prelim 2 review

prelim 2 review - Prelim 2 Review I Segmentation Market...

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Prelim 2 Review I. Segmentation Market segmentation: aggregating prospective buyers into groups with common needs and will respond similarly to a marketing action – relatively similar consumption behavior Product differentiation: firm uses different marketing mix activities such as product features and advertising to help consumers perceive the product as being different and better than competing products Segmentation because our market is no longer one-size-fits-all Strategies/Rationale: increase sales, although it may increase costs o One product, multiple market segments Avoids extra costs of developing and producing additional versions of the product Avoids research, engineering, manufacturing expenses Vs. incremental costs of taking the product into new market segments, such as separate promotional campaign Vs. costs for developing a new product o Multiple products, multiple market segments If it meets customers’ needs better or doesn’t reduce quality or increase price, this works Different variations of same product to high-end or low-end segments o Mass Customization Tailoring goods and services to the tastes of the individual Internet ordering o Customer Relationship Management vs. Synergies Synergy: increased customer value achieved through performing organizational functions like marketing or manufacturing more efficiently More products, better quality, lower prices Steps in segmenting and targeting markets o Step 1: Group potential buyers into segments Criteria to use in forming segments Simplicity and cost-effectiveness of assigning potential buyers to segments Potential for increased profit Similarity of needs of potential buyers within a segment Difference of needs of buyers among segments Potential of a marketing action to reach a segment Ways to segment Geographic segmentation o Region
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Campbell’s soup distributes more spiciness to South Demographic segmentation o Objective physical, measurable, classification attribute o Household size Campbell’s packaging meals for one or two people, since most of all US households are only one or two people o Age Children influence what parents buy o Gender What Women Want o Income First class flights either for rich people or business people Smoking down in US market in uneducated countries – ethical? Psychographic segmentation o Subjective mental or emotional attributes, lifestyle, needs of customers o People of similar lifestyles tend to live near one another, have similar interests Behavioral segmentation o Observable actions or attitudes o Product features/benefits MicroFridge: college students o Usage rate Frequent flyer marketing Users – heavy, medium light Nonusers – prospects, nonprospects 80/20 rule: 80% of a firm’s sales are obtained from 20% of its customers Variables to use in forming segments Ways to segment organizational markets
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This note was uploaded on 12/13/2008 for the course AEM 2400 taught by Professor Mclaughlin,e. during the Fall '07 term at Cornell.

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prelim 2 review - Prelim 2 Review I Segmentation Market...

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