hearts and have different faces." Each person's personality will be different. Usually, personality is manifested through personality traits such as self-confidence, autonomy, dominance, obedience, conservativeness, and adaptation. Therefore, personality can be classified according to these personality characteristics, so as to provide a basis for business segmentation. In western countries, for products such as cosmetics, cigarettes, beer, and insurance, some companies have segmented the market on the basis of individual characteristics and have achieved success.

4. Segment the market by behavioral variables

Dividing buyers into different groups according to their understanding of the product, attitude, usage, and response, is called behavioral segmentation. Many people believe that behavioral variables can more directly reflect the differences in consumer demand, and thus become the best starting point for market segmentation. Market segmentation by behavioral variables includes:

1) timing of purchase

Consumers are divided into different groups based on the timing of their needs, purchases and use of products. For example, city bus transportation companies can divide different market segments and formulate different marketing strategies based on the characteristics of passenger demand during peak and non-peak hours; companies that produce refreshing summer drinks such as Guozhen can Different tastes of Guozhen beverages throughout the year divide consumers in the Guozhen market into different submarkets.

2) Pursuing benefits

Consumers always buy a product to solve a certain problem and meet a certain need. However, the benefits provided by products are often not single, but multifaceted. Consumers' pursuit of these benefits is sometimes focused, such as the pursuit of economical and inexpensive purchase of watches, some of the pursuit of durability and reliability and ease of use and maintenance, while others are biased towards the use of social status foot.

3) user status

Segment the market based on whether the customer is using it or not. It can usually be divided into: frequent buyers; first-time buyers; potential buyers; non-purchasers. Large companies tend to focus on turning potential users into actual users, while smaller companies focus on maintaining existing users and trying to attract customers who use competing products to use our products.

4) Use quantity

Segment the market based on the number of consumers using a product. Can be divided into a large number of users, moderate users and light users. The number of large users may not be large, but their consumption accounts for a large proportion of the total consumption. A company in the United States found that 80% of American beer was consumed by 50% of customers, and the other half consumed only 12% of the total consumption. Therefore, beer companies would rather attract heavy beer drinkers than give up light beer drinkers and target heavy beer drinkers as the target market. The company further learned that a large number of beer drinkers are mostly workers, aged between 25 and 50 years old, like to watch sports programs and watch TV for no less than 3--5 hours a day. Obviously, based on this information, companies can greatly improve their strategies in terms of pricing, advertising, etc.

5) Brand loyalty

Companies can also segment the market based on consumer loyalty to the product. Some consumers change brands often, while others focus on one or a few brands over a longer period. By understanding consumer brand loyalty and the various behavioral and psychological characteristics of brand loyalty and brand converters, not only can it provide a foundation for business segmentation, but also help companies understand why some consumers are loyal to their business products, and Other consumers are loyal to the products of competing companies, which provides inspiration for companies to choose their target markets.

6) Preparation stage for purchase

Consumers' knowledge of various products often varies from person to person. Some consumers may have a need for a product, but they do not know the existence of the product; while some consumers already know the existence of the product, they still have doubts about the value and stability of the product; others Or they may be considering buying. For consumer groups at different purchase stages, companies segment the market and use different marketing strategies.

7) attitude

Enterprises can also segment the market based on the customer's enthusiasm for the product in the market. Different consumers may have very different attitudes toward the same product. Some people like to be positive, some are negative, and others are indifferent, neither positive nor negative. Market segmentation for consumer groups with different attitudes should be different in terms of advertising and promotion.

(II) Basis for producer market segmentation

Many of the criteria used to segment consumer markets can also be used to segment producer markets. Such as subdividing according to variables such as geography, interests pursued and utilization rate. However, because producers and consumers have different purchasing motivations and behaviors, in addition to using the aforementioned consumer market segmentation criteria, some new criteria can be used to segment the producer market.

1. User scale

In the producer market, some users buy a lot, while others buy very little. Take the steel market as an example. Construction companies, shipbuilding companies, and automobile manufacturing companies have a large demand for steel. They purchase tens of thousands of tons, and some small machining companies buy only a few tons or a year Ten tons. Enterprises should segment the market according to the size of users, and according to the size of users or customers, their marketing mix plans should also be different. For example, for large customers, it is better to contact directly, supply directly, and give more discounts in terms of price and credit; for many small customers, it is appropriate to let the product enter the commercial channel and the wholesaler or retailer to organize the supply .

2. End use of the product

Different end uses of products are also one of the criteria for industrial market segmentation. Industrial products users generally purchase products for reprocessing, and usually have specific requirements for the products they purchase. For example, the same steel users, some need round steel, some need strip steel; some need ordinary steel, and some need silicon steel, tungsten steel or other special steel. At this time, the company can group users with substantially the same requirements according to user requirements, and design different combinations of marketing strategies accordingly.

3. Industrial purchasing status

Market segmentation based on industrial purchases. The main ways for industrialists to purchase, as previously mentioned, include direct repurchase, revised repurchase, and new mission purchases. Different purchasing methods have different purchasing degrees and decision-making processes, so the overall market can be subdivided into different small market groups.

Consumer market market comparison

Organizational market vs. consumer market

Fewer buyers: Generally speaking, organization marketers face fewer customers than consumer goods marketers have customers. Large purchases: Many organizational markets are characterized by high purchase ratios.

Fluctuations in demand: Demand for business supplies and services is more variable than demand for consumer goods and services, especially for new factories and new equipment. Professional Procurement: Procurement of business is performed by specially trained procurement agents who must comply with the organization's procurement policies, structure and requirements. Many people influence purchases: There are many more people who influence decision-making in business purchases than consumers. Direct procurement: Business buyers often buy products directly from manufacturers, rather than going through middlemen, especially for technically complex and expensive projects (such as mainframe computers or aircraft). Mutual purchase: Business buyers often choose suppliers who also buy from them. Leasing: Many business buyers are increasingly turning to equipment leases to replace direct purchases.

Comparison of consumer market and buying behavior

The final market served by socio-economic activities, the study of the consumer market is the basis for the study of the entire market. This chapter mainly discusses consumer market issues, including the concepts and characteristics of consumer markets and purchasing behaviors, the main factors affecting consumer purchasing behaviors, and consumer purchasing decision-making processes.

I. Concepts and characteristics of consumer markets and buying behavior

(I) Concept

The consumer market is made up of all individuals and households who purchase goods to meet consumer needs. Consumer purchase behavior refers to a series of conscious activities performed by consumers throughout the purchase process. This purchase process starts from causing needs, and forms the purchase motivation, evaluation choices, and decision-making to evaluation behavior after purchase.

(Two) characteristics

Compared with other types of markets and purchasing behaviors, consumer markets and purchasing behaviors have the following main characteristics:

1. The consumer market is not an intermediate market but a final market

The goods purchased by consumers usually enter the consumption process directly, and they are generally not returned to the circulation field. These goods will have a direct impact on the basic life, physical and mental health of consumers and their families. Therefore, governments of various countries generally formulate more Strict laws protect consumer rights.

2. Consumer purchases are mostly small purchases

The consumer market uses individuals or households as the basic unit for purchase and consumption. Due to the constraints of the number of units, demand, purchasing capacity, storage conditions, and product expiration dates, consumers generally purchase smaller batches and batches. Many, especially the purchase of consumer goods in daily life is more frequent and random.

3 Diversity and variability in consumer demand and purchasing behavior

There are a large number of consumers. Due to the influence of consumer characteristics and other factors, different consumers often have different needs, desires, interests, hobbies and habits, so they will have a variety of requirements for different products or the same product. , Buying behavior is different. In addition, with the social and economic development, the improvement of consumption levels, the renewal of consumption concepts and the interactive impact of consumer life, consumer demand has not only been continuously expanded in volume, but its structure has also been continuously changed.

4 Consumer demand and purchasing behavior are largely inducible

Consumers have greater selectivity and flexibility in what goods they buy, when, where, how, etc., and are easily affected by corporate marketing activities and other external environmental factors. Reasons for this situation:

(1) There are many colors, varieties, and brands of consumer products, and different quality and performance. Consumers generally have difficulty in grasping various product knowledge and sufficient market information. They belong to non-experts. Therefore, they often need sellers' propaganda, Introduction and help.

(2) Many consumer products have strong alternatives and strong demand, and consumers' requirements for product specifications and quality are not as strict as those in other types of markets.

(3) Consumers generally make purchase decisions spontaneously and decentrally, so unlike purchasers in other types of markets, purchase decisions and purchase behaviors are greatly affected by organizational and other factors, and they are more rigid.

Second, the model of consumer buying behavior

Marketing studies the consumer market. The core content is the study of consumer buying behavior. Consumer purchasing behavior is developed under the direct influence of consumer characteristics (including psychological characteristics, personal characteristics, socio-cultural characteristics, etc.), and also affected by a series of external environmental factors, especially in corporate marketing activities. Great influence. Consumers' purchase behavior is actually the result of the interaction and interaction of these intricate internal and external factors. Therefore, when studying consumer purchasing behavior, we must pay attention to understanding the various factors that govern and influence consumer purchasing behavior, and analyze these factors with the various activities of consumers in the purchase process to analyze what they are buying. (Needs), why to buy (purchase purpose), who will buy (purchasing organization), how to buy (purchase method and purchase requirements), when to buy (purchase timing), where to buy (purchase location), and other basic questions ( That is, the "five WH" problem), which is the basis for enterprises to carry out targeted marketing activities and obtain advantages in competition that meets market needs.

The model of consumer buying behavior is actually a model used to describe the relationship between consumers' external stimuli and consumer response

It can be seen from the figure that all external stimuli pass through the buyer's black box and produce a series of observable buyer responses. The external stimulus of the buyer can be regarded as an input, which involves two basic aspects: one is the marketing stimulus arranged by the industrial and commercial enterprises, and the other is the stimulus of other environmental factors. Buyer response can be viewed as an output. The buyer's black box is an intermediate link between input and output. It is an information processing center. It includes two parts: one is the characteristics of the buyer. It determines how the buyer understands the needs, purchase problems, and external stimuli. Affects how buyers respond to external stimuli; the second is the buyer's purchasing decision process, which directly leads to the buyer's final choice. This model further shows that what is important for companies to study is consumer characteristics and consumer decision-making processes.

It should be pointed out that some of the consumer characteristics that dominate and influence consumer purchasing behavior are difficult for companies to control and exert influence, such as consumers' age, gender, occupation, personality, economic status, lifestyle, ethnicity, etc., but Understanding these factors can provide companies with the necessary clues for market segmentation and selection of target markets, and help companies to adopt adaptive construction measures; some consumer characteristics are susceptible to corporate marketing activities, such as consumer purchase motivation , Awareness, learning beliefs, etc. Based on understanding these factors, companies can formulate corresponding marketing strategies in order to induce consumers' purchasing behavior to a certain extent.

Consumer market segmentation criteria

Market segmentation research model

For the same type of market research problems, the use of relevant models for research and analysis will minimize the researchers' individual errors. The continuous integration of these models with customer-specific issues, and the continual addition of corrections, are at the core of CRC research and development.

"Market segmentation is one of the most attractive areas in market research. It is not only a scientific work using many mathematical analysis methods, but also an artistic creation that requires researchers to use their imagination and insight."

1. Why use market segmentation?

China, with a population of nearly 1.3 billion people, is the most promising market in the world, but the vast majority of companies active today recognize that it is impossible for them to gain access to the entire market or at least not to attract all buyers in the same way. . Because on the one hand, there are too many, too scattered buyers, and their needs are very different; on the other hand, companies also have huge differences in their ability to meet different markets. Therefore, every business must find the market segment that it can best satisfy.

What is market segmentation?

Market segmentation: segment the market into groups of buyers with different needs, personalities, or behaviors. In market research, cluster analysis and CHAID are used to define different market segments. Inherent differences are minimized, maximizing differences between different market segments. For market decision makers, the purpose of market segmentation is to adopt a unique product or marketing mix strategy for each buyer group in order to obtain the best returns.

CRC believes that the marketing plan with the largest target customer group may not be the optimal allocation of market resources. For most products or services, there is a target market, which has more revenue potential than other general markets.

The purpose of market segmentation research is to find and describe your target market for customers, and determine the best marketing strategy for the target market.

Experience has proven that CRC's market segmentation research can effectively improve the ability of market decision makers to deal with complex environments:

Make marketing easier. The needs of a group of consumers will be easier to define, especially when they have many common characteristics (for example, seeking the same benefits, having the same age, gender, etc.).

Determine the appropriate location. Identify markets that are using services and markets that are not using services. Using the "targeted marketing" segmentation method, a new company or product targets less competitive buyers, while also helping mature products find new buyers.

Improve the use of marketing resources. Designing product, price, promotion and distribution best strategies for market segments can make more effective use of market resources.

When to use market segmentation

If you face the following problems:

Have a clear concept or product, but it's unclear who is most likely to buy ...

Product positioning is already very clear, but I do nt know that the combination of promotion and promotion can attract the target customers ...

Different consumers have different preferences for products, and you want to know which preferences you can satisfy ...

Sales seem to have not changed, but you already feel that the composition of your customer base is changing, and you want more details about the changes ...

You are ready to break into a competitor s firm occupation, hoping to get a small base first ...

You dominate the market, but competitors are eating into your territory ...

Despite your good products, market data shows major setbacks to marketing plans ...

As a new market decision maker, you need to review your company's marketing plan. Market segmentation is the first step ...

The CRC market segmentation research model based on the practical experience and advanced analysis methods of multiple projects can give you a complete answer.

CRC Market Segmentation Case Study

In the late 1990s, China's mobile phone market began to explode. Although the market position of the three international brands is difficult to shake, many local brands are eager to try. After all, the lure of profits brought by the fast-growing market space is huge. As a well-known local telecommunications equipment supplier, the question facing our customers is, for mobile phone products, can consumers accept domestic brands? Where is the obstacle? Which consumers are most acceptable? What kind of marketing mix should be used to attack them, during which customers are most concerned about how the price strategy and promotion strategy should be designed. Based on the CRC market segmentation research model, researchers provide customers with a complete segmentation plan and targeted marketing strategies. The definition of the target customer group in the survey conclusions is highly consistent with the results of market test sales conducted by customers in the same period.

Third, CRC market segmentation research steps

The basic concept of market segmentation is to establish a certain relationship between basic variables (such as the gender and age of consumers) and behavioral variables (such as the purchase rate of products) through statistical methods. Therefore, the selection of the basic variables and the method of establishing the relationship between the variables have become the key to the success of the segmentation research.

Step 1 : Understand the basics

As a costly market research project, CRC needs to discuss the following issues with customers before starting to better project design.

How deeply are consumers involved in a product or service?

How well do consumers know about this product, service or industry? To what extent are they willing and able to discuss?

Is this a new product or an existing product?

What is the purpose of market segmentation research? Is it to increase the loyalty of existing customers to the product, attract new customers, or attract customers from competitors?

Does market segmentation research serve short-term planning or long-term strategy?

What do company managers and sellers think of the existing market structure?

Step 2 : Determine the underlying variables

This is the most important step in the market segmentation process. According to the CRC's research experience on the mainland market, when segmenting Chinese consumers, some variables that are different from Europe and the United States are particularly worthy of attention, such as "economic development level" in geographical factors, and "unit nature" in population factors. These variables have a great impact on the behavior and expectations of Chinese consumers. At the same time, when segmenting different products, it is necessary to reconstruct the segmentation variable indicators based on "CRC consumer market segmentation indicators" based on their characteristics and in combination with previous market research experience. Usually, about 20 basic and behavioral variables are selected.

CRC consumer market segmentation indicator

Criteria for the classification

I. Geographical factors

Northeast, North, East, Central, South, Northwest, Southwest

Provinces and cities Beijing, Shanghai, Guangzhou, Wuhan, Chengdu, Xi'an, ...

Urban scale Extra large, large, medium, small cities, rural

Attributes South, North

climate

Degree of economic development Eastern region, Central region, Western region

Demographic factors

Under 6 years old, 6-11, 12-19, 20-34, 35-49, 50-64, 65 years and over

Gender: Male Female

Family life cycle youth, single; youth, married, childless, youth, married, youngest child under 6 years old;

Youth, married, youngest child 6 years and over; middle-aged, married, living with children; middle-aged, married,

Children do not live with them; middle-aged, single; others

Family income below 800 yuan; 800-1500 yuan; 1501-2500 yuan; 2501-4000 yuan; 4001-6,000 yuan;

6001 yuan or more

Professional professional and technical personnel, managers, general staff, students, ...

Education level: elementary school and below, junior high school, high school, secondary school, college, university and above

Media exposure TV, radio, internet, newspapers, magazines

Psychological factors

Social class bottom down, bottom up, middle middle, middle top, top and bottom, top up

Simple lifestyle, stylish, luxurious, ...

Passive, communicative, command, ...

Fourth, behavioral factors

Usage rate Never used, occasionally used, often used [see consumption breakdown chart of consumer goods]

Pursuing the benefits of quality, service, and economy [See the table below: Interest segmentation of the toothpaste market]

User status: Never used, used before, may be used, first use, frequently used

Brand loyalty None, average, strong, very strong

Passionate, positive, caring, indifferent, negative, and hostile to the product

Unprepared, unknown, interested, ready to buy

Breakdown of daily consumer product usage

Segmentation of interests in the toothpaste market

Brands of Interest Segmentation Demographic Behavior Psychological Preference

Economy (low price) A large number of men are highly autonomous and focus on value A

Medical (anti-surgery) Large number of users in conservative family

Make-up (white teeth) Teenagers, young people, and adult smokers are highly communicative and active C

Taste (good smell) Children's spearmint scent likes high self-intervention D

Step 3 : Collecting data

The market segmentation research has higher requirements for the sample size, and the successful sample for multi-city research should be above 1000.

In general, market segmentation research needs to be able to infer the overall consumer, so it is more common to use face-to-face interviews with better randomness. If the target market is the purchaser of a specific product, targeted interception can also be used. Because the market segment questionnaires are generally longer, the interview time is more than 30-50 minutes, and more personal information of the interviewees is involved, so it is more difficult to conduct telephone interviews.

Step 4 : Analyze the data

According to the research experience of CRC, the factor analysis is first used to test the data, and the highly relevant variables are eliminated. Then use cluster analysis, CHAID analysis and other tools.

CHAID analysis is a sensitive and intuitive method of segmentation. It breaks down respondents into groups based on the relationship between the underlying and dependent variables, and then groups each into groups. The dependent variable is usually some key indicators, such as level of use, purchase intention, etc. Each time the program runs, a tree diagram is displayed: at the top is a collection of all respondents, and below is a subset of 2 or more branches. Unlike cluster analysis, CHAID classification is based on the classification of a dependent variable, while cluster analysis is a classification based on 10 or even 100 variables.

The cluster analysis method is an ideal multivariate statistical technique, which mainly includes hierarchical clustering method and iterative clustering method. The process is exactly the process of market segmentation: group respondents in a way that minimizes the differences between individuals within a group and maximizes the differences between individuals in different groups. It should be noted that the segmentation schemes generated by different clustering methods will be very different. If several clustering analyses yield almost the same results, then it should be said that this subdivision is very close to reality. The following figure is used to represent the results of cluster analysis.

It should be pointed out that whether it is CHAID or cluster analysis, there will be multiple results due to different analysis factors. This is exactly the challenge and attractiveness of market segmentation research. It does not produce yes and no answers. It only provides researchers with landscapes with different perspectives. Therefore, this choice is science and art.

Step 5 : Analyze other data to build market segments

Once a segmentation plan is identified that represents the real market, the next step is to obtain additional information about the segmentation and gain further insight into it. By comparing and contrasting segmentation variables, for example: a segmented market based on demand, what are the demographic characteristics of these segments? How do they view the other attributes listed on the questionnaire?

Often this step can help identify the market segment, but sometimes, at this step you find the opposite. At this time, you need to go back to the fourth step and redefine the subdivision scheme.

Step 6 : Naming market segments

The name should be meaningful, accurate, and memorable, and match well with the people in the market segment. For example, in a study of the cultural and entertainment market, six market segments were divided: passive family life center; active sports enthusiasts; stubborn self-satisfiers; cultural activists; Family-centered people; social activists. Researchers have found that cultural activists are the best target for ordering tickets for theater and symphony shows.

Step 7 : Briefly describe the market segment structure

A simple and clear summary of each market segment is necessary, and generally includes the following:

Market segment name

Important factors that differentiate market segments

Brief description of the group in the market segment

Target market segmentation and use relevant information obtained through marketing 4P (product, price, channel and promotion)

Step 8 : Identify the market segments you want to enter

The experience behind the data is indispensable when you need to clearly identify the market segments you want to enter. The following principles need to be considered when assessing the attractiveness of different market segments:

big enough. The market segment must be large enough to be profitable.

Recognizable. Market segments must be identifiable using demographic factors.

Reachable. The market segment must be accessible to the media.

difference. Different market segments should respond differently to the marketing mix.

stability. In terms of size, each market segment should be relatively stable.

Growth. Good market segments should have growth potential.

Blank spot. If a market segment is firmly occupied by competitors, its attractiveness will be greatly reduced.