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MCS 1000 (215)
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Chapter ch.9

MCS 1000 Chapter ch.9: Chapter 9

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Department
Marketing and Consumer Studies
Course
MCS 1000
Professor
Sergio Meza
Semester
Winter

Description
Chapter 9: Market segmentation, targeting and positioning Market Segments: the relatively homogenous groups of prospective buyers that result from the market segmentation process Each market segment consists of people who relatively similar to each other in terms of consumption behaviour Product differentiation: Strategy that involves a firm using different marketing mix activities, such as product features and advertising, to help consumers perceive the product as being different from and better than competing products Market product grid: A framework to relate the market segments of potential buyers to products offered or potential marketing actions by the firm When should you segment markets? When expenses are greater than the potentially increased sales from segmentation, a firm should not attempt to segment its market 3 specific situations illustrate the effective use of market segmentation 1. One product and multiple market segments 2. Multiple products and multiple market segments 3. Segments of one: Mass customization Cannibalization: stealing sales Steps in segmenting and targeting markets 1. STEP 1: Group potential buyers into a segment A marketing manager should develop market segment to meet 5 criteria 1. Potential for increase profit 2. Similarity of needs of potential buyers with a segment 3. Difference of needs of buyers among segments 4. Potential of a marketing action to reach a segment 5. Simplicity and cost of assigning potential buyers to segments What are the ways to segment consumer markets 1. Geographic segmentation: a marketer segments based on where the consumer lives- such as country, region, province, city, or neighbourhood. Marketers often find that Canadians differ in terms of needs or preferences based on the region in which they live 2. Demographic segmentation: One of the most common ways. This approach segments consumers by age, gender, income, education, and occupation. 3. Psychographic segmentation: They segment markets according to personality or lifestyle. It has been found that people who share the same demographic characteristics can have very different psychographic profilers 4. Behavioural segmentation: Use consumers behaviour to divide the market a. can be viewed through usage rate: quantity consumed or patronage-store visits- during a specific period; varies significantly among different customer or groups b. 80\20 rule: a concept that suggests 80 percent of a firms sales are obtained from 20 percent of its customers STEP 2: Group products to be sol
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