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BEHAVIORAL-BASED SEGMENTATION AND MARKETING SUCCESS: AN EMPIRICAL INVESTIGATION OF FAST FOOD INDUSTRY

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Segmenting market base on behavioral perspective not only has tremendous potential for growth and profitability but also poses challenges for both incumbents and new entrants in the fast food industry. By examining the measures of marketing success from a behavioral perspective, the authors conceptualize three dimensions of behavioral technique that are critical for superior marketing success in the fast food industry: benefit sought, usage rate, and loyalty status. Demo-psychographic variables on marketing success (e.g; customer satisfaction, customer loyalty, sales growth, profitability) using data from 156 fast food firms. The result show that benefit sought and loyalty status affect marketing success.
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European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
56
BEHAVIORAL-BASED SEGMENTATION AND MARKETING
SUCCESS: AN EMPIRICAL INVESTIGATION OF FAST FOOD
INDUSTRY.
Amue Gonewa John
*
Abieye Horsefall Igwe Sunny R
*
Faculty of Management Sciences, University of Port Harcourt, PMB 5323, Choba
*amuejohgonewa@yahoo.com
*chikordi@yahoo.com
Abstract
Segmenting market base on behavioral perspective not only has tremendous potential for growth and profitability but also
poses challenges for both incumbents and new entrants in the fast food industry. By examining the measures of marketing
success from a behavioral perspective, the authors conceptualize three dimensions of behavioral technique that are critical
for superior marketing success in the fast food industry: benefit sought, usage rate, and loyalty status. Demo-psychographic
variables on marketing success (e.g; customer satisfaction, customer loyalty, sales growth, profitability) using data from 156
fast food firms. The result show that benefit sought and loyalty status affect marketing success.
Keywords: Behavioral-Based Segmentation; Marketing success, Demo-psychographic
Introduction
Segmentation is among the earliest concepts in marketing and it has becomes a long lasting strategy in the subject area
(Future and Martins, 2008). Segmentation, the process of dividing the market into groups of customers with similar needs,
and developing marketing programs that meet those needs, is essential for marketing success (Gary and Rangaswamy,
2004). Markets are heterogeneous. Customers differ in their values, needs, wants, constraints, beliefs and incentives to act in
a particular way. Products compete with one another in attempting to satisfy the needs and wants of those customers
(Dowling, 2004). By segmenting the market, firms can better understand their customers and target their marketing efforts
efficiently and effectively. Though this strategy, firms strive to attain a happy middle ground where it does not rely on a
common marketing program for all customers nor does it incur the high costs of developing a unique program for each
customer. However, previous research has suggested that there are variety of measures of segmenting the markets, and
empirical results have not consistently shown that segmentation variables in marketing is always the same even when the
measures are examined (Fazio and Kelly, 2009). Market segmentation is used to identify those potential customers most
accessible on the vending firm’s efforts (Bonoma et al, 1990). They noted that most organization segment the market to
better serve customers, compete more effectively and achieve organizational goals such as profitability. Wikipedia (2011),
the purpose of segmenting a market is to allow marketing program to focus on the subset of prospects that are most likely to
purchase your offering. If done properly, this will help to ensure the highest return for your marketing expenditures.
This article contributes to research and theory of segmentation by developing and testing a model on behavioral-based
segmentation in terms of purchase pattern and loyalty status. The model offered in this article moves beyond focus on target
market alone but offers a model of the processes by which firms select information and make judgment about appropriate
marketing program to achieve marketing success. The role of these behavioral processes involved in the facilitation of these
segmentations is specifically addressed through the model featured in this article. Thus, the model provides a means for
reconciling earlier works that has employed different measures of behavioral base segmentation variables that capture
relevant segments of the market. It extends the methodological work of Precious and Katty (2010) on dimensions of
behavioral segmentation by examine behavior from buying pattern and loyalty status that have not been systematically
examined in previous behavioral based segmentation research.This article also examines the role and impact of economic
and social actors and more specifically, the content of such contextual factors on behavior-based segmentation and
marketing success. While much of the research on behavioral-based segmentation ignores the role of
demographic/psychological factors such as (family life cycle and social class), some research work suggests that demo-
psychographic factors may play a moderating role (Akani, Segel and Lank 2007, Better 2009). This article examines the
moderating role of demo-psychographic factor within the context of the conceptual model of behavioral-based
segmentation and marketing success in the fast food restaurants.
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Prior Research on Behavioral-Based Segmentation
Virtually all prior research on behavioral-based segmentation rests on the premise that knowledge attitude, uses or responses
to a product are the best starting point for building markets segments (Kotler and Armstrong, 2004). Dividing a market into
groups based on consumer knowledge attitude toward usage, actual and intention to use or response to a product. A key
element of this work is the notion that markets or customers are segmented on no other variable apart from the behavioral
characteristics. Thus, dividing the market into groups according to occasions when buyers get the idea to buy, actually make
their purchase, or use the purchased item, dividing the market into groups according to the different benefit that consumers
seek from the product and loyalty status may all be associated with behavioral based-segmentation (Kotler and Armstrong,
2004). Berry and Sarkis (2006) demonstrated that the role of socioeconomic factor moderated the influence of behavioral-
based segmentation. These authors found that socioeconomic factors in terms of level of income and social class influence
behavioral-based segmentation in the form of purchases pattern and loyalty status impact on marketing success in terms of
customer satisfaction customer repeat purchase and customer retention.
Baggozi and Stewart (2005) demonstrate that structural models that include a latent organizing construct an aggregation of
various measures of segmentation bases. Interestingly, these authors find that such a latent construct provides a better fit
even when the variables are behavioral-based. An understanding of the processes that produce summary of these bases is
important for both theoretical perspective it is important to differentiate among alternative segmentation bases.
An important distinction among studies of segmentation variables revolves around adaptive strategy (Smith and Passion
2006: Martin 2007; Alba and Peterson 2009). It consists of the partition of the market with the purpose of selecting one or
more market segments which the organization can target through the development of specific marketing mix that adapt to
particular market needs. Martins (2008) posited that market segmentation need not be a purely adaptive strategy; the process
of segmentation can consist of the selection of those segments for which a firm might be particularly well suited to serve by
having competitive advantages relative to competitors in the segment reducing the cost of adaptation in order to gain a
niche. Porter (1985) concluded by saying that, the application of market segmentation serves the purpose of developing
competitive scope, which can have a powerful effect on competitive advantage because it shapes the configuration of the
values chain.
Bernard and Johnson (2006) demonstrated that product usage and actual behavior such as buying pattern, usage data,
channel ownership, quantities, brand loyalty, attitude, are behavioral based segmentation variables. They further explains
that variables in the first category are unchangeable by the marketer, so the segmentation by this level of variable should
yield adaptive strategies that recognize the reality of consumer characteristics and finding ways to use them to firm’s
advantage. The second level is relatively stable overtime since individuals are not likely to change their values and beliefs
as Rise and Treat (1981, 1990) have categorically stated. At the third level, change is the norm and so this is where the
marketer can influence the target audience (Barsalon and Parker, 2007). This aspect of segmentation is based on actual
customer behavior toward products. Other stories have been represented as a construct between behavior-based
segmentation and marketing success. This relationship is found in several marketing literature (Houston 1993; Martin and
Stewart 2001; Ratnesh War, Barsalou, Pechmann and Moore 2000).
It is well recognized that this segmentation variable is basic dependent (Murphy and Apollos, 2008) and attributes used are
behavioral in nature. Segmenting the market base on benefit sought requires finding the major benefits people look for in
the product class, the kind of people who look for each benefit, and the major brands that deliver each benefit (Gray and
Armstrong, 2004),hence behavior segmentation should be most successful when consumer are grouped base on their need
expectations, hope and benefit sought. The less segmentation is done on benefit sought, the less likely marketing success,
this view is different from other segmentation dimensions in market segmentation research. Prior research has treated
behavior-based segmentation as grouping the market base on life style or personality characteristics, this is not behavior
rather psychographic, the behavioral approach treats the segmentation base on individual behavior characteristics, such as
benefit the consumer is looking for Becky and Fazio (2005) suggests that, segmenting the market base on benefit sought
will lead to increase in marketing responses from the customers. This group of customer that are segmented base on the
benefit sought, the organization will focus on value creation and value delivery to this customer group and it will enhance
marketing success. this explanation is consistent with the view that behavior-based segmentation provide a stronger, basis
for explaining the relationship between predictor variable and criterion variable the primacy of behavior- based
segmentation approach as demonstrated by Becky and Fazio (2005) and as a necessary condition for the subsequent
examination of behavioral-based segmentation measures, this article seeks to replicate this effect. Thus.
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Hypothesis 1:
Segmenting a market based on benefit sought, customer
expectation and hope will have greater effect on marketing
success measures in terms of repeat purchase, customer
satisfaction, sales growth and profitability.
Markets can be segmented into light product users, medium and heavy product users. Heavy users are often a small
percentage of the market but account for a high percentage of total consumption (Gary and Armstrong, 2004). Firms usually
prefer to attract one heavy user to their product or service rather than several light users, using a common measure of light
(LU) medium (MU) and heavy users (HU), Schmitz and Bowen (2008) demonstrated that heavy product users are higher
consumer of products thus measures of segmenting market base on behavior such as light user(LU) medium user (MU) and
heavy user(HU) should demonstrate that market segmented based on usage rate results in increase customer patronage
(Davis and Heinekes, 2003). A single heavy user typically might spend heavy naira value on products of the company.
When the goal associated with segmenting market base on user rate most especially on heavy user of the product, this will
most likely bring about more money and that’s what market the cash registers ring (Gray and Armstrong, 2004; Rick 2011;
Show, 1998.) thus:
Hypothesis 2:
Segmenting a market base on usage rate in the form of light user,
medium user and heavy product user, will results to good marketing
success (profitability, sales growth, customer satisfaction).
Market can be segmented base on consumer loyalty. Consumer can be loyal to product can be divided into groups according
to their degree of loyalty (Gray and Armstrong, 2004).several studies have emphasized the importance of segmenting
market base on loyalty status (e.g, Gregoire and Tripp, 1995) a model that is often used to explain behavioral-based
segmentation in term of loyalty status (Bagozzi and Martin 2006). This model includes three general concepts; brand
loyalty, stores loyalty and company loyalty. The inclusion of brand loyalty represents an important addition to the model.
Consumers are completely loyal-they buy one brand all the time. Others are somewhat loyal-they are loyal to two or three
brand of a given product or favor one brand while sometime buying others. A company can learn a lot by analyzing loyalty
patterns in its core consumer, and detect which brand are most competitive with its own, and this will enable the company to
improve its positioning strategy which will lead to effective marketing performance. By segmenting a market base on
loyalty status, company can see customers who are shifting away from it brand, the company can learn about its marketing
weaknesses (Blane, 2007). Once this is done, the firm can adopt an appropriate corrective measure where marketing
weaknesses will be converted in to marketing success. Micah (2005) also demonstrated that non-loyal customers of the
product, the company may by appropriate strategy attract them by putting its brand on sale. When this is done, the non-loyal
consumers will be more likely loyal customers (Kelly and Johnbull, 2006). Thus,
Hypothesis 3
Segmenting a market base on loyalty status in terms of loyal to brand, stores
And company will result to: (a) higher customer loyalty and passion (b) given a
Positive segmentation, company can improve its positioning strategy against
competitors than those that do not.
The Role of demo-psychographic Influence
Demo-psychographic factors are primary drivers of the behavior-based segmentation, there remains the question of how this
factor moderate the influence of this segmentation dimension on effective marketing. Katty and Sonks (2004) examined the
effect of demographic factor on behavior-based segmentation. They investigate the impact of family life-cycle in terms
single men on usage rate. A single heavy user, typically a single male, who doesn’t know how to cook, might spend much
money a day visit the food centre as many as possible. Heavy users come more often, they spend more money thereby
increase cash sales of the company. Katty and Sonk’s study finds that family life cycle moderate the success. To this finding
may be the result of repeated purchase by the heavy user of the product. Customer repeat purchase results in increase in
sale volume and profitability of the company.
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These findings are consistent with the view that family life cycle which is a demographic factor moderate the influence of
behavioral based segmentation on effective marketing performance outcomes. Thus, the few studies that have examined
demo-psychographic effect within behavioral context suggest that family life cycle has the potential to influence marketing
success. Such influence, however, appears to be contingent on the degree of the demo-psychographic factors. While these
studies are useful and indicate an important role of demo-psychographic effect on the influence of behavioral based
segmentation on marketing success, they do not examine the extant of the moderating the demo-psychographic variables,
nor do they examine the explicative effect in other context. In fact, Katty and Sonks (2004) demonstrated the moderating
effect of demo-psychographic factors on the influence of behavioral variables of segmenting the consumer market. There is
also reason to hypothesize the relationship between the moderating effects of demo-psychographic factor on the influence of
behavioral based segmentation on marketing success. Thus:
Hypothesis 4a:
Social class will positively moderate the influence
of usage rate and loyalty status on marketing
success.
Hypothesis 4b:
Family life cycle as a demo-psychographic factor, will significantly moderate
the influence of benefit sought and usage rate on effective marketing
performance outcomes.
Marketing Success
The question of what determines marketing success has the subject of a considerable amount of research in marketing
(Colin and Wilson, 2008). For the purpose of this work, we will limit ourselves to an overview of the sorts of factors that
contributes to the success of marketing activity. Although it is tempting to identify the characteristics of marketing success
and to believe that the straightforwardness adoption of these will lead to business success, it is also potentially simplistic
and dangerous since it can lead the view that this formula for success. Nevertheless there are certain elements that appear to
contribute to effectiveness, and it is in this way that we stated below the various dimensions of marketing success.
A market is said to be effective with a strong customer orientation across all aspect of the business and a fundamental
recognition of the important of the customer (Brown, 2006). With a better customer focus and delivery of superior value
customer will be satisfied, therefore customer satisfaction is one of the dimension of measuring marketing success. The
issue of customer orientation has been discussed by Doyle (1994) in terms of what he refers to as left and right-hand
organizations. Satisfied customers are the source of all profit and shareholder value. Customers can choose from whom they
buy, and unless the firm satisfies them at least as well as competitors, sales and profits will quickly erode. Customer
satisfaction should therefore be a prime objective and measure of the performance of marketing (Doyle, 1994).
The market-driven organizations have their primary focus the objective of satisfying customers. This involves defining and
understanding market segment, and then managing the marketing mix in such a way that customers’ expectations are fully
met or exceeded. A customer focus organizations has customer satisfaction has its hallmarks. A satisfied customer remains
loyal to the organization and serves as an advocate; this will increase the sales growth and profitability of the organization.
These serve as measures of marketing effectiveness (Thomas, 2008).
The section that follows reports the designs and results of a study that tested these hypotheses.
METHOD
The populations for this study consist of customer of fast food restaurants in Nigeria; we selected the fast food restaurant
firm in four big cities in Nigeria as the context for our research study. The cities were Port Harcourt, Lagos, Kano and
Abuja, these cities were selected because they represented places where this business is successfully operated, and with the
nature of the industry we constructed our sampling frame using multiple sources. We obtained a list of fast food restaurants
from the Nigeria chamber of commerce and industry. This process resulted in a sampling frame of 250 firms.
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Data collection
We combined qualitative and quantitative research approaches. The qualitative part was intended to provide foundation for
the quantitative study. We designed and conducted it to verify and validate the homological net, which served as a check to
ensure that the model was appropriately bounded. Secondly, the qualitative approach aided in questionnaire development,
verifying basic approach to operationalizations and providing the basis for item refinement, finally, the qualitative
component involved pretesting the questionnaire. For the qualitative component, we interviewed senior managers from four
(4) fast food restaurants located in Port Harcourt, Lagos, Kano and Abuja in Nigeria; each interview lasted between 20
minutes and 30 minutes. The results indicate that the conceptual model adequately represented the determinants of
marketing success, and basic operations were appropriate. For pretesting, we administered the questionnaire to 10
participants and observed first hand completion time; obstacles in the questionnaire flow, and comprehension problem in
items or instruction.
On completion of the questionnaire, we debriefed the respondents to refine the questionnaire further.
The main data collection proceeded in several steps. Our field interview in the fast food restaurant firm revealed that the job
title of the executive who was most knowledgeable about strategy implementation varied widely from one firm to another.
Thus, we identified the key informant for each firm by telephone contact. In some firms, the key informants were marketing
managers, in others, they were customer service managers and in still other, the chief executive officers were the key
informants. The screening phase yielded 300 potential respondents. The next phase of data collection consisted of a pre-
notification letter that reminded respondents of their agreement to participate and notified them of the coming survey
package. In a week later the mail survey commenced: the survey package included a cover letter that described the content
and assured confidentiality with a N2, 000 attached as a response incentive, a copy of the questionnaire, and a postage-paid
self-addressed return envelope. We also support by sending an identical survey package, which we mailed 2 week later to
respondents who had not responded.
The data collection yielded 200 responses, 156 were usable, for a response rate of 52% in terms of sample composition, 20
percent of the responses were nationally recognized fast food restaurants found in the four cities of Port Harcourt, Lagos,
Kano and Abuja, and the remainders were locally-based firm. This composition mirrors the industry split and indicates that
our data represents the fast food firm reasonably well in Nigeria.
Measures
The model presented in figure I included six concepts. The choice of benefit sought concept as an attribute for behavior-
based/segmentation is unique in our model. Several studies has shown that benefit sought can be express as quality of
service needed (e.g. Peterson 2003) thus, we include item like service, economy, convenience and speed as benefit sought
from product (Shaley et al. 2005).user rates was measured using three items that were almost identical to the items used by
Nwachukwu (2001).the measure of loyalty status was almost identical to the measure applied by Nwachukwu (2001) and
Bekawa and Charles (2003). We measure social class using four measure of social class, the items were similar to those
used by Davidson (1998). Family life-cycle was measure by three items similar with the work of Peters (2005). Finally, we
measure marketing success using a four-item that we adapted from Badoka (2004) study. All the above measures are
represented in Table 1
The participants indicated their agreement with a set of statement using a 5-point Likert-type scale that ranged from strongly
disagreed to strongly agree. The mean, standard deviations and reliabilities of the variable of studies are shown in table 1.
The reliability of family life-cycle in the study was lower than the acceptable /75 limit that Nunnally (1978) suggested. For
other variables, the reliability was acceptable (see table 1).to test the discriminate and convergence validity of the variables
in our model we included all item in a factor analysis (basic component) that included six factors, the analysis showed the
factors explained 83 percent of the variance in the material (see table 1).
We find that the convergence validity of benefit sought scale was somewhat low, with a factor loading of .58 for the first
item (see table 1). This item also has low discriminate validity, with a factor loading of .33 on the marketing effectiveness
factor. Thus, to investigate the reliability and validity of our variables further, we applied the procedures that Agarwal and
Karahanna (2000) suggested, we estimated our complete measurement model using Amos 4. We calculated inter variable
correlations, shared variances, and composite reliability, which we show in table 2.
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Results
Data must be subjected to statistical test before it can convey any significant meaning. We therefore present the results of
the statistical test of the hypotheses in this section. The correlation metric in Table 2 shows the relationship between
behavior-based segmentation and marketing effectiveness.
To test hypotheses 1, which posits that segmenting a market based on benefit sought customer expectation and hope will
have greater effect on marketing success. The hypothesis sought to examine the relationship between BS and ME. We used
the spearman’s rank correlation technique to test the hypothesis. The result (rho 0.265 P<0.05)(see table 2) shows that
there is a significant and positive relationship between benefit sought and marketing success.
Several reasons may account for this significant positive relationship. To begin with as pointed out in the study, managers
tend to look for ways to improve their company’s profit as it is often used to assess their performance. To remain in
business and make profit, organizations segment their market based on benefit sought, customer expectation and hope once
this is done, organization serves the market segment with product and services that are of benefit to the customers. The
finding indicates that segmenting market based on benefit sought will be more profitable than those that do not segment
their market base on customer benefit, customer expectation and hope.
We used the spearman’s rank correlation technique to test Hypothesis 2. The result (rho ꞊ 0.387 P > 0.05) (see table 2) show
that there is a relationship between usage rate and marketing success. This implies that segmenting a market base on usage
rate I terms of light users, medium and heavy users will result to good marketing success. The result implies that
segmenting a market base on usage rate and marketing success depend on one another. While market segmentations base on
usage rate refers to dividing the market into light, medium and heavy product users. Marketing success is the ability on the
part of management to survive. We therefore accept the hypothesis which states that, segmenting a market based on usage
rate will results to good marketing success.
To test Hypothesis 3, which posits that segmenting a market base on loyalty status in terms of loyalty to brand, loyalty to
stores and loyalty to company, will result to higher customer loyalty. The result (rho ꞊ 0.369, P > 0.05) (see table 2) shows
that there is significant positive relationship between loyalty status and marketing success. This means that marketing
success will be higher with higher loyalty status. The literature review of the present study suggested a positive relationship
between loyalty status and marketing success (Kotler and Armstrong, 2004), several reasons may account for this
significant relationship. Dividing buyers into groups according to their degree of loyalty will affect marketing success.
Some consumers are completely loyal-they buy one brand all the time. A company can be more effective by analyzing
loyalty patterns in its market. We therefore accept the hypothesis. The finding suggests that fast food restaurants that study
its customer loyalty status and marketing success.
In Hypothesis 4a to 4b, we hypothesized that social class will positively moderate the influence of usage rate and loyalty
status on marketing success (hypothesis 4a), we also suggests that family life cycle will moderate the influence of benefit
sought and usage rate on marketing success (hypothesis 4b). Test results in table 2 reveal that SC will positively moderate
the influence of UR and LS on ME and also same for FLC on BS and UR on ME. We have offered our interpretations of the
results on the moderating variables and their roles in the relationships between behavioral-based segmentation and
marketing success.
Dicussion And Implication
In this paper, we attempted to offer some understanding on marketing success through behavioral-base segmentation
perspective. We advanced dimensions of behavioral-based segmentation, identified the dimensions segmentation, and tested
their influences on marketing success outcomes specific to fast food Restaurant Company. We conceived social class and
family life cycle as moderating the influence of behavioral-base segmentation on marketing success. Thus, we took a view
of marketing success in the fast food business and we posited that managers should focus on business-related metrics to
access their marketing success in the fast food restaurants business. Our results indicate notable findings with respect to
segmenting markets based on behavioral perspective.
Our result show that segmenting markets based on benefit sought, expectations and hope, is critical for an organization to
deliver superior value to its customers. In this customer-driven and dynamic market environment. There is a pay off in
delivering values to a particular market segments base on benefit sought, when customers buy value. They are satisfied and
satisfied customers make a repeat purchase which result to increase in sales growth and profitability. We argued that
segmenting a market based on usage rate provides the firm with the ability to take advantage of market opportunities. Our
results show that, as we hypothesized, the interplay between user rate and family lifecycle is quite complex. Segmenting a
market into light medium and heavy product users will enable the firm to take advantage of heavy users. Heavy users are
often a small percentage of the market but account for a high percentage of total consumption. A young single who doesn’t
know how to cook, might spend as much as ₦5,000 in a day at fast-food restaurant and visit more than 20 times a month.
Heavy users come more often they spend more money. Firms do all they can do to keep them satisfied with every visit they
also target light users with their advertisement and promotions thereby increasing their marketing success.
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While we do not find statistical support for the interaction between loyalty status and family-life cycle, the results indicate
marginal evidence (rho 0.051 P > 0.05) that dividing buyers into groups according to their degree of loyalty, the more
likely its marketing success. This reiterates the common notion that, by studying its less loyal buyers, the company can
detect which brands are most competitive with its own, and it will enable the firm to position its brand. Finally, our study
also documents the impact of social class and family life cycle on the influence of behavior-based segmentation on
marketing success. Demo psychographic variable (social class and family life cycle) moderate the effect of behavioral-
based segmentation (benefit sought, usage rate and loyalty status) on marketing success (profitability, growth, customer
satisfaction), thus enhancing the firm’s survival.
Contribution and Implication
Our research provides several insights for managers who want to implement competitive strategies. First, a focus on
behavioral-based segmentation would provide the requisite impetus required for marketing success. We recommend that
managers should use multiple segmentation based rather than limiting their segmentation analysis to only one or a few
variable. However, fast food industry will need to make structural adjustment to institutionalize these multi-segmentations
techniques.
We identify, conceptualized and measure three dimensions for behavioral based segmentation and use data from the fast
food restaurants to contribute new empirical insights. Our notion of examining marketing success from segmenting market
based on behavioral perspective brings forth the theoretical insights of the fast food industry, in that segmentation of the
market into benefit sought, usage rate, and loyalty status gives the firms appropriate competitive strategy to compete in the
ever changing market that is customer-driven. Finally, we extend the literature on family life cycle by developing and
testing a valid and reliable measure of family life cycle. We advance a framework for managers to understand how to
deliver value to their customer by segmenting market based on benefit sought, customer expectation and hope. When
customers buy hope, benefit and expectations they become satisfied. When customers are satisfied, they make repeat
purchase and increase sales growth and profitability. Once these behavioral variables are properly segmented, managers can
tap into them and execute strategies that will result to marketing success.
Future Research
The fast food industry provided a worthwhile setting for this article; therefore the behavioral bases of segmentation involve
(e.g.; benefit sought, usage rate, loyalty status) are particularly relevant. However, the setting is relevant unique and thus
ensure generalizability. The effect of behavioral-based segmentation should be examined in other business areas like; banks,
tourism, cinema, schools etc. thus, the pattern of findings exhibited in this study need to be replicated in other business
contexts.
With respect to measurement of market effectiveness variables, our study is limited to subjective measures of effectiveness
based on key informant data, therefore, the result are constrained by issues related to common method variance. Subjective
measures based on key informant data could also suffer from bias. Given that new and improved objectives measures of
marketing success are now available, future research using objective data could add value to our findings. Future study
should consider a longitudinal study to delineate more clearly the causal attributions hypothesized in our model.
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Ganesan, S (1999), “Determinants of Long-Term Orientation in Buyer-Seller Relationship” Journal of Marketing Vol. 58,
P.1-19
Figure 1 CONCEPTUAL BACKGROUND
Behavioral
-
Based
Segmentation
Benefit Sought
Usage Rate
Loyalty Status
Marketing Effectiveness
Customer
Satisfaction
Customer Loyalty
Profitability
Sales Growth
Family life
-
cycle
Source: Researcher’s review of literature, 2011.
Demo
-
psycho
graphic
H
4
a
H
4
b
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
64
TABLE 1
Basic Components Analysis of all Measurement Items
Variable/communalities(c)and loadings C 1 2 3 4 5 6
5
Benefit sought
I need quality product .75 .20 .18 .11 .15 .58 .33
Using ”service” as benefit sought .70 .21 .16 .10 .13 .75 .07
Economical .92 .24 .15. .12 .16 .88 -.09
Convenience .86 .23 .17 .09 .17 .81 .10
Speed .96 .25 .20 .13 .14 .90 .10
1
User rates
Light user .69 .20 .15 .10 .12 .09 .11
Medium user .70 .21 .16 .12 .11 .10 .12
Heavy user .98 .23 .18 .09 .10 .11 .13
4
Loyalty status
Non-loyal .71 .24 .16 .11 .09 .12 .14
Medium loyal .85 .23 .14
.12 .08 .12 .09
Strong loyal .82 .20 .12
.10 .10 .10 .10
absolute loyal .88 .17 .13 .09 .07 .08 .12
3
Social class
Lower lower .75 .20 .17 .09 .14 .16 .04
Upper lower .80 .21 .16 .08 .12 .17 .06
Working class .82 .22 .19 .10 .10 .15 .08
Upper upper .99 .24 .16 .06 .09 .14 .10
2
Family life cycle
Young single .74 .21 .18 .07 .12 .12 .07
Married with no children .67 .23 .16 .05 .10 .10 .09
Married with children .80 .24 .20 08 .11 .13 .10
6
Marketing effectiveness
Customer satisfaction .90 .20 .16 .09 .08 .09 .08
Customer Loyalty .83 .25 .17 .12 .06 .07 .10
Profitability .97 .21 .13 .11 .05 .10 .12
Sales Growth .90 .20 .14 .09 .07 .13 .11
Eigen valves 10.70
3.63 1.81 1.35
1.00 0.60
Variance explained 52.60 11.30 6.85 4.93
2.95 2.35
Mean 3.21 4.40 2.43 3.61
3.72 2.25
Standard deviation 1.70 1.68 1.80 1.50
1.40 2.00
Cronbach’s alpha 0.92 0.90 0.86 0.82
0.95 0.77
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
65
Table 2
Inter variable Correlations Shared Variable and Composite Reliabilit-y
Variable Statistics
Behavioral
Based
Segmentation
Benefit
Sought
Usage
Rate
Loyalty
Status
Marketing
Effectiveness
Customer
Satisfaction
Customer
Loyalty
Profitability
Sales
Growth
Marketing
Variable
Social
Class
Family
Lifecycle
Spear
man
Behavior
-
based correlation coefficient
Sig (2-tailed)
rho Segmentation N
1.000
156
.83
.90
.86
.92
.77
.95
.88
.92
.75
.96
.90
Correlation coefficient
Benefit sought sig. (2-tailed)
N
.512**
.000
156
1.000
156
Correlation coefficient
Usage Rate sig. (2-tailed)
N
.630**
.000
156
.297**
.001
156
1.000
156
Correlation coefficient
Loyalty Status sig. (2-tailed)
N
.735**
.000
156
.200*
.027
156
.125
.212
156
1.000
156
Correlation coefficient
marketing sig. (2-tailed)
Effectiveness N
.12
6
.130
156
.265
**
.003
156
.387
**
.000
156
.369**
.412
156
1.000
156
Correlation coefficient
Customer sig. (2-tailed)
Satisfaction N
.141
.111
156
.234
**
.007
156
.344
**
.000
156
.082
844
156
.231
**
.000
156
1.000
156
Correlation coefficient
Customer sig. (2-tailed)
Loyalty N
.109
.216
156
.256
**
.003
156
.224
*
.010
156
.512
**
.005
156
.410
**
.000
156
.371
**
.000
156
1.0
00
156
Correlation coefficient
Profitability sig. (2-tailed)
N
.014
.870
156
.062
.482
156
.016
.074
156
.421**
.300
156
.420**
.000
156
.171
.081
156
.153
.081
156
1.000
156
Correlation coefficient
Sales Growth sig. (2-tailed)
N
.201
.003
156
.300
.000
156
.016
.006
156
.111
.000
156
.312
**
.000
156
.101
.000
156
.125
.001
156
.125
.000
156
1.000
156
Correlation coefficient
Moderating sig. (2-tailed)
Variable N
.391**
.000
156
.201
**
.001
156
.182
**
.001
156
.250
**
.004
156
.421
**
.000
156
.535
**
.020
156
.612
**
.001
156
.213
.000
156
.612
**
.002
156
1.000
156
Correlation coefficient
Social Class sig. (2-tailed)
N
.125
.004
156
.102
.023
.156
.111
**
.003
156
.312
**
.121
156
.072
.005
156
.113
.003
156
.029
.007
156
.031
.000
156
.015
.000
156
.234
**
.008
156
1.000
156
Correlation coefficient
Family-life sig. (2-tailed)
Cycle N
.284
**
.000
156
076
**
.150
156
.1
52
**
.321
156
.0
51
.000
156
.137
**
.007
156
.122
**
.033
156
.162
.022
156
.089
.212
156
.212**
.000
156
.195
**
.026
156
.141
**
.004
156
1.000
156
Source: survey date, 2011
Key: ** correlation is significant at the 0.05 level (2-tailed)
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