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Five general criteria are often used to pick target segments. They include the size of the
market, expected growth of the market, competitive position of the firm with respect to the
market, and compatibility with the organization's objectives and resources. What is the fifth
criterion?
cost of reaching the segment
time required to create awareness
need to conform to government regulations
how long target market members have been customers
Segmenting a market requires a number of skill(s):
Strong analytical skills
Sound strategic thinking
Understanding of the consumer
All of these
In addition, a vision on where the market is heading and how this all fits with the company’s direction.
What is the seventh step in the eight-step process for segmenting a market?
Conduct a profit-and-loss financial analysis
Create a sales forecast
Identify the segment that best meets company objectives
Review company objectives
Refer to figure 6-1.
Company objectives should include:
Sales
Revenue
Profit targets
All of these
Company objectives should also have a qualitative element such as gaining a new threshold in the
market.
The 80/20 rule is related to which consumer segmentation variable?
geographic
psychographic
benefits sought
usage
Behaviouristics looks at why a consumer buys a product, the product benefit, how the product is used,
and whether
consumers are brand loyal in their purchase behaviour.
A market-product grid is a framework to relate:
Estimated expenses for products sold to various market segments.
Total anticipated revenue for each product to market segments.
Total anticipated profit for each product to segments.
The segments of a market to products offered or potential marketing actions by the firm.
Refer to figure 6-4.