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Unformatted text preview: n a desirable market
segment. Disadvantages include segments that are too small, changing segments, and threat of
MULTISEGMENT TARGETING STRATEGY. When a firm chooses to serve two or more welldefined market segments and develops distinct marketing mixes for each segment, it is practicing
multisegment targeting. Advantages potentially include greater sales volume, higher profits,
larger market share, and economies of scale in manufacturing and marketing. Disadvantages
include high costs and cannibalization.
KEY: CB&E Model Strategy OBJ: 08-7 TOP: AACSB MSC: BLOOMS Synthesis 17. Define multisegment targeting and discuss the advantages and disadvantages of this targeting
A firm that chooses to serve two or more well-defined market segments and develops a distinct
marketing mix for each has a multisegment targeting strategy. This strategy offers many potential
benefits to firms, including greater sales volume, higher profits, larger market share, and
economies of scale in manufacturing and marketing. Yet it may also involve greater product
design, production, promotion, inventory, marketing research, and management costs. Another potential disadvantage is cannibalization, which occurs when sales of a new product cut into sales
of a firm’s existing products.
KEY: CB&E Model Strategy OBJ: 08-7 TOP: AACSB MSC: BLOOMS Synthesis 18. Define cannibalization. Is it always bad? Explain.
Cannibalization occurs when sales of a new product cut into sales of a firm’s existing products.
Cannibalization would be preferred over losing sales to a competitor. Cannibalization can also
help to build new business.
KEY: CB&E Model Product OBJ: 08-7 TOP: AACSB MSC: BLOOMS Synthesis 19. What is one-to-one marketing, and what is the primary goal for companies that adopt the one-toone approach? Describe the difference between a one-to-one marketing approach and the
traditional approach to mass marketing.
One-to-one marketing is an individualized marketing method that utilizes customer information
to build long-term, personalized, and profitable relationships with each customer. The goal is to
reduce costs through customer retention and increase revenue through customer loyalty. The
difference between one-to-one marketing and the traditional mass-marketing approach can be
compared to shooting a rifle and a shotgun. If you have good aim, a rifle is the more efficient
weapon to use. A shotgun, on the other hand, increases your odds of hitting the target when it is
more difficult to focus. Instead of scattering messages far and wide across the spectrum of mass
media (the shotgun approach), one-to-one marketers look for opportunities to communicate with
each individual customer (the rifle approach).
KEY: CB&E Model Strategy OBJ: 08-8 TOP: AACSB MSC: BLOOMS Synthesis 20. Discuss the four trends that...
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This document was uploaded on 09/29/2013.
- Fall '13