Segmentation the process of dividing a larger market

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Segmentation – the process of dividing a larger market into smaller pieces based on one or more meaningful shared characteristics Segmentation variables – Dimensions that divide the total market into fairly homogeneous groups, each with different needs and preferences Generation Y – the group of consumers born between 1977 and 1994 Demographics – statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure Generational marketing – marketing to members of a generation, who tend to share the same outlook and priorities Generation X – the group of consumers born between 1965 and 1976
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Baby boomers – the segment of people born between 1946 and 1964 Metrosexual – a man who heterosexual, sensitive, educated, and an urban dweller who is in touch with his feminine side Geodemography – a segmentation technique that combines geography with demographics Geocoding – Customizing Web advertising so that people who log on in different places will see ad banners for local businesses Psychographics – the use of psychological, sociological, and anthropological factors to construct market segments VALS (Values and Lifestyles) – a psychographic system that divides the entire U.S. population into eight segments Behavioral segmentation – a technique that divides consumers into segments on the basis of how they act toward, feel about, or use a good or service 80/20 rule – a marketing rule of thumb that 20 percent of purchasers account for 80 percent of product’s sales Long tail – a new approach to segmentation based on the idea that companies can make money by selling small amounts of items that only a few people want, provided they sell enough different items Usage occasions – an indicator used in one type of market segmentation based on when consumers use a product most Skimming price – a very high, premium price that a firm charges for its new, highly desirable product Penetration pricing – a pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it Trial pricing – pricing a new product low for a limited period of time in order to lower the risk for a customer Push strategy – the company tries to move its products through the channel by convincing channel member to offer them Pull strategy – the company tries to move its products though the channel by building desire for the products among consumers, thus convincing retailers to respond to this demand by stocking these items
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Value chain – a series of activities involved in designing, producing, marketing, delivering, and supporting any product. Each link in the chain has the potential to either add or remove value from the product the consumer eventually buys Supply chain – all the activities necessary to turn raw materials into a good or service and put it in the hands of the consumer or business customer Supply chain management – the management of flows among firms in the supply chain to maximize total profitability
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