Midterm 2 - Midterm #2 3-18-2008 1. Segmentation a. A...

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3-18-2008 1. Segmentation a. A specific group of individuals that have a homogeneous (similar) characteristic that directly relates to propensity (driving force behind peoples interest and buying ) b. 4 different ways to segment i. Demographics – age, gender, race, income. Easy to do and most companies do this. Only 20% effective. Hard to relate to propensity ii. Psychographic – why people do what they do (relates to propensity) hardest to collect. Most companies do not do this because it is so hard. iii. Geographic – where the group comes from, where they are located iv. Behavioral – occurs when a segment you are after has a prior (apreora) knowledge 2. Targeting 3. Market – a group of potential customers with similar needs whoa re willing to exchange something of value with sellers offering various goods or services 4. Product – market = market with very similar needs and sellers offer various close substitute ways of satisfying those needs 5. What does it mean to have operational segment , a. Identifying customers and deciding on marketing mix variables b. Includes demographic dimensions c. VERY IMPORTANT that segments be operational 6. substantial segment a. segment should be big enough o be profitable 7. Heterogeneous and homogeneo us a. Homogenous is the same – customers in a market should be as similar as possible, with respect ot their ;ikely responses to marketing mix variables and their segmenting dimensions b. Hetero is having different likes and dislikes – i. the customer in different segments differ greatly to the responses of the marketing mix variables and their segmenting dimensions. 8. Several q’s on secondary data a. Information that has been collected or published already b. Always want to start with secondary data first because you can see what has been already published/ collected and can save yourself time and money. Can also see fi there were any flaws c. Documentation - Must give credit to the people who did the collection if you are using secondary data. i.
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Midterm 2 - Midterm #2 3-18-2008 1. Segmentation a. A...

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