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MKT 304 Study Guide - Spring 2019, Comprehensive Final Exam Notes - Marketing Mix, Wood, United States Postal Service


Department
Marketing
Course Code
MKT 304
Professor
Matthew Wilson
Study Guide
Final

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MKT 304

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Segmentation and Targeting
Designing a Customer-Driven Marketing Strategy
Marketing Segmentation
Segmentation:
o Dividing a market into groups with distinct needs, characteristics or behaviors.
Key consumer variables: Geographic*, Demographic, Psychographic, Behavioral.
Why do we segment?
o Different segments require separate marketing strategies or mixes
What is the best way to segment?
o There is no single best way, but often combining variable is useful.
Geographic:
o Global regions
o Countries
o Region of country
o States
o Cities
o Neighborhoods
Demographic Segmentation:
o Age, gender, family size, family life cycle, income, occupation, education, ethnic
or cultural group and generation
o The most popular base for segmenting customer groups as needs, wants and usage
often vary by demographics
o Easier to measure than most other types of variables
o Age and life cycle stage addresses the fact that consumer needs and wants change
with age
o Gender: cosmetics, clothing, magazines. Neglected gender segments can offer
new opportunities.
o Household income refers to total family income, whether one or both parents
work. Useful for targeting the affluent for luxury goods. People with low annual
incomes can be lucrative market.
o Ethnic or cultural segmentation is based on race, ethnicity and language. Products
related to dietary preferences, music and art, traditions, education.
Psychographic segmentation:
o Dividing a market into different groups based on lifestyle, mental state or
psychology. Athletic, outdoors type, creative, artistic, adventurous.
Behavioral
o Dividing buyers into groups based on consumer knowledge, attitudes, uses or
responses to a product.
o Occasions: segmentation according to occasions when people buy or consumer
products
o What are some products that may use occasion segmentation? Whole turkey at
Thanksgiving (rare occasion), Cereal upon the “occasion” of waking up, Hallmark
cards.
o Benefits sought: different segments desire different benefits from products. Value
seekers vs. status seekers.
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o User status: non-users, ex-users, potential users, first time users, regular users
o Usage rate: light, medium, heavy
Loyalty status: divide into groups by degree of loyalty
o Who uses loyalty segmentation? Services (hotels/restaurants) give their best
service (best tables/rooms etc) to their most loyal customers.
Use multiple segmentation bases to identify smaller, better-defined target groups.
o Start with a single base and then expand to other bases.
Segmentation
What makes a segment useful?
Measurable
Accessible
Substantial
Differentiable
Actionable
Effective Segmentation
To be useful, market segments must be:
Measurable
o Need to measure market size, purchasing power.
o You need to know how big the market segment is so that you can plan how to
serve that segment
Accessible
o Needs to be reachable by marketers
o If the segment exists, but you cant communicate with them or you cant distribute
your product to them, the segment is not useful.
To be useful, market segments must be:
o Substantial: needs to be large enough to be profitable. Even if the segments exist,
if it has only a few people in it may be impossible to profitably serve the segment
o Differentiable: must be different from each other.
o Actionable: marketers must have the necessary resources to develop programs for
different segments. Serving a market segment costs money.
Segmentation Conclusions
Segmentation reveals the firm’s market segment opportunities
Once markets have been segmented, firms need to evaluate and target certain segments.
Designing a Customer-Driven Marketing Strategy
Market Targeting
Market targeting involves:
o Evaluating marketing segments
o Selecting target market segments
o Being socially responsible
Evaluating marketing segments involves looking at 3 things..
o Segment size and growth
o Structural attractiveness
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