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SUBSTANTIALITY. A selected segment must be large enough to warrant developing and
maintaining a special marketing mix (commercially viable).
IDENTIFIABILITY AND MEASURABILITY. The segments must be identifiable and their size
measurable. Descriptive data regarding demographic, geographic, and/or other relevant
characteristics of segment members must be available.
ACCESSIBILITY. The firm must be able to reach members of targeted segments with customized
RESPONSIVENESS. The market segment must respond differently than other segments to
marketing mixes; otherwise, there is no need to treat that segment separately.
KEY: CB&E Model Customer OBJ: 08-3 TOP: AACSB MSC: BLOOMS Synthesis 5. Discuss the advantages and disadvantages of single-variable segmentation and multiple-variable
Markets can be segmented using a single variable, such as age group, or several variables, such as
age group, gender, and education. Although it is less precise, single-variable segmentation has the
advantage of being simpler and easier to use than multiple-variable segmentation. Disadvantages
of multiple-variable segmentation include:
It is often more difficult to employ than
Usable secondary data are less likely to be
As the number of segmentation bases
increases, the size of individual segments
KEY: CB&E Model Strategy OBJ: 08-4 TOP: AACSB MSC: BLOOMS Synthesis 6. What is geographic segmentation? Name four reasons why a company would use a regional
marketing approach. Then give a specific example of a company marketing its product(s)
Geographic segmentation refers to segmenting markets based on region of the country or the
world, market size, market density, or climate.
Marketers might adopt a regional approach for the following reasons:
Firms need to find new ways to generate sales
volume because of sluggish and intensely
Computerized checkout stations with scanners
enable retailers to accurately assess which
brands are selling well in their region.
Packaged-goods manufacturers are
introducing new regional brands intended to
appeal to local preferences.
Consumer goods companies use a regional
approach because it allows them to react more
quickly to competition.
Examples of companies using a regional approach include:
Cracker Barrel, as it designs its product
offering to meet the cultural requirements of
any company selling climate-dependent
products such as snow blowers, water and
snow skis, and air-conditioning and heating
KEY: CB&E Model Strategy OBJ: 08-4 TOP: AACSB MSC: BLOOMS Synthesis 7. What is a segmentation base (or segmentation variable)? Name the common segmentation bases
used by marketers to segment consumer markets.
A segmentation base (or variable) is a characteristic of individuals, grou...
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This document was uploaded on 09/29/2013.
- Fall '13