3 - Segmentation & Targeting

Question 1

segmentation

Answer 1

demographic (age, gender, income…)
behavioral (past purchases, browsing behavior…)
psychographic (lifestyle, values…)

Question 2

segment prediction

Answer 2

use current customers to predict new ones
1. relate demographics to behavior of old customers
2. predict behavior using estimated model

Question 3

desirable properties of segments

Answer 3

LIDS
- large
- identifiable
- distinctive
- stable

Question 4

desirable properties of targets

Answer 4

PFD
- potential (sizable + growing)
- fit (must fit core competences)
- defensibility (adv over competitors)

Question 5

Calyx Flowers Case

Answer 5

development of need-based segmentation
- resulted in a narrow customer segment
- revealed segment that can be reached more efficiently + with lower acquisition costs

• optimal value proposition

Question 6

optimal value proposition

Answer 6

overlap of company value and customer needs

• maximize this

Question 7

predictive power of different segmentation criteria

Answer 7

1. behavioral
2. demographic
3. psychographic