BENEFIT SEGMENTATION AND ROLE OF MOTIVATIONAL FACTORS IN CONSUMER BEHAVIOR1. Benefit segmentation of soft drink consumers. 2. Studying the role of fragrance and pleasure as motivational factors in consumer behavior.

What are benefits

Benefits are the sum of product advantages or satisfactions that meet a customer's needs or wants. They extend beyond product features and serve to satisfy physical, emotional, or psychological needs. A clear example of what a benefit is are often cited in personal sales training: "Sell the sizzle, not the steak"

Benefit based market segmentation

Benefit-based market segmentation involves segmenting the market for a product based on the intrinsic value that customers derive from the product. This intrinsic value (benefit) could take various forms such as snob appeal, perceived quality, or derived economy. Benefit segmentation probes deeply into users' buying motives.

Certain features of benefit based segmentation

A compilation of key benefits is analyzed in determining pertinent

market segments. A primary benefit or a summation of benefits is often featured and used for segment identification purposes, for example, the value seekers. Applications have extended to soft goods, hard goods, and service

companies, and even to the political arena and sociological studies.

y Generally, a product will have one primary usage. However, through

effective research, other potentially profitable benefit segments may be revealed. In many cases, the composition of benefit segments can differ markedly from geo demographic classifications alone.y Values and past purchase behavior can have a great impact on benefits

sought by buyers. According to the confirmation-disconfirmation paradigm, a positive experience means that the customer will seek repeat satisfaction; a negative experience leads to avoidance. Many companies are now cultivating the long-term, benefit-seeking customer.

marketing strategies can be tailored to the needs of specific customer

sectors. Hence, customer action (interest, inquiries, and orders) and post sale satisfaction are more likely to result through this approach than through unfocused marketing initiatives.

Advantages of benefit segmentation

y Widespread application y Flexibility y Causal basis:

Limitations of benefit segmentation

Complex data collection and analysis (large number of data inputs,

probabilistic sampling, multivariate statistical analyses). Cost factors (on the higher end of the pricing scale for segmentation

studies). An additional limitation of concern to marketers is human behavior.

Although individuals may say they want specific, rational benefits from products, they sometimes do not act as they indicate and deviate from their stated purchasing intentions.

(as proposed originally by Haleywho introduced the concept)

Methodologyy List several major benefits that customers are likely to seek in

choosing your firm's goods or services (record these benefits in Table A).y Show this list to a prospective customer and ask the respondent if

there are any additional benefits important to him or her in selecting your firm's products. Add these new benefits to Table A and record all of them in Table B.

y Ask this respondent to rate the benefits numerically in Table B using

the following importance scale: Most important benefit = 4 Second most important benefit = 3 Third most important benefit = 2 Fourth most important benefit = 1 All other benefits = 0y Collect similar marketing data from a sample of other respondents

using the same procedure. Add in new benefits and continue recording these data in Table B.

y After all data have been collected, note respondents with similar

response patterns (numerical highs and lows). These respondents are members of specific market segments.y List key benefits by segment on the segmentation grid (Table C).

Using your keen judgment, complete the segment description given the attributes provided. (Note: Typically marketing research findings assist us in this process.) When the segment column is completed, provide a name representative of the overall market characteristics for the segment. Continue with this approach for the other market segments.

Modern Method Using the Cluster Analysis

Benefit segmentation for soft drinks

Research methodologyy A descriptive research design, involving large samples was used for the

study. Prior to that, a pilot study of 30 consumers was conducted to identify the possible reasons for consumption.

On the basis of this and informal discussions with several regular consumers an inventory of 15 possible reasons (perceived benefits) was prepared. As the study was based on a survey of consumers, a structured questionnaire was used as research instrument. The Likert scale on three point scale was administered. The points on the scale were labeled as, 1 (dont agree), 2 (agree to some extent), and 3 (fully agree).

Input Data

The sample size is 120.However 22 questionnaires have to be

discarded since they were incomplete. The reduced sample size is 98, so 98 complete questionnaires were obtained.

Output and Interpretation

y The output is derived first by doing a hierarchical cluster analysis to

find the number of clusters that exist in the data. These outputs are in table 1, 2, and 3(agglomeration schedule, vertical icicle plot, dendrogram using average linkage, respectively)y The second stage is k means output with predetermined number of

clusters to be specified. In this case the output is 6 clusters. We will look at both stage 1 and stage 2 outputs to understand the interpretation of both stages.

STAGE ONEA look at the table 1 that is agglomeration schedule helps us to identify large differences in the coefficient of the 4th column. We see that there is a difference of (13.772-13.115) in the coefficients between the 1- cluster solution stage (stage 97) and 2 cluster solution stage (stage 96).this is a difference of .657.the next difference is .263 between stage 96 and stage 95. Ignoring the first difference of .657which would indicate one cluster in the data we look at the next large differences. (.500) is the difference between row 6 and row 7 indicating a 6 cluster solution.

We also look at the dendrogram for information as to which cases link up in what sequence to form clusters. The case membership of each cluster is clear from the dendrogram. For instance ,for a 6 cluster solution, from the dendrogram cluster 1 would consist of 7,54,2,3,4,5,47,18,43,80,87,29,41,6,8,70,26,16,78,11,12,38,21,53,27,22,24, cluster 2 would consist of 65,67,36,57,86,88,71,75,76,55,77,90,58,81,56,39,91,62,64,59,60,61,79,89,7 2,51,94,54,82,9 and similarly other clusters.

STAGE TWO

y We now proceed to the k means procedure. y In this study- the tables 4,5,6,7 (initial cluster centers, final cluster

centers, cluster memberships and Anova tables) represent the outputs of k means clustering for a 6 cluster solution. Here we will describe the six clusters as follows:

Cluster Benefit Summary

CLUSTER 1 2 3 4 5 6

BENEFIT SOUGHT Social status symbol Socialisers Price convenience. Health Availability convenience Refreshment

SUGGESTIONS

This kind of segmentation will help marketers in a number of ways such as designing of the creative of advertisements, product placement and positioning of the product.y Secondly it highlights the consumer motivations for buying a

product so the marketers can motivate consumers by highlighting the specific benefits.

Part Two: Role of Motivation in Consumer Behavior

Role of Motivation in Consumer Behaviorbehavior can be grouped into three categories motivation, cognition, and learning. Motivation refers to the drives, urges, wishes, or desires which initiate the sequence of events known as "behavior." Cognition is the area in which all of the mental phenomena (perception, memory, judging, thinking, etc. are grouped. Learning refers to those changes in behavior which occur through time relative to external stimulus conditions. All three together are pertinent to a comprehensive understanding of consumer behavior. Human

Consumer Buying Decision

Fragrance as a motivational factor

y A products fragrance affects the product purchase decision in the

following ways A particular product scent must confirm the product performance and has a determining factor in the overall satisfaction enjoyed by the consumer when using the product. A product fragrance can have a significant impact on the brand and may provide product advantages or a clear point of difference. Fragrance can also form a dominant role in preference formation when goods are perceived to be of equal standard or the pure physical differences are so similar that consumers find it difficult to differentiate between them.

Fundamentals of Fragrance Perceptiony Presence of a scent y Pleasantness

y Arousal and intensity:

In accordance with arousal theory, it is suggested that each scent

has an optimal level of concentration that is most preferred. After a point, as the intensity of a scent increases its pleasantness decreases. It is possible to turn a pleasant odour into an unpleasant odour by increasing its intensity or concentration. The optimal level of particular fragrance intensity or concentration should be determined before bringing a product to market.

Bar Soaps as an Example

y Primary factors that consumers will consider when purchasing a

bar soap include its fragrance, brand, price, functionality (quality on ones skin), pack type (multipack etc). Secondary drivers include colour (matching), added value (ingredients), packaging (easy to open/environmental issues

in the Australian marketplace. This is driven by the Palmolive brand, which is available in all body cleaning segments. The segments include bar soaps, shower gels, liquid hand wash and bath additives. A recent relaunch of Palmolive bar soaps resulted in a decline in sales and market share.

y The impact of fragrance on consumer choice was due to several significantly

different features/attributes. Soaps, which were originally in a waxed paper wrap, were repackaged into boxes, with an overlay of clear cellophane. The product fragrances were now more difficult to detect through the new packaging. In addition, while the color of the packaging did not change, the description and ingredients did change. The products changed from Vitamin E (White in color) to chamomile. From peach (peach in color) to almond, from aloe-vera (green in color) to olive. Accordingly, the color of the product remained unchanged, while the fragrance did change. This led to a situation where the color of the product and its packaging no longer matched the fragrance, although the mismatch was clearly a fairly subtle one

y With fragrance as a key driver and color a secondary driver in the

consumer choice of bar soaps, the combined impact of masking the products fragrance with a clear wrap and changing the ingredients without changing the color had a significant impact on market share. y By contrast, Palmolive1 Gold four-pack soap did not change its packaging and the baseline sales did not falter. Instead, sales actually increased due to the transferable demand of Palmolive1 four-pack soap customers.

Managerial implicationsy The example gives evidence to suggest that the

packaging and fragrance changes affected consumer choices in the selection of bar soaps. There is little evidence in marketing theory to suggest a best practice approach when dealing with product fragrances and their application to particular categories.

Pleasure as a motivational factorMovies as an example

y Movies is an example of an experiential product. Experiential products

y y y

y

are defined as those products which consumers choose, buy and use solely to experience and enjoy. The consumption experience, especially its hedonic and aesthetic aspects, is key for understanding experiential products. The results of a survey confirm that involvement with movies is dominantly hedonic. When selecting a movie, subjects consider more alternatives that consume time than ones that consume only money and also consider more subjective than objective features and more global than unidimensional features. Consumers choose, acquire and use experiential products solely to experience them and enjoy them. The dominant benefit of these products is hedonic consumption that is the feelings, emotions and sensations experienced during product usage .

y Experiential products contrast with goods and services that

primarily fulfill utilitarian functions. y To savor the feelings, emotions and sensations of using an experiential product requires the expenditure of time. y Likewise, the experiential perspective argues that the key resource which consumers expend in a transaction is time, rather than money. y Thus one intrinsic quality of experiential products is that they demand the consumption of time.

y Because the benefit from experiential products is pleasure in

consumption, consumers should choose movies and similar products based on what they like and enjoy, on what pleases them, in other words, based on intrinsic preference (O'Shaughnessy 1987). y Therefore, consumers use subjective features, such a; "funny", "suspenseful, "scary", "romantic", to select movies. y Subjective features reflect the consumer's viewpoint, i.e., the personal nature of the experience, and describe the consumption experience, for example, what it is like to see and hear the movie. The subjective features of products are important from an experiential perspective and by extension are important for experiential products.

y In fact, such feature:; can be described as aspects of consumption. y Consumers also consider objective features of experiential products;

such features can be externally verified. Examples for a movie are the director, theatre location, admission price or schedule convenience. Objective features are often tangible and utilitarian. They should be less important for experiential products than subjective features because such products, by definition, do not fulfill utilitarian functions. Be more useful due to their abstractness and their reflection of the hedonic experience.y

Manageriual implicationscommunication efforts for movies and others types of experiential products should include subjective features, visually or verbally, and not simply focus on objective ones, such as the star. The results concerning alterative to movies indicate that competition for movies includes other activities or products, as well as movies. This information may help to better position movies relative to the competition or to direct management's efforts on information gathering about competition. For example, if drinking and eating out are popular alternatives (as in this study), then there may be a ready market for movie theatres that serve alcoholic beverages or meals. Likewise, it seems reasonable that movie theatres locate in malls where consumers can have a meal and/or a drink before or after seeing a film.

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