230 p 224 The five criteria are 1 simplicity and cost effectiveness of

230 p 224 the five criteria are 1 simplicity and cost

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230.(p. 224) The five criteria are: (1) simplicity and cost-effectiveness of assigning potential buyers to segments; (2) potential for increased profit and ROI; (3) similarity of needs of potential buyers within a segment; (4) difference of needs of buyers among segments; and (5) potential of a marketing action to reach a segment. 231.(p. 224) There is one key difference between for-profit and not-for-profit organizations, and that is the criterion related to the potential for increased profit and ROI. For nonprofits, this criterion is replaced by the potential for serving clients' needs more effectively while achieving the organization's goals. 232.(p. 225-227) The four general bases of segmentation are: (1) geographic segmentation, which is based on where prospective customers live or work (region, city size); (2) demographic segmentation, which is based on some objective physical (gender, race), measurable (age, income), or other classification attribute (birth era, occupation) of prospective customers; (3) psychographic segmentation, which is based on some subjective mental or emotional attributes (personality), aspirations (lifestyle), or needs of prospective customers; and (4) behavioral segmentation, which is based on some observable actions or attitudes by prospective customerssuch as where they buy, what benefits they seek, how frequently they buy, and why they buy. 233.(p. 225-227) Students should choose from the segmentation base(s) and its (their) respective segmentation variable(s) listed in Figure 9-4. The most likely basis of segmentation would be geographic. The likely segmentation variables, from the simplest to use to the more complex, would be: (1) region (Midwest, where St. Louis is located); MSA (or a metropolitan statistical area that has at least one urbanized area of 50,000 or more people and adjacent territory with a high degree of social and economic integration)since larger cities and their associated suburbs meet this criterion and usually have a sufficient number of people that are willing and able to pay for food served at this restaurant; (3) density such as urban and suburban locations but not small town or rural, which are excluded from a defined MSA; and (4) the set of zip codes or census tracts where potential consumers reside who (a) live within a 10-mile drive-time radius of the proposed restaurant location and (b) have the necessary income (a demographic segmentation variable) of at least $35,000 to afford the $10 to $25 per person cost of a meal at Outback. Although a psychographic basis of segmentation could be chosen, it would be too difficult and costly to select a psychographic variable (like personalityextroverted, gregarious) to identify and assign consumers into distinct segments and then develop marketing actions to reach themtwo criteria necessary to segment markets. With respect to behavioral segmentation, usage status may be feasible if an effective customer loyalty/frequency marketing program can be easily developed to identify and classify the "heavy users" that would patronize Outback, say, more than once a month, since
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