Market Segmentation, Targeting, and CRM: Key Concepts and Strategies

What is market segmentation?

The process of dividing a market into meaningful, relatively smaller and identifiable segments or groups to tailor marketing mixes.

What are the three main types of market segmentation?

Geographic, demographic, and psychographic segmentation.

What factors are considered in geographic segmentation?

Region of the world, region of the country, market size, market density, and climate.

What age group is referred to as 'Tweens' in demographic segmentation?

Children aged approximately 8 to 12 years, with a direct spending power and influence over family spending.

What defines Generation Y/Millennials in demographic segmentation?

Individuals aged approximately 25 to 40 years, making up 27% of the population, often living at home and influenced by their living situation.

How does income affect consumer segmentation?

Income influences consumer wants and determines buying power.

What is psychographic segmentation?

Segmenting based on consumer lifestyles, values, and personality traits.

What is benefit segmentation?

Segmenting according to the benefits that consumers seek from a product or service.

What is usage rate segmentation?

Segmentation based on the amount of product bought, categorizing users as first-time, light, medium, or heavy users.

What is a target market?

A group of people or organizations for which an organization designs, implements, and maintains a marketing mix.

What are the four general strategies for selecting target markets?

Undifferentiated, multisegment, concentrated, and one-to-one strategies.

What is positioning in marketing?

The place a product, brand, or service occupies in the consumer's mind.

What is product differentiation?

Positioning based on what distinguishes the product from the competition.

What is perceptual mapping?

Displaying the location of products, brands, or groups of products in customers' minds in two or more dimensions.

What is the purpose of a positioning statement?

To clearly define how a brand is perceived in relation to its competitors.

What is Customer Relationship Management (CRM)?

A system for identifying profitable customers and finding ways to interact with them to build loyalty and retain them.

What are the three stages of the CRM cycle?

Understanding offerings, using technology to gather customer information, and using that information to retain customers.

What is data mining in the context of CRM?

An analytical process that compiles actionable data on the purchase habits of current and potential customers.

What is the Pareto principle in CRM?

The principle that 80% of a business's profit comes from 20% of its customers.

What is the goal of the CRM cycle's third stage?

To implement measures of customer satisfaction and maintain long-term relationships.

What are common applications of CRM databases?

Managing customer interactions, analyzing customer data, and improving customer loyalty programs.

What privacy concerns are associated with CRM?

Concerns regarding invasion of privacy and the trust issues that arise when consumer data is misused.

What is a customer dashboard?

A tool that provides a call center agent with relevant information about a customer during interactions.

What is the significance of touch points in CRM?

Touch points are interactions between the customer and the organization that form the foundation of a CRM system.

What is the importance of understanding customer relationships in CRM?

To customize products and services based on data gathered through interactions, ensuring long-lasting relationships.