Marketing Management Lecture 4

What is “segmentation”?

dividing a market into distinct groups with different characteristics who require separate marketing mixes

What are the three ways to do segmentation?

demographic, geographic, behavioral segmentation

What is demographic segmentation about?

variables such as income (MOST POPULAR), age, gender

What is geographic segmentation about?

different geographical units

• regions: food industry (Dunkin Donuts popular in a few parts of US but not all)

• city/rural: Target (Walmart was popular in rural areas but not cities)

• nations: (e.g. using Korean dub for a Hollywood movie when screened in Korea)

What is behavioral segmentation about?

based on consumer knowledge, attitude, use to a product

·       benefits, loyalty, usage rate (heavy vs. light user), occasions of use

What are the requirements for good segmentation?

measureable, accessible, large enough

What is targeting about?

evaluating the attractiveness of a market segment + selecting one or more

What is the difference between mass, target and customized marketing?

• mass marketing: selling one product to all buyers

• target marketing: marketing mix tailored to a specific segment

• customized marketing: marketing for a specific customer (mass customization: gives customers endless choice without complexity of manufacturing)