The Marketing Book 5th Edition

Repeat Patronage

High Low

Loyalty Latent

Loyalty

Spurious No

Loyalty Loyalty

High

Relative Attitude

Low

Market segmentation 275

alternatively, there is low patronage but
strongly differentiated and positive attitudes
toward A, this is ‘latent loyalty’. Otherwise,
expected high patronage in this case might be
inhibited by co-shoppers’ preferences, for
example (Figure 10.7).
When it comes to real loyalty itself, it is
clear by now that they see this as where there is
both high patronage and a positive attitude
toward the store which is not matched by
similarly positive attitudes toward alternative
stores. These potential market segments which
marketers would want to progress toward are
shown in the upper left quadrant of Figure
10.7.
However, the segmentation metrics descri-
bed above can easily identify those individual
customers who are regular purchasers, but
cannot, without more affective data being
collected, combine this with the ‘relative atti-
tude’ dimension. This is an important point
that is further explored next.

Behavioural vs affective relational

segmentation

As discussed, we are seeing moves toward one-
to-one targeting in terms of personalized offers
based on mining previous buying biographies.
However, needs and benefits sought by cus-
tomers are not always considered to be as
important. Some organizations are rejecting the

more affective research in favour of purely

behavioural data. For example, the JIGSAW

consortium, composed of Unilever, Kimberley

Clark and Cadbury Schweppes, has been pool-

ing transactional data on their respective cus-

tomers in order to grow product categories and

to combat the power of intermediary retailers.

This consortium has decided not to bother with

attitudinal customer data any more and base

their segmentation decisions on the massive

amount of behavioural transactional data they,

collectively, possess.

This is reinforced by Mitchell (2001a), who

recently quoted a director of one of the largest

retailers in the UK:

We’ve given up trying to understand our

customers... helping us cut a lot of complexity

from our business.

The favoured approach by this company, ‘sense

and respond’ (Haeckel, 2001), is to react quickly

on the basis of customer contact via call centres,

the Internet, interactive digital TV and others.

This is understandable in the current context of

short-termism. For example, the pressure to

achieve short-term profit in order to provide

shareholder value, again in the short term, can

lead to a subordination of the key components

of the marketing concept itself, namely cus-

tomer satisfaction. The potential (or current?)

danger is that the understanding of customer

behaviour for segmentation and targeting strat-

egies is not being driven too mechanistically by

behavioural data. As Shaw et al. (2000) note:

Market segmentation should be driven by

customer needs and wants... these techniques

are well understood in the academic world but

corporate practice seems to be in the dark

ages.

This is also reflected in studies into customer

relationship marketing. Gofton (2001) reports

that Qci found that few organizations dis-

tinguish between the satisfaction levels of their

most and least valuable segments:

Figure 10.7 Loyalty segments
Source: Dick and Basu (1994).