Chapter 12: Market segmentation and the selection of target groups

Question 1

Market segmentation and the selection of target groups is part of

Answer 1

strategic retail marketing policy

Question 2

Consumers become more and more

Answer 2

individualistic

➔ Difficult to place them in one target group and describe them!
➔ Different needs on different moments and locations!
➔ Challenge for retail!

Question 3

Market segmentation

Answer 3

Dividing the market into more or less homogenous groups of individuals with common characteristics and a similar purchasing behaviour

Question 4

Segmentation criteria

Answer 4

• Heterogeneity of needs: needs of the segments must distinguish themselves from other groups
• Measurability: criteria of the segment must be measurable
• Approachability: segment must be reachable through promotional and distributional technique
• Size: segment must be large enough to be economically exploitable

Question 5

Segmentation strategies
A-priori segmentation:

Answer 5

▪ Classifying based on general characteristics and then assessing
whether there are differences in behavioural characteristics
between or among groups
▪ Methodology disadvantage is that the segments are not
homogeneous in terms of their product requirements,
purchasing behaviour and use of the product

Question 6

Segmentation strategies
Ex-post segmentation:

Answer 6

▪ Groups of customers behave differently towards products and
homogenous segments are based on the similarity in
requirements, behaviour and use
▪ The advantage is that the requirements of homogeneity and
heterogeneity are met and there is a direct relationship to
purchasing behaviour

Question 7

Most common segmentation strategies

Answer 7

▪ Geographical segmentation
▪ Demographic segmentation
▪ Psychographic segmentation
▪ Domain specific segmentation (bell curve)

Question 7

We use target marketing in the current environment to

Answer 7

develop a store personality

Question 8

CRM systems

Answer 8

In the physical world, we partially resolve the problem of anonymity with CRM systems. CRM stands for customer response management and is a system that allows a retailer to collect customer data to ultimately serve the customer better. Many retailers use customer cards, either physically or digitally in the app for example.

Question 9

basic idea of CRM system

Answer 9

increase loyalty and then this should be shaped mainly by better responding to a customer’s needs rather than giving discounts or points. The goal is ultimately to create a greater connection between the retail chain and the customer.

Question 10

Once there are enough users, the CRM system can be effectively deployed by

Answer 10

using concepts such as one-to-many marketing or also called group marketing and one-to-one marketing. One-to-many marketing involves looking more at groups that exhibit similar behaviour. Based on this data, information is sent to these groups.

Question 11

If the retailer does not have access to a loyalty or CRM system, he can really only record visits. In doing so, he uses so-called

Answer 11

customer counting sytems, a system that does not quite do what it says, because it does not count customers but visitors. The systems are very sophisticated camera’s and can give insight into:
- Numbers, group size, gender
- Average frequency of visits per person
- Analyses of different parts and departments
- Where people have been