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Chapter 8

Management and Organizational Studies 2320A/B Chapter Notes - Chapter 8: Competitive Advantage, Value Proposition, Target Market

Management and Organizational Studies
Course Code
MOS 2320A/B
Kevin Thompson

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Chapter 8
Create value for targeted customers:
1. Select customers to serve
a. Segmentation
b. Targeting
2. Decide on a value proposition
a. Differentiation
b. Positioning
Market Segmentation
o Geographic segmentation: dividing a market into different
geographical units such as nations, regions, provinces, counties, cities,
or neighborhoods
o Demographic Segmentation: dividing the market into groups based
on variables such as age, gender, family size, family life cycle, income,
occupation, education, religion, race generation, and nationality
Age and life cycle segmentation: dividing a market into
different age and cycle groups
Gender segmentation long used in clothing cosmetics,
toiletries, and magazines
Income segmentation
o Psychographic segmentation: divides buyers into different groups
based on social class, lifestyle, or personality characteristics
o Behavioural segmentation: dividing a market into groups based on
consumer knowledge, attitudes, uses, or responses to a product
Occasion segmentation: dividing the market into groups
according to occasions when buyers get the idea to buy,
actually make their purchase, or use the purchased item
Benefit segmentation: dividing the market into groups
according to the different benefits that consumers seek from
the product
User status markets can be segmented into nonusers, ex-
users, potential users, first-time users, and regular users of a
Usage rate light, medium, and heavy product users
Loyalty status
Marketers rarely limit their segmentation analysis to only one or few
By going after segments instead of the whole market, companies can deliver
just the right value proposition to each segment served and capture more
value in return
Segmenting international markets can be based on geographic, economic,
political, cultural, and other factors
Intermarket segmentation: forming segments of consumers who have
similar needs and buying behaviour even though they are located in different
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