MKT 3343 Chapter 9 Exam 2

market segmentation
involves aggregating prospective buyers into groups that 1) have common needs and 2) will respond similarly to a marketing action
-busniess will do this if they believe that the extra effort will increase its sales, profits and returns on investments
example of market segmentation strategy target customer segmentation consisted of people who wanted a wide selection, shop online and have quick delivery and returns. The speed at which the customer receives their shoes plays a big role in repeat customers and positive customer experience
market segments
the relatively homogenous groups of prospective buyers that result from the market segmentation process
-consist of people who are similar to each other in terms of their consumption behavior
product differentiation
a strategy that involves a firm using different marketing mix actions, such as product features and advertising, to help consumers perceive the product as being different and better than competing products
market-product grid
a framework to relate the market segments of potential buyers to products offered or potential marketing actions
Ex: how do you sleep? huge emphasis on firm pillows because majority of people sleep on their side, the market product grid helps you visualize what is important for production
3 specific segmentation strategies
1) one product and multiple segments
2)multiple products and multiple market segments
3) segments of one, or mass customization
one product and multiple market segments
avoids the extra costs of developing and producing additional versions of the product
EX: Sporting News Baseball Yearbook uses 17 different covers featuring baseball stars from each region but the content inside the magazine is the same
multiple products and multiple marketing segments
-very effective if it meets customers needs better, doesn’t reduce quality or increase price, and adds to sales revenues and profits
Ex: ford has many different lines of cars for each different customer, went from 97 models to 36 models to simplify product line, this provided to benefits to customers, 1)lower prices through producing a higher number of fewer models and 2) higher quality because of their ability to debug fewer basic designs
segments of one: mass communication
-similar to “build to order” , manufacturing a product only when there is an order from a customer
Ex: apples uses this method to trim work in progress inventories and shorten delivery times to customers. they only have a few basic models and which gives customers a good choice and delivery. not totally mass communication because customers does have an unlimited number of options to choose from
mass customization
tailoring products or services to the tastes of individual customers on a high-volume scale
segmentation trade off
-finding the ideal balance between satisfying a customers individual wants
-synergies vs cannibalism
-synergies:increased customer value achieved through performing organizational functions such as marketing or manufacturing more easily
-cannibalism: are the new products or new chains stealing existing customers and sales from the older, existing ones?
ex:tiffany/walmart**(does it have to be the same company or can it be different companies) Ann Incs two chains, ann and taylor and loft, loft stores stole sales from ann and taylor and eventually began to take away the store
increased customer value
more products, lower prices, improved quality, easier access to products act