market segmentation (imp)

Question 1

what is market segmentation

Answer 1

it means dividing a big group of customers into smaller, more manageable groups who have similar needs, preferences, or characteristics.

Question 2

Market segmentation versus customer segmentation?

Answer 2

-Market segmentation involves splitting a market into segments and developing different strategies for those segments.

-Customer segmentation is the same basic idea as market segmentation, except that the scope is limited to the organisation’s own customers. (in their database)

Question 3

what are the types of market segmentation

Answer 3

-demographic
-behavioral
-geographic
-psychographic

Question 4

demographic segmentation

Answer 4

Age, gender, marital status
Income
Occupation
Nationality
Ethnic group

This is normally the easiest form of segmentation, as info is easily gathered and inexpensive.
For best results use together with another type of segmentation to help narrow the target market even further.

Question 5

behavioral segmentation

Answer 5

Frequency of product/service use

Brand loyalty
Transaction behaviour (such as price sensitivity)
Online shopping behaviour and habits
Behavioural segmentation assists organisations to understand how a customer interacts with the product/ service, meaning that it can target them more effectively by knowing how they are likely to react towards product/service or marketing message.

Question 6

geographic segmentation

Answer 6

Country or region
Rural or city based

Although a basic form of segmentation, it is often a highly effective form of market segmentation. Understanding the location of a customer can help an organisation understand customers’ needs. Understanding regional differences driven by factors such as culture, climate or language can allow for a more targeted marketing message.

Question 7

psychographic segmentation

Answer 7

Social status
Personality
Lifestyle
This form of segmentation focuses on the emotional or psychological behaviours of customers, where customers are grouped according to values, personality traits, attitudes, lifestyles and interests. This gives an organisation useful insight into customers’ needs and preferences. Organisations will often combine demographic and psychographic customer analysis when undertaking customer segmentation, in order to develop a richer and fuller picture of their customer segments.

Question 8

what are the benefits of market segmentation?

Answer 8

-Better understand needs of all groups
-better product offerings, customisation , improved satisfaction, retention
-Targeted messaging: even if same product, it allows co. to highlight the features that are most important to each segment (price,reliability, availability, prestige) result in positive experience and customer retention
-Improve marketing efficiency: easier to manage customers, therefore can design and tailor very specific marketing campaigns to the most relevant people, through the most relevant marketing CHANNELS. Less time/money will be wasted on mass marketing.
-improved pricing strategy
-Improve focus
Market segmentation helps an organisation to focus on exactly which segments they want to target with specific products, services or marketing campaigns. helps to achieve the best ROI.
-Improve competitiveness- customers will be more satisfied

Question 9

Importance of CSR strategically

Answer 9

Attraction, retention of staff
Attraction, retention of customers
For investors
Easy to raise funds
Reduced cost of capital

Improved relationship with govt
Might get grants

Good for wider community