Market Segmentation

Question 1

Market Segmentation

Answer 1

Aggregating buyers into groups that have common needs and will respond similarly to marketing action

-Marketing Mix can be applied to segment as a whole (Product, Price, Promotion and Place)

Product Differentiation Strategy = have consumer perceive the product as being different and better than competing products (uses Mix)

Question 2

Segment’s must have…

Answer 2

Identity

Systematic Behaviors = not a one time way of reacting to a product or service, it is their typical approach

Profitability = segment must be able to make $

Question 3

Three-Levels of Segmentation

Answer 3

1) Personal Characteristics (Demographics & Psychographics)
2) Behavior
3) Benefits

Question 4

Personal Characteristics

Answer 4

Demographics = based on objective, measurable classification or attribute

Psychographics = personality and lifestyle, subjective, mental, emotional attributes

Question 5

Behavior

Answer 5

Behavior = based on observable actions by customers, what someone does, how they act, how often they use products, how often they buy , brand loyalty, etc.

Maximizer = never satisfied, “only the best”

Satisficer = easily satisfied, “good enough”

Question 6

Benefits

Answer 6

Benefits = Segmenting based on needs rather than characteristics of the customer themself

Two types: Functional & Emotional

Question 7

Concentrated Segment

Answer 7

Segments that have segments within them Ex) Cars: Sports, Luxury, Hybrid, Compact