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segmentation using multiple variables jointly

segmentation using multiple variables jointly -...

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SEGMENTATION EXAMPLES: USING MULTIPLE SEGMENTATION VARIABLES JOINTLY COMM 224 - DR. K. BUYUKKURT Please note that the following examples use multiple segmentation variables simultaneously. This is a common practice in marketing. The net result of using multiple segmentation variables is usually smaller segments in terms of number of buyers. However, each segment is likely to be more homogeneous than the case where only one or two segmentation variables are used to segment the market. (Question: what does it mean to have a more homogeneous segment versus a more heterogeneous segment?) See Table 8.1 in your text book for a list of the major segmentation bases for consumer markets. You should know these variables very well. Example 1: Segmentation in the Greeting Card Business (for example, Hallmark cards) See http://www.hallmark.com . Click on Occasions to see their segmentation using occasion as a segmentation basis. Let us use three segmentation bases: 1. Occasion (behavioural segmentation) : Halloween, Christmas, Valentines Day, Mothers’ Day, Fathers’ Day 2. Country Region (demographic segmentation): Quebec, Rest of Canada (Provinces other than Quebec) (reflects language and cultural differences) 3. Benefits Sought by consumer (behavioural segmentation): Economy, Prestige Let us represent the simultaneous use of the above three segmentation bases as a cross tabulation: Purchase Occasion Province Benefit Sought Halloween Christmas Valentines Day Mothers’ Day Fathers’ Day Graduation Birth Day Quebec Economy Prestige Rest of Canada Economy Prestige X X X X X X X Targeted segments are indicated by X. Note that this segmentation is given only for instructive purposes only. No claim is made with regard to its realism.
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Example 2: Segmentation for Investment Services (for example, TD Waterhouse) See http://www.tdwaterhouse.ca . Let us use three segmentation bases: 1. Age (demographic segmentation): 20-34, 35-49, 50-64, 65 and over 2. Benefits sought (behavioural segmentation): high return with potential risk, stable return with low risk 3. Readiness stage
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