Heavy Users Case Study

The assignment was about using the behavioral segmentation when doing an advertisement, while considering heavy users. In order to do so, we firstly have to clearly understand what an heavy user is. As the name indicates, heavy users are the small segment, mostly consisting on one third of the population or consumers, who account for the biggest part of the sales of a particular product, which more precisely consist of two thirds of the product’s category revenues. The heavy users, also consider as heavy buyers, or high rollers, are the ones which represent the well known concept of 20/80 law, meaning 20 percent of the population will account for the 80 percent of the sales revenues on a specific product.

After all this being explained, it

The reason why heavy users are a wise choice as a target is obvious. From the company point of view, this is the target group from which the company would profit the most, since they buy the major part of the product of a specific category, in this case the breakfast cereals. As explained in the beginning paragraph, the 20/80 law is a big reason for companies to target this group which is with no doubt, the one the company is profiting the most from. On the other side, there are a lot of skeptics and critics which do not agree with this perspective or at least doubt it and in some parts of the theory I also join them. Why the critics doubt the profits made from this target, is that they consider the heavy users to be deal prone and seeking the lowest prices, which makes them not loyal customers to the brand or product they buy. This stands behind the idea that having this kind of customers today when you have a low price to offer is not something you can hold on to, because you will immediately lose them when your prices may be a little bit higher, or when a competitor will offer lower prices. So we can definitely say that heavy users are not always as profitable as them may seem in a general perspective without a detailed analysis. Yes they do generate large sales, yes they also usually are highly profitable, but the question is, are they prone to be loyal to the brand? The answer is no, and this is clearly presented by