M201 Final Prep Market Segmentation
Terms
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- involves aggregating prospective buyers into groups that 1) have common needs 2) will respond similarly to a marketing action
- market segmentation
- relatively homogenous groups of prospective buyers that result from the market segmentation process
- market segments
- Market segmentation links market needs to an organization's marketing program through marketing mix actions (3)
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identify market needs
link needs to actions
execute marketing program actions -
when a company produces a single product or service and attempts to sell it to two or more market segments
Example: ________ -
One Product Multiple Segments
Harry Potter - multiple products aimed at multiple market segments
- Multiple products to multiple segments
- Wal-Mart Tiffany Paradox
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taking a basic product and tailoring it to a high end segment to serve a Tiffany consumer and a low end segment appeal to a Wal Mart consumer
tries to bridge ends of a spectrum (affordable luxury)
dangerous because it could take away from current sophistication/exclusivity of Tiffany's or any other luxury brand's brand image -
tailoring goods or services to the tastes of individual customers on a high volume scale
internet ordering and flexible manufacturing and marketing processes have made mass customization possible
example:________ -
segments of one or mass customization
Dell -
-increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently
-all in our head (mirage)
-core competencies translated into other business segments - synergies
-
-newer products stealing customers and sales from older products
-example: Ann Taylor LOFT sales have surpassed those of the flagship Ann Taylor stores - cannibalization
- Why segment markets
-
-to respond more effectively to the wants of groups and potential buyers and in turn increase sales, profit, and return on investment
-only worth doing if profits from segmentation are greater than segmentation costs
-non for profit organizations segment as well to better serve clients