Chapter 9-11 - Chapter 9: L01 Market segmentation involves...

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Chapter 9: L01 Market segmentation involves aggregating prospective buyers into groups that (a) have  common needs and (b) will respond similarly to a marketing action. Organizations go to the  expense of segmenting their markets when it increases their sales, profits, and ability to serve  customers better. Market segments  are the relatively homogeneous groups of prospective buyers that  result from the market segmentation process. (consumption behavior) Product differentiation  involves a firm using different marketing mix activities, such as  product features and advertising, to help consumers perceive the product as being  different and better than competing products. Identify market  needs Benefits in terms of -product features -expense -Quality -Savings in time and  convenience -> Link needs to actions Take steps to segment  and target markets -> Executing marketing  program actions A marketing mix in terms  of  -Product -Price -Promotion -Place One product and Multiple market segments - Avoids extra costs (from research, engineering, and manufacturing expenses) - Movies, magazines, and books are single products used this way. Multiple products and Multiple market segments. - Ford’s different lines of cars, targeted at different type of customer. (two tier, Gap/ Old  Navy) Segments of One: Mass Customization - Each customer has unique needs and wants, and desires special tender loving care. - Mass customization is the next step beyond build-to-order (BTO) The Segmentation Trade-Off: CRM versus Synergies - Synergy: the increased customer value achieved through performing organizational  functions like marketing or manufacturing more efficiently.  - “increased customer value”; more products, improved quality, lower prices, easier  access. L02
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- Step 1 is to group potential buyers into segments. Buyers within a segment should have  similar characteristics to each other and respond similarly to marketing actions like a  new product or a lower price.  - Step 2 involves putting related products to be sold into groups.  - In step 3, organizations develop a market-product grid with estimated size of markets in  each of the market-product cells of the resulting table.  - Step 4 involves selecting the target market segments on which the organization should  focus. - Step 5 involves taking marketing mix actions – often in the form of a marketing program —to reach the target market segments.  L03 Step 1: Factors used to segment consumer markets include geographic, demographic,  psychographic, and behavioral variable. Organizational markets use related variables except for  psychographic ones.  - Criteria to use in forming the segments
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This note was uploaded on 10/21/2009 for the course AEM 2400 taught by Professor Mclaughlin,e. during the Fall '07 term at Cornell University (Engineering School).

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Chapter 9-11 - Chapter 9: L01 Market segmentation involves...

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