Chapter 4 Flashcards
(21 cards)
is the process of dividing a broad market into smaller, more manageable groups based on shared characteristics, needs, or behaviors.
These segments allow you to target customers more effectively, aligning your products, services, and marketing strategies with specific preferences.
Retail Market Segmentation
Benefits of retail market segmentation
- Improved customer satisfaction
- Higher conversion rates
- Efficient resource allocation
- More competitive advantage
- Better product development
Tailored offerings that meet specific customer needs foster stronger relationships and loyalty.
Improved customer satisfaction
Focused marketing efforts result in better engagement and increased sales.
Higher conversion rates
Resources can be directed toward high-potential segments, reducing waste and boosting profitability.
Efficient resource allocation
Understanding customer segments allows you to differentiate themselves from competitors.
More competitive advantage
Insights from segmentation help you innovate and create products that resonate with your audience.
Better product development
age, gender, income, education, and occupation.
Demographics
lifestyle, values, and interests.
Psychographics
location, climate conditions, and cultural preferences.
Geographics
Purchase habits, brand loyalty, and usage patterns.
Behavioral Factors
Focusing on specific customer needs such as convenience, accessibility, affordability, or luxury.
Needs-based segmentation
Setting product prices lower than competitors attracts price-sensitive customers and builds initial market share.
While this approach may initially reduce profit margins, the increased sales volume often compensates for the difference, driving overall profitability.
Price penetration
You can increase visibility and customer interest through promotional campaigns.
Aggresive Promotion
offering attractive price reductions during holidays or key sales periods.
Seasonal discounts
creating urgency with exclusive deals.
Limited time offers
rewarding repeat customers with points, discounts, or exclusive perks
Loyalty programs
Ensuring products are accessible across various channels—physical stores, e-commerce platforms, and mobile apps—maximizes convenience for customers.
A high saturation distribution model ensures products are available everywhere from small kiosks to large supermarkets.
High Product distribution
Creating a seamless shopping journey, both online and offline, can differentiate retailers.
Personalized assistance, user-friendly websites, and efficient checkout processes contribute to better experiences and higher customer satisfaction.
Enhanced customer experience
Collaborating with complementary brands or local businesses can expand market reach and enhance credibility.
Strategic partnerships
