Common Market Segments

The rate of adoption for an innovation depends on the type of consumer to whom the product is marketed. Some adopters are receptive and readily adopt innovations, whilst others are slow to adopt. This ‘diffusion of innovation’ process suggests that certain groups of consumers are highly influential and this influence will ‘diffuse’ through to subsequent consumer groups. We should, however, be aware that consumers who exhibit particular adopter characteristics for one category of product might behave differently in the adoption of another product type. But in the context of consumer buying behaviour we can see how each adopter group possess distinct characteristics.

Although every marketing department has its own definitions and names for the market segments they target, there are some common terms. In 1962 Everett Rogers described five market segments in his book ‘Diffusion of Innovations’:

❑ Innovators (2.5%) create something new and start a new trend. They are likely to be younger, better educated, and relatively affluent with a higher social status. They are likely to be broad minded, receptive people with a wide range of social relationships. Their product knowledge relies more on their own efforts to gather objective information, than on company literature or salespeople.

❑ Early adopters (13.5%) identify trends early and like to be associated with the start of a trend. They possess many characteristics of innovators, but tend to belong to more ‘local’ systems. Although social relationships are less broadly based, they tend to be opinion leaders and are influential within their particular group. As such, they are a major target for marketers whose aim is to get their product accepted as quickly as possible.

❑ Early majority (34%) follow the trends set by the early adopters. This is a group that is slightly above average in socio-economic terms. They rely heavily on marketing for information and are influenced by the opinion leaders of the early-adopter category. They adopt new products before the average consumer.

❑ Late majority (34%) follow the trends that have been tested by the early majority. These adopters are more likely to adopt because the innovation has been accepted by earlier groups. Social pressure or economic considerations are more influential in this group than personal characteristics.

❑ Laggards (16%) are the last group of people to buy a product or brand: indeed they may never buy it. They make up the cautious group. They tend to be older, with lower socio-economic status. The innovator group may be considering a newer product before laggards have adopted the original innovation.

2. Delete the incorrect word combination in each group. Then use the correct word combinations to complete the sentences below:

1 2 3 4

a customer segment a early adopters a market adopters a married majority

b customer household b early majority b silver market b late majority

c customer profile c early market c market segment c early majority

1)…………… like to try out new trends and products.

2)The …………… is getting bigger as people live longer.

3)The …………… try products that are well established in the marketplace.

4)Companies can build up a …………… using market research.

3. Think about yourself. Which market segment(s) are you in? Is it the same for your friends and colleagues?

Date: 2015-01-12; view: 1560