Page 4: Segmentation
When marketing a product category, firms need to identify the different market segments. Segmentation involves identifying sets of characteristics that distinguish particular groups of customers from others. For example this may be based on:
- Demographics, i.e. to divide up the population into groups based on age, gender etc. BIC uses this approach to some extent, recognising that different retailers appeal to different types of consumer based on age profiles and income, and that different groups of end consumers seek different products e.g. male and female shaver requirements. Promotion, advertising and presentation of products are therefore tailored to these differences.
- Usage, in addition to its world-leading range of pocket lighters, BIC introduced BIC Megalighter designed to light BBQs and BIC Megalighter for candles in 2004.
BIC also uses a segmentation approach looking at the behaviour or needs of consumers. For example, BIC's research into its stationery product category shows that there are three distinct types of writing instrument shopper.
- Best value for money - This type is typically bought by offices and households that have writing instruments in virtually every room. Everyone is allowed to use any available pen, so there's no great problem if one is misplaced. Households tend to seek lower priced pens, and regularly make new purchases of assortments of writing instruments based on current needs.
- Seeking specific benefits - Here consumers are looking for a more personalised item; something they regard as 'my pen'. It will be kept in a private place belonging to that individual, who may be reluctant to let anyone borrow it. Buying decisions will typically take longer, and involve careful consideration over choice. Key features looked for will include the pen being comfortable to hold and its capacity for producing smooth, writing that reflects the individual e.g. by colour or handwriting style. Marketing activity therefore needs to focus on these more sophisticated individual needs.
- Impulse buy - Impulse buys are unplanned. Innovative designs will attract this segment, largely because the consumer is buying for pleasure. Purchasing in this segment is far more emotional and so the skilful marketer will seek to create 'objects of desire'. Attention grabbing Point of Sale displays are essential to stimulate impulse buys.
BIC aims to create a balanced product portfolio, including:
- reliable, value for money products for regular household purchasers
- premium high quality products for the consumer that wants 'something special'
- novel, attractive products, sometimes with a fairly short life cycle.