Thursday, 30 March 2017

Buying Behavior based Segmentation and Pricing

Segmentation has been an integral part of modern day management. Every company does some study to segment its customers. It is being used first to know and then satisfy needs of various sets of customers. Under segmentation, demographic differentiation, psychographic differentiation and behavioral differentiation are the focus of product developments and offerings to customers.
Many marketing and business experts perhaps have used this methodology to segment and satisfy needs, but I see a change happening in this field.
Look at the entire lengthy, time-consuming & continuous process of segmentation, so as to know demographic, psychographic and behavioral dimensions of customers. Whereas the entire underlying reason is to meet the need so as to earn more money from customers. Today, customers’ needs, wants and demands are getting blurred. Reason, customers themselves are not clear what they really need. Old theories describe needs as means to live. But today meaning of Living per se has changed. What some see as needs may be a demands for others.
I conclusively see merit in organization moving away from old way of segmentation based on attributes.
Value Proposition - a concise statement of customers benefits, truly reflects not only the value of a product but what value it adds to each customer based on cost, servicing worthiness and price value.
Customers reasonably can be categorized based on their price sensitiveness, cost of serving them and more apparently how poorly they being served by competitors. Therefore, Marketing and thereon Pricing has to be based on Buying Behavior of Customers and not attributes of product/customer.
More often when I look at one-product companies, I see huge challenge in their segmenting product and then finding reasons to charge premium. Commoditization is not the outcome of only easy entry or more & more competition in a segment but perhaps inability of producers to move from attribute based segmentation to value/Buying Behavior based segmentation.
Lastly, Buying Behavior based segmentation will provide much needed distinct grouping of customers for a single product and satisfying customers’ needs more appropriately. This will help further achieving much required – Company Branding and Effective Pricing, leading to sustainable Life to a company and making more & more money. The ultimate aim of a business, perhaps for most?


  1. I am completely bsc industry chemistry in bhavnagar university

    I hereby declare that the above written particulars are true to the best of my knowledge and belief.