MKT 100 Lecture Notes - Lecture 8: Fixed Cost, Root Mean Square, Mass Customization
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MKT 100 Full Course Notes
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Evaluate if the segment is identi able, reachable, responsive, and substantial/pro table. Identi able does the segment differ from others. Reachable dif cult to reach out to different types of wants/needs. Responsive how consumers react (positively or negatively) Substantial/pro table will the segment bring pro t. Segment pro tably = segment size x segment adoption % x purchase behaviour x. Target market = children age 5-14 in ontario = 1"485"000. Segment adoption % = 10% = 0. 1. Frequency of purchase is once a month. Purchase behaviour = . 89 x 12 = . 68. Pro t margin % = (. 89 - sh. 89) / . 89 = 53% = 0. 53. Pro tability = 1"485"000 x 0. 1 x 22. 68 x 0. 53 - 400"000 = 1"385"029. 4 targeting strategies to choose from based on attractiveness of the opportunity and rm"s core competencies: undifferentiated targeting strategy (mass marketing) Firm decided to ignore the market segment differences and goes after the whole market with one offer.
