Yes, we tried to come up with a catchy title. “The Benefits of Benefit Segmentation”. When firms appeal to segments based on consumer desires, the consumers benefit. In return, companies benefit by gaining better loyalty.

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Achieving the Benefits of Benefit Segmentation

Background 

According to the Market Segmentation Study Guide:

As implied by the name, benefit segmentation splits the market. Based on key customer benefits and needs. Therefore, benefit segmentation offers a very consumer-centric approach. Because it identifies the core product needs of consumers. 

Then, these segments can be profiled and described by adding demographic information and some behavioral variables. Such as brand attitudes and level of consumption. This means, we can develop a deeper understanding of the consumers within that segment.

Furthermore, this approach presents advantages in product positioning. As we know, the core benefit/need sought from the segments themselves, it becomes quite clear as to how to effectively position the product for success in the marketplace.

Marketing and Benefit Segmentation

Alexa, the Web analytics firm offers key insights for marketer:

Companies use benefit segmentation to learn which members of their target audiences will benefit most from using the companies’ products. This helps identify target audience members most likely to convert. Why? Since they need your product.

One positive by-product involves reducing customer churn. If you know a customer well, you will deliver the exact value sought. Then, if your product continually meets the specific needs of different customers, they will likely continue purchasing from your firm.

Within its discussion. Alexa provides several examples. Below, we focus on one — Crest:

Crest markets different toothpastes based on the results they deliver. Thus, it offers toothpaste for teeth whitening. And another for sensitive teeth. In the image below, you see advertising tailored to customers looking for whiter teeth.

The Benefits of Benefit Segmentation
Source: Crest.

 

2 Replies to “The Benefits of Benefit Segmentation”

  1. The concept has been around forever. It makes sense. The problem has always been identifying and reaching the right consumers with the right benefits message. Crest throws product into stores with packaging that is only slightly differentiated, and hopes that consumers will self-select the right product for what they want. It will be interesting to see if they are actually achieving incremental profits from this approach, or losing money due to incremental design, manufacturing, marketing and inventory costs.

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