SMU MBA ASSIGNMENTS

Process of dividing the market according to similarities that exist among the various subgroups within the market. The similarities may be common characteristics or common needs and desires. Market segmentation comes about as a result of the observation that all potential users of a product are not alike, and that the same general appeal will not interest all prospects. Therefore, it becomes essential to develop different marketing tactics based on the differences among potential users in order to effectively cover the entire market for a particular product. There are four basic market segmentation strategies: behavior segmentation, demographic segmentation, geographic segmentation, and physiographic segmentation.

Basis for segmenting consumer markets

 

[edit]Geographic segmentation

The market is segmented according to geographic criteria–nations, states, regions, countries, cities, neighborhoods, or zip codes. Geo-cluster approach combines demographic data with geographic data to create a more accurate profile of specific [1] With respect to region, in rainy regions you can sell things like raincoats, umbrellas and gumboots. In hot regions you can sell summer wear. In cold regions you can sell warm clothes.

[edit]Demographic segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. As one might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups. This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process.

[edit]Psychographic segmentation

Psychographics is the science of using psychology and demographics to better understand consumers. Psychographic segmentation: consumers are divided according to their lifestyle, personality, values and social class. Consumers within the same demographic group can exhibit very different psychographic profiles.[2]

[edit]Positive market segmentation

Market segmenting is dividing the market into groups of individual markets with similar wants or needs that a company divides into distinct groups which have distinct needs, wants, behavior or which might want different products and services. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which don’t always fit into convenient demographic boundaries.

This part of the segmentation process consists of drawing up a perceptual map, which highlights rival goods within one’s industry according to perceived quality and price. After the perceptual map has been devised, a firm would consider the marketing communications mix best suited to the product in question.

[edit]Behavioral segmentation

In behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product. It is actually based on the behavior of the consumer.

[edit]Occasions

Segmentation according to occasions is based on the arising of special need and desires in consumers at various occasions. For example, for products that will be used in relation with a certain holiday. Products such as Christmas decorations or Diwali lamps are marketed almost exclusively in the time leading up to the related event, and will not generally be available all year round. Another type of occational market segments are people preparing for their wedding or a funeral, occasions that only occurs a few times in a persons lifetime but happens so often in a large population that it can be considered a market segment.

[edit]Benefits

Segmentation takes place according to benefits sought by the consumer or which the product/service can provide.

[edit]Using segmentation in customer retention

 

The basic approach to retention-based segmentation is that a company tags each of its active customers with three values:

Is this customer at high risk of canceling the company’s service?

One of the most common indicators of high-risk customers is a drop off in usage of the company’s service. For example, in the credit card industry this could be signaled through a customer’s decline in spending on his or her card.

Is this customer worth retaining?

This determination boils down to whether the post-retention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer.[3][4]

What retention tactics should be used to retain this customer?

For customers who are deemed worthy of saving, it is essential for the company to know which save tactics are most likely to be successful. Tactics commonly used range from providing special customer discounts to sending customers communications that reinforce the value proposition of the given service.

Niche marketing

A niche is a more narrowly defined customer group who seek a distinct set of benefits. Ä°dentified by dividing a segment into subsegments,distinct and unique set of needs,requires specialization, and is not likely to attract too many competitors.

Local marketing

Marketing programs tailored to the needs of local customer groups.

 

B. Discuss the types of target marketing strategies. (200-250 words each)

 

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Q.2 Explain the consumer buying decision process. 10 marks

(350-400 words)

 

Q.3 A. Discuss the Henry Assael model on buying decision behaviour. 5+5 =10 marks

 

B. Explain the five stages of Adoption Process. (200-250 words each)

 

Q.4 Describe the components of the micro environment of marketing 10 marks

(350 — 400 words)

 

Q.5 A. Explain the types of Marketing Information systems 5+5 = 10 marks

B. Discuss the different components of MIS (200-250 words each)

 

Q.6 Describe the factors to be considered while developing 10 marks

an Effective marketing mix. (350-400 words)