Segmentation and Targeting

Question 1

segmentation and targeting help us find

Answer 1

 Who is not a customer
 Who is not a competitor
 What is and is not important for success

Question 2

Segmentation

Answer 2

• Dividing total potential market into groups that customers are similar within group based on same set of characteristic and different between groups
• Potential market does not equal target segment

Question 3

Segmentation Applications

Answer 3

Short-term
o Marketing mix decisions

Long-term
o New an devolving market segment to serve

Question 4

Steps to managing segmentation

Answer 4

1. Define the segmentation problem
   a. Why are you doing this segmentation? Are you targeting the wrong customers?
   b. What resources do we have and that we need to build to solve problem
   c. Internal assessment planning
2. Identify data needs
   a. Primary and secondary data
3. Conduct market research
4. Build segmentation database
   a. attributes
5. Define market segments
   a. Use the attributes
   b. This segments cares about price or this one cares about variety
6. Describe market segments
7. Implement results
   a. Making changes to your marketing mix

Question 5

1. Define Segmentation Problems

Answer 5

Internal assessment and planning
 Objectives of segmentation (critical step)
 Resources
 Constraints

Database review
 Primary data available
 Secondary data available

Question 6

3. conduct market research if needed

Answer 6

Qualitative study
 Interviews

Quantitative study

Question 7

4. Build segmentation database

Answer 7

Assemble different data sources with two types of data

1. Segmentation variables (bases)
    Characteristics that tell us why segments differ
    Ex: needs, wants, benefits, solutions, problems, usage situation, usage rate,
2. Discriminate variables (descriptors)
    Characteristics that tell us about the socio-demographics
    Age, income, profession, location

Question 8

5/6. Define/Describe market segment

Answer 8

o How many segments
o How are they defines (segmentation values)
o How are they describes (discriminate variables)

Question 9

Why Targeting

Answer 9

• Need to target based on match between resources and what they customers want

Question 10

how to measure appeal of segment (targeting0

Answer 10

• Overall appeal of that segment (external opportunity)
  o Size growth rate
  o Margins, revenue
  o Volumes
• Relative advantage of the firm to serve this segment (internal strength)
  o Access channels
  o Brand, reputation
  o Product, service fir
  o Production capabilities