The laws of choice & consumer segmentation
Hi readers! I have an interesting topic to discuss this week — does choice always help brands grow business or do consumers get confused by the choice they are offered because of segmentation? These are the questions that have been on my mind and here’s my analysis. Let me know if you agree/disagree and have different opinions regarding the same.
But before we get into answering these questions, let us first make sure we are all on the same page when it comes to some of the important and basic concepts involved in understanding consumer segmentation.
What is the law of choice?
It is a theory about the decision-making process of people and how the market research can measure choice preferences in meaningful manner. This helps marketers conclude through research and then successfully predict consumer behavior.
What is consumer segmentation?
Dividing the consumers according to different types of traits in order to reach more specific markets, with a particular message or an advertising campaign. It helps marketers to focus on the group of people who are going to be open to receiving what you have to say and what you have to sell.
Even when we consider awareness building campaigns, we will be targeting the people whose behavior and thoughts we want to influence rather the ones who are already believers in our message. Such campaigns also include reaching newer markets across the globe.
What different types of segmentation are there?
There are four main types of consumer segmentation — demographic, behavioral, psychographic and geographic segmentation.
Demographic — The segmentation is done based on gender, age, marital status, family size, occupation, education, income, race, nationality and religion.
Behavioral — This one is based on consumer’s shopping habits offline as well as online, actions when on a brand’s website, benefits that they seek, rate of usage and loyalty towards the brand.
Geographic — Location based targeting makes up geographic segmentation.
Psychographic — This type of segmentation is similar to demographic segmentation but this one has more to do with the mental characteristics of a consumer than the emotional.
Alright, now that we have understood the basics, let’s move on to whether a choice always helps us grow business or do consumers get confused by the choice they are offered because of segmentation?
Here’s what I think about giving consumers of today a choice — I think that millennials and Gen Z are smart enough to make choices based on a number of things that matter to them. With the rising amount of competition in the market, brands need to find multiple offerings that will provide their target group things they ‘need’ in their life — products and services that solve problems and make them feel happier and more alive!
It is profitable for brands therefore to offer as many different products with qualities that match what the consumers are looking for. I don’t think consumers will get confused if the brand manages to create a unique selling proposition and talks to the consumers in an authentic voice that resonates with the target group.
Segmentation is here to make the process for both marketers and the target group easier. Let us take an example of an ice cream brand — usually ice cream brands offer some textbook flavors like chocolate, vanilla and butterscotch. But if every brand only offered just these flavors, can you imagine how boring it would be for consumers and difficult for marketers to compete and win among other brands? It would be extremely difficult!
Offering more flavors that are unique and liked by a particular geographic location, is going to be a super hit! In India, we love street food like ‘chaat’ (foods with a mixture of tangy, sweet and spicy foods).
Recently a brand called ‘Noto’ has created a range of ice creams in flavors like ‘Tangy Imli’, ‘Joyful Jamun’, ‘Bossy Berry’ and many more — all of which have vitamin C, real fruit, vitamin C fortified and no added sugar! All these ice cream popsicles are good for the gut, gluten free, keto-friendly and have a low glycemic index. You get a healthy and delicious treat filled with flavors Indians will appreciate because they have been made to appeal to our taste buds. Today a consumer might feel like relishing one flavor and later in the evening, maybe a completely different flavor!
Choices don’t confuse consumers, they empower them!
Therefore, in conclusion, I would like to say that when a range of products and services are properly divided under a name with a story, it is highly likely that your target group will remember the brand and products. It is the oldest trick in the book! Something that we have learned since childhood in school that when we attach a story, a strong emotion and a memory to anything, we will remember it! This way, the recall value of a product can be increased with a strategic approach.
As Seth Godin says, “Don’t find customers for your products, find products for your customers!” — Seth Godin.
Did you find this blog insightful? Do drop a comment and let me know what your opinions are! 😊
