CONSUMER BEHAVIOR

Chapter 2 — Segmentation, Targeting & Positioning

Comprehensive Study Notes with Bangladeshi & Global Brand Examples
Reference: Schiffman — Consumer Behavior (11th Edition)

1. Introduction to STP — Segmentation, Targeting &

Positioning
STP is the foundation of modern marketing strategy. Rather than trying to sell one product to
everyone, marketers divide the market into groups, choose the most attractive group(s), and then
craft a message that resonates uniquely with that group.

Concept Simple Definition

Segmentation Divide the market into groups of consumers
with similar needs
Targeting Choose which segment(s) to serve
Positioning Create a distinct image of the product in the
target consumer's mind

📌 Global Example — Marriott Hotels

Marriott doesn't operate a single type of hotel. It has segmented the travel market and created a
brand for each segment:
• Ritz-Carlton → Ultra-luxury travelers (Premier Positioning)
• Marriott Hotels → Business travelers
• Courtyard by Marriott → Budget-conscious business travelers
• Fairfield Inn → Economy travelers
Each brand speaks directly to its target segment's needs and price expectations.

📌 Bangladeshi Example — Square Group (Toothpaste)

Sensodyne/local toothpaste brands in Bangladesh have segmented based on dental benefits:
• Charcoal White Toothpaste → Whitening seekers
• Expert Protection Pro Sensitive → Sensitive teeth users
• Germi Check → Germ-protection focused consumers

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 • Gum Care Toothpaste → Gum health-conscious buyers
• Sensitive Expert → Severe sensitivity sufferers
One product category, five distinct segments — each with a unique benefit promise.

2. Why Market Segmentation? — The Business Case

Mass marketing (one product for everyone) is less effective and less profitable than targeting
specific segments. Here is why:
• Differentiation is profitable: Tailoring products and messages to specific groups converts
better than generic appeals.
• Levels of segmentation: Mass Marketing → Segment Marketing → Niche Marketing.
Moving from mass to niche increases precision.
• Environment sensitivity: Marketers must watch shifts in consumer behavior and
competition. Brands like Bru, Nestlé, Coke, and Pepsi expanded into vending machine
'ready-to-consume' formats as lifestyles changed.

📌 Bangladeshi Example — Grameenphone vs. Banglalink vs. Robi

The Bangladeshi telecom market illustrates tiered segmentation perfectly:
• Grameenphone → Premium positioning: quality network, corporate/urban users, higher ARPU
• Robi → Mid-range: young professionals, data-heavy internet users
• Banglalink → Value positioning: price-sensitive rural and youth segments
Each operator targets a different psychographic and income segment despite selling the same
product — mobile connectivity.

3. Criteria for Effective Targeting — The 5 Rules

Not every group of people qualifies as a viable market segment. A segment must meet all five
criteria:

Criterion Meaning Example

Identifiable Can clearly define & measure Urban women aged 25–35 in Dhaka earning BDT
who they are using 50,000+ per month
segmentation bases
Sizeable Must have enough Young professionals in Dhaka is sizeable; left-
consumers to make targeting handed vegetarians are not
profitable
Stable & Segments should be E-commerce users in Bangladesh — growing
Growing relatively stable or growing, segment → worth targeting
not declining

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 Reachable Must be accessible via Rural customers → reachable via mobile banking
media, distribution, or (bKash) & local agents
promotions
Congruent Company must have the A startup cannot target all of Bangladesh; must
with means and interest to serve start with one city/segment
Resources the segment

4. Bases for Segmentation — How to Divide the Market

Consumer characteristics used to segment markets fall into two broad types:

4A. Demographic Segmentation

The most common and cost-effective form of segmentation. Demographics can be precisely
measured and are directly linked to buying behavior.

• Age — Products designed for children, teens, adults, or seniors

• Gender — Men's vs. women's products
• Marital Status — Singles vs. married couples (different lifestyle, needs)
• Family Life Cycle — Bachelor, newly married, family with young kids, empty nesters
• Income, Education & Occupation — Determines purchasing power and aspiration levels

📌 Bangladeshi Example — PRAN Foods

PRAN uses demographic segmentation across its product range:
• Age-based: PRAN Frooto & Mango Juice → children and teens; PRAN Coconut Water →
health-conscious adults
• Income-based: PRAN economy noodles for low-income consumers; PRAN premium range for
middle class
• Gender-based: PRAN's marketing for certain dairy products targets mothers/homemakers
specifically

📌 Global Example — P&G (Procter & Gamble)

P&G segments by income via tiered pricing:
• After the 2008 recession, P&G introduced value-priced versions of its products to reach
budget-conscious consumers
• Gillette Fusion ProShield → Premium men; Gillette Guard → Price-sensitive markets like rural
India/Bangladesh
• SK-II → Affluent women aged 30+; Olay → Mid-range women skincare segment

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4B. Family Life Cycle Segmentation
Consumer needs change dramatically as they move through life stages. The family life cycle helps
predict purchase patterns.

Life Stage Typical Consumer Behavior

Bachelor (Single, young) Spending on fashion, entertainment, gadgets,
fitness
Newly Married (No children) Furniture, appliances, travel, dining out
Full Nest I (Young children) Baby products, education, family cars, organic
food
Full Nest II (Older children) School fees, electronics, larger home
Empty Nest (Children left) Health products, travel, investment, luxury
Solitary Survivor (Senior) Healthcare, insurance, convenience services

📌 Example: Who buys organic food?

Full Nest I (young parents with toddlers) and health-conscious singles are most likely to:
• Shop at specialty organic stores (like Shajgoj's organic range or import stores in Gulshan,
Dhaka)
• Pay premium prices for fresh, additive-free produce
• Respond to messages about child safety and health

4C. Geodemographic Segmentation

A hybrid approach: people living close together tend to share similar income, tastes, and lifestyles.
Location + demographics = geodemographics.

📌 Bangladeshi Example — Location-Based Marketing

In Bangladesh, geodemographic segmentation is visible in:
• Gulshan/Banani, Dhaka → Luxury restaurants, international brands, premium supermarkets
(Meena Bazaar, Agora premium aisles)
• Old Dhaka → Traditional foods, local clothing brands, price-sensitive markets
• Sylhet → High remittance income from UK diaspora → premium consumer goods, branded
clothing
• Chittagong Port Area → Business-class consumers with import/export trade income

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4D. Psychographic / Lifestyle Segmentation (VALS)
Psychographics goes beyond demographics to understand WHY people buy. It looks at Activities,
Interests, and Opinions (AIO). The most famous psychographic framework is VALS — Values and
Lifestyles.

VALS divides consumers by PRIMARY MOTIVATION (left to right) and RESOURCES (top to
bottom):

VALS Type Description Brand Example

Innovators Highest resources, all three Apple, Tesla, Airbnb
motivations; sophisticated,
receptive to new ideas
Thinkers Ideals-motivated; mature, The Economist, Volvo, Samsung
responsible, value knowledge Galaxy (premium)
Believers Ideals-motivated; traditional, Bata shoes (Bangladesh), established
moderate resources, brand loyal local brands, Horlicks
Achievers Achievement-motivated; career- BMW, Rolex, Business Class airlines
focused, value prestige
Strivers Achievement-motivated; lower Fast fashion, Xiaomi smartphones,
resources; trendy, impulsive Walton TV (BD)
Experiencers Self-expression; youthful, variety- GoPro, Red Bull, Nike Air Jordan
seekers, risk-takers
Makers Self-expression; practical, self- DIY tools, local Bangladeshi artisan
sufficient brands, Aarong
Survivors Lowest resources; brand loyal out Generic/economy brands, subsistence
of necessity, safety-focused products

4E. Benefit Segmentation

Segments consumers based on the specific BENEFIT they seek from a product. This is closely
linked to positioning.

Five strategic brand benefits:

• Functional (Quality): Product performance — e.g., Colgate Total for 12-hour protection
• Value for Money: Best deal — e.g., Meril (Square BD) affordable skincare
• Social Benefit: Status or belonging — e.g., iPhone, Rolex
• Positive Emotional Benefit: Joy, confidence, pride — e.g., Coca-Cola 'Open Happiness'
• Negative Emotional Benefit: Reduces fear or anxiety — e.g., Dettol (removes germs,
protects family)

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 📌 Colgate — Benefit Segmentation in Action
Colgate classifies its entire toothpaste range by benefit:
• Long-lasting fresh breath → Colgate Advanced Fresh Gel
• Plaque protection → Colgate Total Advanced Clean
• Sensitivity relief → Colgate Sensitive Expert
• Tooth whitening → Colgate 2-in-1 Oxygen Whitening
Bangladeshi parallel: Sensodyne targets only the sensitivity benefit — 'for sensitive teeth' is the
entire brand identity.

4F. Green / Sociocultural Segmentation

Segments consumers based on environmental attitudes and values. Four key types of Green
consumers:

Green Consumer Type Behavior Pattern

True Greens Fully adopted eco-friendly behaviors — buy
organic, recycle, avoid plastic
Donor Greens Give money to environmental causes but don't
change their shopping habits
Learning Greens Interested in environmental issues but not yet
actively changing behavior
Non-Greens Do not factor environment into consumption
decisions at all

📌 Bangladeshi Example — Green Marketing

• Aarong (BRAC) → Targets True Greens with handmade, eco-friendly, fair-trade products
• Meena Bazaar organic section → Targets Organic Eaters / True Greens in urban Dhaka
• Global: Patagonia → Exclusively targets True Greens; campaigns tell customers to 'buy less'
• Global: IKEA → Targets Learning Greens with affordable eco-friendly furniture options

4G. Usage Situation Segmentation

Products are promoted for specific occasions or situations. The behavior of buying is tied to context.

• Hallmark Cards: Greeting cards designed for every occasion — birthdays, Eid, graduation,
condolences, Valentine's Day
• Chocolates & Premium Foods: Ferrero Rocher, Cadbury → sold heavily around Eid,
Christmas, Valentine's Day

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 • Bangladeshi Example: Iftar products (dates, jilapi mix, piyaju mix, sharbat) → heavily
marketed during Ramadan; companies like PRAN and ACI launch Ramadan-specific
product lines

4H. Behavioral / Awareness-Based Segmentation

Consumers are segmented based on their awareness level and product involvement:
• Unaware → First-time exposure needed
• Aware but uninterested → Need persuasion and benefits communication
• Interested → Need pricing and availability information
• Ready to buy → Need a call-to-action, discount, or easy purchase option
• Loyal buyers → Need loyalty rewards and reinforcement

5. Behavioral Targeting — Tracking the Digital Consumer

Modern marketers track what consumers DO online to deliver hyper-personalized messages. This
is behavioral targeting.

What marketers track online:

• Website visits: Which sites you visit and how long you stay
• Engagement: Pages viewed, scroll depth, return visits
• Social media content: Lifestyle, interests inferred from posts and likes
• Purchase history: What you bought, almost bought, or returned

Key concepts:
• Showrooming: Scanning barcodes in physical stores to find lower prices online — threat to
retail brands
• Geofencing: Sending promotional alerts to smartphones when customers are near/in a
store — e.g., Shajgoj app sending offers when you are near a cosmetics store in
Bashundhara City
• Predictive Analytics: Using past purchase data to predict what you will buy next — e.g.,
[Link] showing 'you might also need' based on previous grocery orders

📌 Global Example — Amazon's Behavioral Targeting

'Customers who bought this also bought...' — Amazon's recommendation engine uses:
• Your browsing history
• Your purchase history
• Comparative patterns across millions of users
This drives 35% of Amazon's total revenue through personalized recommendations.

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 📌 Bangladeshi Example — Daraz & Shohoz
• [Link] tracks search queries, wishlist additions, cart abandonment, and past purchases
• Sends personalized push notifications: 'Your saved item now has 20% off!'
• Shohoz uses location data to show relevant restaurant deals when you are near delivery zones
• bKash uses transaction data to offer tailored financial products (loans, insurance) to specific
user profiles

6. Positioning & Repositioning — Owning the Consumer's

Mind
Positioning is the image a product occupies in the consumer's mind. It is intangible — it lives only in
perception, not in the product itself.

Steps to Develop a Positioning Strategy:

1. Define the market, target buyers, and key competitors
2. Identify key attributes that consumers value
3. Assess how consumers perceive competing brands on those attributes
4. Determine the target segment's ideal combination of attributes
5. Develop a distinctive, value-based positioning statement
6. Communicate the position consistently across all channels

Types of Positioning Strategies:

Strategy Definition Example

Premier Position Focuses on exclusivity; higher Chanel, Rolex, Louis Vuitton; BD:
price = higher prestige Hatil Furniture premium line
Umbrella Positioning One brand slogan covering the Grameenphone: 'Stay Close';
company's full offering BRAC: 'Building Resources Across
Communities'
Key Attribute Brand superior on one specific, Volvo = Safety; Sensodyne =
relevant attribute Sensitivity Relief; Meril =
Moisturization
Against Competition Directly contrasts with competitor Pepsi's 'Choice of a New
brands Generation' vs. Coca-Cola; 7Up
'The Uncola'; Avis 'We Try Harder'
vs. Hertz
Un-Owned Position Claims a position no competitor Miller Lite: 'Great taste, less filling'
has taken — owned the 'light beer' space

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 Repositioning Strategically changes the existing Old Spice (repositioned from dad's
brand image to appeal to new deodorant to young men); Aarong
segments (from charity brand to premium
fashion)

Perceptual Mapping
A perceptual map is a visual diagram plotting brands along two key dimensions (e.g., price vs.
quality, traditional vs. innovative). It helps marketers:
• See how consumers perceive brands relative to competitors
• Identify gaps (un-owned positions) in the market — opportunities for new products
• Develop repositioning strategies to move a brand's perceived position

📌 Bangladeshi Example — Perceptual Map: Fast Food in Dhaka

Imagine plotting Dhaka fast food brands on 'Price' (low → high) vs. 'Healthiness' (unhealthy →
healthy):
• KFC / Pizza Hut → High price, perceived as indulgent (not very healthy)
• Takeout street food (Fuchka, Chotpoti) → Very low price, indulgent
• Shwarma chains (Doner Kebab, etc.) → Mid-price, mid-health
• Salad/health cafes in Gulshan → High price, high health perception
A GAP exists: low-price, high-health fast food in Dhaka — a positioning opportunity for a new
entrant.

7. Mini Cases — Test Your Understanding

Each case below presents a scenario. Read it, then check the precise answer.

CASE 1: Segmentation Criteria — Is This a Viable Segment?

Scenario: A startup in Bangladesh wants to target 'left-handed vegetarian female software
engineers in Sylhet aged 28–33.' They argue this is a unique group with special needs. Should
they target this segment?
Answer: NO. This segment fails the SIZEABLE criterion. While it may be identifiable, the
segment is far too narrow to be profitable. It also likely fails the REACHABLE criterion cost-
effectively. A better approach would be to broaden to 'female tech professionals in Sylhet' — still
targeted, but large enough to generate returns.

CASE 2: Demographic Segmentation — Which Segment?

Scenario: A Bangladeshi insurance company wants to sell health insurance. They notice a
spike in demand from people aged 45–60 in Dhaka who have grown children and high
disposable income. Which family life cycle stage is this?

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Answer: This is the EMPTY NEST stage (children have grown up and left home).
Characteristics: stable high income, fewer dependent expenses, health anxiety increases with
age. Best marketing message: 'Protect your health for the retirement years you have worked so
hard for.' Product: comprehensive health + hospitalization coverage.

CASE 3: VALS — Which Type Is This Consumer?

Scenario: Rafi, 26, works in a startup in Dhaka. He buys the latest Xiaomi phone, wears
popular fast-fashion brands, and closely follows Instagram influencers to decide what to buy. He
aspires to look successful but has limited income. Which VALS type is Rafi?
Answer: Rafi is a STRIVER. Strivers are achievement-motivated but have limited resources.
They are trend-conscious, image-focused, and buy aspirational brands they can afford (Xiaomi
as the 'affordable iPhone'). Marketing approach: emphasize style, status, and how the product
makes them look successful to others.

CASE 4: Benefit Segmentation — Which Benefit?

Scenario: Square's 'Germi Check' toothpaste in Bangladesh runs ads showing a mother
protecting her children from invisible germs during Eid gatherings. What type of benefit is being
communicated?
Answer: NEGATIVE EMOTIONAL BENEFIT — specifically, fear reduction. The ad triggers
anxiety about germs harming the family, then offers Germi Check as the solution. This type of
emotional benefit works best for health and hygiene products. Parallel: Dettol's 'be 100% sure'
campaigns globally use the same fear → solution benefit appeal.

CASE 5: Positioning — Premier vs. Key Attribute

Scenario: Compare how Hatil and Otobi position their furniture brands in Bangladesh. Which
uses Premier Positioning and which uses Key Attribute Positioning?
Answer: HATIL uses Premier Positioning — it commands higher prices, emphasizes exclusivity,
craftsmanship, and uses showrooms in premium locations (Banani, Gulshan). The higher price
itself signals quality and status. OTOBI uses Key Attribute Positioning — it positions on 'modern
design at affordable prices' targeting middle-class urban buyers. The key attribute is VALUE
FOR MONEY + contemporary aesthetics.

CASE 6: Repositioning — Success or Failure?

Scenario: Old Spice was considered an 'old man's aftershave' brand for decades. P&G
repositioned it with humorous, irreverent YouTube ads targeting young men aged 18–34. Was
this repositioning, and what type?
Answer: YES — this is classic REPOSITIONING. P&G needed to freshen the brand's identity
and appeal to a new, younger segment without alienating existing users entirely. The 'The Man
Your Man Could Smell Like' campaign shifted Old Spice from 'grandfather's cologne' to a funny,
confident, young-man brand. It succeeded because: (a) the new target segment was large, (b)
the message was distinctive and memorable, (c) it used digital/social media to reach the exact

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target demographic.

CASE 7: Behavioral Targeting — Identifying the Technique

Scenario: You are walking near a Shwapno supermarket in Dhaka when your phone buzzes:
'You are near Shwapno! Today only: 20% off on all rice brands. Tap to redeem.' What
behavioral targeting technique is this?
Answer: GEOFENCING — the marketer set up a virtual geographic boundary around the store.
When your phone (opted into the service) enters that boundary, an automated promotional alert
is triggered. This is real-time, location-based behavioral targeting. It works best for driving in-
store visits at the moment of maximum purchase intent.

CASE 8: Perceptual Mapping — Finding the Gap

Scenario: In the Bangladeshi bottled water market: Mum is perceived as cheap and low quality;
Pran water is mid-range; Evian (imported) is very expensive and high prestige. If you were
launching a new bottled water brand, where on the map would you position it?
Answer: The GAP in the perceptual map is the MID-TO-PREMIUM segment — quality close to
Evian at a price accessible to upper-middle-class Bangladeshis (priced around BDT 50–80 per
500ml vs. Mum at BDT 15 and Evian at BDT 300+). Position as: 'Pure. Premium. Bangladeshi.'
— local pride + premium quality at accessible price. This un-owned position could be highly
profitable in a health-conscious urban market.

CASE 9: Green Consumer — Which Type?

Scenario: Nadia buys organic vegetables when they are available and has signed two online
petitions about river pollution in Bangladesh but still uses plastic bags at the grocery store and
drives a personal car daily. Which type of green consumer is she?
Answer: Nadia is a LEARNING GREEN — she is interested in environmental issues and makes
some effort (organic food, online activism) but has not fully changed her actual consumption
behaviors (still uses plastic, drives). Marketing implication: she is open to eco-friendly products if
they are convenient and not too expensive. She is a convertible green consumer — a good
target for green product launches that lower the barrier to eco-friendly choices.

CASE 10: Online Behavior — Showrooming

Scenario: Tarik visits a Transcom Electronics store in Dhaka, finds a Samsung TV he likes,
scans its barcode, and then opens Daraz to check if the same TV is cheaper online. He buys it
on Daraz for BDT 3,000 less. What is this behavior called, and what should the physical retailer
do?
Answer: This is SHOWROOMING — using a physical store to experience a product but
purchasing online at a lower price. It is a growing challenge for physical retailers in Bangladesh.
Counter-strategies: (1) Price matching — promise to match online prices; (2) Exclusive in-store
bundles — add free installation, warranty, or accessories not available online; (3) Loyalty
programs — reward in-store purchases; (4) Experiential retail — make the store visit itself
valuable (demos, personalized service). Brands like Apple have successfully combated

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 showrooming through premium in-store experiences.

8. Quick Revision — Key Terms at a Glance

Term One-line definition with example

Segmentation Dividing a market into distinct groups — e.g., PRAN divides by
age (kids, adults, seniors)
Targeting Choosing which segment(s) to serve — e.g., Grameenphone
targets urban professionals
Positioning Creating a distinct mental image — e.g., Sensodyne = the
sensitive teeth brand
VALS Values & Lifestyles psychographic segmentation framework — 8
consumer types
Benefit Segmentation Grouping by desired product benefit — e.g., whitening vs.
sensitivity relief in toothpaste
Geodemographic Location + demographics combined — e.g., Gulshan consumers
vs. Old Dhaka consumers
Geofencing Location-triggered mobile alerts — e.g., Shwapno discount alert
when you walk by
Showrooming Browse in store, buy online cheaper — growing challenge for
Dhaka electronics retailers
Predictive Analytics Forecast future purchases from past data — e.g., Chaldal 'you
might also need' suggestions
Perceptual Map Visual diagram of brand positions — helps find gaps for new
products
Repositioning Strategically changing brand image — e.g., Aarong from NGO
brand to premium lifestyle
Premier Positioning Exclusivity + prestige = high price — e.g., Hatil, Rolex, Chanel
Un-Owned Position Claiming a gap no one else occupies — e.g., Miller Lite's 'less
filling' light beer space
True Green Fully eco-friendly consumer — e.g., buys only organic, avoids
plastic, recycles consistently
Family Life Cycle Life stages affecting purchase behavior — Full Nest I buys baby
products; Empty Nest buys health products

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 — End of Chapter 2 Study Notes —

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