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market segmentation

involves aggregating prospective buyers into groups that have common needs and will respond similarly o a marketing action

market segments

the relatively homogeneous groups of prospective buyers that result from the market segmentation process

one product and multiple market segments

when an organization produces only a single product or service and attempts to sell it to two or more market segments, it avoids the exra costs of developing and producing additional versions of the product

Multiple Products and Multiple Market Segments

when an organization produces multiple products or services and attempts to sell it to two or more market segments

mass cusomization

tailoring goods or services to the tastes of individual cusomers on a high-volume scale

potential for increased profit (substantial)

maximizes the opportunity for future profit and return on investment

similarity of needs of potential buyers within a segment (homogeneous within)

potential buyers within a segment should be similar in terms of common needs that, in turn, leads to a common marketing action, such as product features sought or advertising media used.

difference of needs of buyers among segments (heterogeneous beween)

if the needs of the various segments aren't very different, combine them into fewer segments. a different segment usually requires a differen marketing action that, in turn, means greater costs.

potential of a marketing action to reach a segment (operational)

reaching a segment requires a simple but effective marketing action. if no such action exists, don't segment

geographic segmenaion

Region, city size, statisical area, media-television, density

demographic segmentation

gender, age, race/ethnicity, life stage, birth era, household size, marital status, income, educational, occupation

psychographic segmentation

personality, values, lifestyle, needs

behavioral segmentation

retail store type, direct marketing, product features, usage rate, user status, awareness/intentions

usage rate

the quantity consumed or partonage-- store visits-- during a specific period

frequency markteing

focuses on usage rate

80/20 rule

concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers

market-product grid

a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization

product positioning

the place a product occupies in consumers' minds on important attribues relative to competitive products

product repositioning

changing the place a product occupies in a consumer's mind relative to competitive products

perceptual map

a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers percieve competing products or brands, as well as its own product or brand

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