Chapter1 Introduction
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Research Background and Motives
Though the general approach of segmentation was developed and significantly elaborated a few decades ago, there are numerous further research possibilities in this area.
No matter in academic or practice, the concept of market segmentation is always important and capable in marketing field. Traditionally, market segmentation be regarded as the basis of marketing strategy, practitioner can’t enforce effective marketing communication on subject without forming an appropriate strategy, or what Kolter called “STP” (Segmentation, Target, Positioning).
But consumer market is dynamic and changeful; firms can’t always take the “old trick” all the time. Since last century, a numerous and substantial inventions have changed the world, such as mobile phone, computer, internet, and so on.
Contemporary enterprises must actively to accommodate new techniques, new competitive environment, new consumer behavior, and develop diversified competitive modes. For example, the appearance of Internet changed the most of the world we live: the information-searching behavior we used to be, the way we communicate with others, the action we usually take, and the sought we possess. On the other hand, the continuously developing techniques generate implicit possibilities and challenges for existent market, for our objective: the application of physical attribute in marketing.
Biotechnology was deemed the next promising industry following information technology and telecommunication industry. In past decades, we can see that
biotechnology has enormous market growth, through the gradually development of method and technique. Market capitalization of this area has grown up for decades (see exhibit 1), and expect to speed up in this century.
Figure 1 Market capitalization of biotechnology industry, 1994-2005
Sources: Ernst & Young LLP, BioWorld
According to BIO’s1 statement, the biotechnology industry originated in the 1970s, based largely on a new recombinant DNA technique whose details were published in 1973 by Stanley Cohen of Stanford University and Herbert Boyer of the University of as California, San Francisco. The relevant industries of biotechnology involve medicine, agriculture, environment, energy, and marine, this area includes numerous and various product and service. Although the development of biotechnology still moves on lively, we can’t find the application in marketing field yet.
1. The Biotechnology Industry Organization (BIO) was founded in 1993 to represent biotechnology companies at the local, state, federal and international levels. As of December 2006, BIO's membership consisted of more than 1,100 biotechnology companies, academic centers, state and local associations and related enterprises.
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Simply speaking, biotechnology is a technology based on biology, by definition of United Nations Convention on Biological Diversity, “Biotechnology means any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use.”
Biotechnology is an interdisciplinary science; it involves genetics, molecular biology, biochemistry, embryology and cell biology. Among these disciplines, our interest is going to explore the genetic possibility in marketing field, which means market segmentation.
One of the most well-known biotechnology relatives is genetics. Since the announcement of working draft of the genome by HGP2 (Human Genome Project) in June 2000, it seems that genetic relatives will grow dramatically in this century. It certainly will, but there are a number of problems and disputes exist. That is, in other words, researchers or practitioners who interested in this area still have enormous room to explore, confirm, research, and utilize.
The development of information technology encourage the breakthrough of many disciplines, such as bioinformatics, which is defined as “ research, development, or application of computational tools and approaches for expanding the use of biological, medical, behavioral or health data, including those to acquire, store, organize, archive, analyze, or visualize such data” by NIH (National Institute of Health). Therefore, this research is trying to further explore the possibility of physical attributes applying in market segmentation, and discuss the relationship between different consumer typology which is segmented by lifestyle and consumer innovativeness, then check the external validity by real purchasing behavior.
2. The Human Genome Project (HGP) is an international scientific research project. Its primary goals were to determine the sequence of chemical base pairs which make up DNA and to identify the approximately 25,000 genes of the human genome.
The project began in 1990 and supported by governments such as U.S, England, France, Japan and so on. A working draft of the genome was released in 2000 and a complete one in 2003, with further analysis still being published.
Innovativeness, Roehrich (2004) thought that it is the more well-defined among marketing concepts. What we discuss here is consumer innovativeness, or”
consumption of newness,” which is the tendency to buy new products more often and more quickly than other people (Midgley and Dowling, 1978). In early periods, Rogers propose the famous definition, which define someone is an innovator or not by the time-of-adoption method, but this method was criticized for both in theory and methodology (Midgley and Dowling 1978; Hurt et. al. 1977). Though there are some disputes between different researchers, the significance of the innovativeness issue is undoubted, especially when the new products are created and launched consistently in modern society.
Today, it’s necessary for companies to continuously launch new product due to the more and more competitive market. In the past, marketing managers used various segmentation bases to segment heterogeneous consumers, then profiling these clusters to further understand consumer pattern. Now, it seems like the market segmentation issue can go forward by the achievement of the genetic study. Through the development of information technology and biotechnology, we can acquire more detailed gene information from each animal, plant, and human.
In studies of genetic disease, H. Cummins (1936) first found the patient of Down syndrome own unusual fingerprints combination. Galton (1892) and Wilder (1902) investigated the genetic-based derma, and thought the epidermal ridges were affected by gene. Then we believe the accomplishment of draft of genome will encouraged more and more scientists to explore the cause between physiology, psychology and behavior. It was argued that each fingerprint characteristic was controlled by polygenic inheritance and the environment of womb mutually. Therefore, partial
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information of genome can be observed through external fingerprints, and we could analyze the variation of consumer behavior from observed physical attribute:
fingerprints.
Another contribution this study made was to validate the capability of physical attribute in consumer innovativeness. For example, if there is one company which sell innovative goods or novel service, the manager must wants to know how many people will interested in company’s goods or service, and where are these customers. As a result, this method was different from previous “questionnaire,” which might be counterfeited by respondent; physical attribute would provide more direct, effective measurement.