Value Based Market Segmentation

When asked what they want while buying a product most consumers reply they want value for money. For most consumers this means products that give them higher benefits at lower prices. Yet, the same consumers tend to avoid cheaper products. This is because the consumers perceives these products to be of a lower quality and prefer to buy slightly more expensive products which they believe are of a better quality. Thus how a consumer perceives a product is the most important factor when it comes to whether the product will sell.

We as consumers too have our own ideas of what value for money is. I have tried to show my perception of the products I see around me every day in the form of a grid.

	Low Benefit	Same Benefit	High Benefit
High Price	I-pod	i-phone	Airline services
Same Price	Lays	Colgate	Pg accommodation
Low Price	Local trains	Xiaomi	Jio

• I-pods are expensive, however, in the era of smartphones, a device that only stores music is not of much use. Thus I believe ipods belong to the high price low benefit category of products.

• I-phones too are pretty expensive, most Apple supporters buy iphones due to the quality of their cameras, voice recorder and display. However, Xiaomi Poco has the same features at a much lower price.  Thus according to me iphones belong to the high price same benefit category of products.

• Airline tickets from Bangalore to Kolkata are twice as expensive as Railway tickets. However, a flight saves a considerable amount of time. While a train journey takes over 2 days, a flight takes 5 hours. Since time is money, Airline services belong to the high price high benefit category for me.

• Lays is notorious for selling chips packets with almost no chips. However, almost all chips brands have similar prices. Thus buying any other brand would be more cost effective since the consumer would get more chips for the same price. Thus I categorize Lays chips as a same price low benefit product.

•  Colgate and Pepsodent are sold at about the same price and both of them have the same benefits. Thus I place both these products in the same price same benefit category.

• PG accommodation comes is almost as expensive as renting a one room apartment in Bangalore. However, PG accommodation comes with food as well as services such as room cleaning and laundry. Thus PG accommodation is a same price high benefit product for me. However, some people prefer the privacy of their own apartment. In this case the perception of the product changes and PGs seem to be same price low benefit products to those who prize their privacy.

• Platform tickets for local trains are substantially cheaper than chair car tickets from Chennai to Bangalore. However, local trains are usually overcrowded and there is usually no place to sit. Thus I believe local trains to be low benefit, low price products.

• Xiaomi phones come at low prices yet have the same benefits as phones that have much higher prices. Thus they belong to the same benefit low price group of products.

• Jio prepaid plans come at low prices and have higher benefits than its competitors such as Vodafone. For example, Jio allows unlimited internet use for its customers. Thus it falls into the low price high benefit product category.