Chapter 6.docx

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Simon Fraser University
Business Administration
BUS 343
Zaheer Jiwani

Chapter6 Target marketing strategy: process overview Market Fragmentation: The creation of many consumer groups due to a diversity of distinct needs and wants in modern society. Target marketing strategy: Dividing the total market into different segments on the basis of customer characteristics, selecting one or more segments, and developing products to meet the needs of those specific segments. Step1: Segmentation Segmentation: The process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics.  Segment consumer markets Segmentation variables: Dimensions that divide the total market into fairly homogeneous groups, each with different needs and preferences. ****the larger consumer “pie” can be sliced into smaller pieces in a number of ways, including geographic, demographic, psychological, and behavioral differences.****  Segment by behaviour Behavioural segmentation: A technique that divides consumers into segments on the basic of how they act toward, feel about, or use a good or service. (冰箱电视) Benefit Segmentation: A segmentation approach that groups consumers or customers based on the benefits or value they seek in buying and using products. Usage segmentation: A segmentation approach that groups consumers or business customers based on the amount of a product purchased or consumed or how the product is used. 80/20 rule: A marketing rule of thumb that 20 percent of purchasers typically account for 80 percent of a 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: Indicator used in one type of market segmentation based on when consumers use a product most.  Segment by psychographics Psychographic segmentation: A segmentation approach that groups people based on their attitudes, beliefs, values, lifestyles, or other psychological orientations. VALS (Values and Lifestyles): A psychographic system that divides people into eight segments.  Segment by Demographics Demographics: Variables that describe objective characteristics of a population or group.  Segment by demographics: age Tweens: Boys and girls age 9-12 who are “in-between” stages in their development, when they are considered “too old for toys” but “too young for dating”. Generation X: The group of consumers born between 1965 and 1978. Baby boomers: The segment of people born between 1946 and 1964. Gen Y: The children of baby boomer parents is the second largest demographic segment in Canada.  Segment by demographics: geography Geodemography: Segmentation technique that combines geography with demographics.  Segment business-to-business markets B2B marketers: Marketers who work in business-to-business markets.  Industrial psychographics Industrial psychographics: The application of psychographics to the business-to-business context. Step2: Targeting ****the three phases of targeting: evaluate market segments, develop segment profiles, and choose one or more target segments.****  Develop segment profiles Segment profile: A description of the “typical” customer in a segment. Cluster analysis: Computer software that groups survey respondents based on the commonality of their answers to questions, putting respondents with similar answers in the same group, while maximizing the differences between the groups or segments. Market potential: The maximum demand expected among consumers in a segment for a product or service.  Choose one or more ta
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