...Market Segmentation - A framework for determining the right target customers BA-thesis May 2010 By Nynne Larsen Supervisor: Mariette Ulbæk Aarhus School of Business Table of contents 1. 2. Summary ........................................................................................................................................ 1 Introduction ................................................................................................................................... 3 2.1 Delimitation ............................................................................................................................................. 4 2.2 Method .................................................................................................................................................... 4 3. Defining a target audience .............................................................................................................. 5 3.1 Market segmentation .............................................................................................................................. 6 3.2 Demographic segmentation .................................................................................................................... 7 3.2.1 Age and life-cycle segmentation....................................................................................................... 7 3.2.2 Gender segmentation ..........................................................................
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.................................................................................................................................. 1 Introduction ................................................................................................................................... 3 2.1 Delimitation ............................................................................................................................................. 4 2.2 Method .................................................................................................................................................... 4 3. Defining a target audience .............................................................................................................. 5 3.1 Market segmentation .............................................................................................................................. 6 3.2 Demographic segmentation .................................................................................................................... 7 3.2.1 Age and life-cycle segmentation....................................................................................................... 7 3.2.2 Gender segmentation ....................................................................................................................... 8 3.2.3 Income segmentation ....................................................................................................................... 8 3.2.4 Generation segmentation...
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...segmentation and targeting strategy? 1.) The comprehensiveness and appropriateness in the data from exhibit 12a and 12b for the segmentation analysis are very accurate and on point. The questions asked in exhibit 12a, the segmentation variables, are really right to the point and they are getting as much information as possible form customers about their knowledge of fashion. Also, exhibit 12a segmentation variable questions are very helpful because they are finding out important information from the customers to help target their preferences with bras, as well as great information on how to better market for their bras. Exhibit 12b, descriptor variables, is also appropriate because it helps with targeting different segments of customers specifically. Also, this information helps to specify how to market, when/where to market, and to whom to market different information to different segments of customers. - My team would change from the questionnaire a few things that could help impact the segmentation analysis. The questions from exhibit 12a were great, but exhibit 12b the questions could be tweaked a little. The level of education question is unnecessary for this topic of fashion. Also, you can take out from other people, modest, orthodox, and rational categories. The questionnaire could ask for marital status, full-time/part-time jobs, occupations, and media consumption. Q2. Run...
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...Practice #1 Harley Davidson Case Q1. Define the term ‘market segmentation’. Describe the basic steps involved in market segmentation. What is the end goal of market segmentation? Market segmentation means dividing mass markets into distinct groups of buyers with relatively homogeneous preferences, attitudes, or behaviors, which distinguish them from the rest of the market. The basic steps involved in market segmentation are; define and analyze the market, Identify and describe potential segments, Select the segments to be served, Determine the product positioning strategy, Design and implement the marketing program. The goal of market segmentation is to target the “best” prospective customers and therefore, those most likely to buy specific products or services. Q2. Describe at least four generic bases (Note: demographic characteristics count as one of the four) for segmenting the market and provide an example each. Q3. Describe the market segment(s) Harley serves – find and use at least one outside source beyond the articles provided – to describe in detail two different market segments targeted. Q4. Define the term ‘market potential’. How does ‘market potential’ relate to the concept of a ‘target market’? Q5. Select one of the segments you identified in Q3. And describe this market segment demographically. Consult secondary data (e.g., U.S. Census information) to estimate the size of this market segment. Hint: it will not be possible to provide an exact number...
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...Case Analysis Questions for Case 7-2 (pp. 222-223): Cosmetics Giants Segment the Global Cosmetics Market 1. What product lines do L’Oreal offer in its home market (France) and other developed markets (USA, UK, etc.)? How does L’Oreal segment and target in these established markets? (You need to visit L’Oreal website and conduct additional online research to find relevant information and answer this question.) France: • Makeup (tint/tone, lips, eyes, nails) • Facials (organized by type of care and skin type, age, brand, benefits) • Body care (beauty and body, sunscreen, sun care, brand) • Coloring (organized by color and brand) • Hair care (routine care, hair type, brand) • Styling (organized by benefits, brand and studio line) • Men’s products (care/cleaner, shave, styling, deodorant, shampoo/hair care, brand, hair color) • Makeup and hair accessories. USA: • Makeup (eyes, face, lips, nails, etc) • Hair • Skin care (moisturizers, treatments, cleansers and makeup removers, sun care, self tanner) • Hair color • Hair styling • Hair care UK: • Skin care (product type and brand) • Makeup (face, eye, lip, nails, brands) • Hair color (color, permanence, brand) • Hair care (hair type, product type, brand) • Hair Styling (desired effect, product type, brand) • Self tan (tanning type, product type, brand) • Gifts • Men (face, deodorant, hair, product type...
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...Discrimination) to find the optimal number of segments in the market. Explain where you decided to cut the dendogram and why? When we ran the segmentation a dendogram was created and this provided us with information regarding the amount of lost information when we clustered the data together. The top of the dendogram is where all clusters are grouped together and most information is lost. The bottom of the dendogram is where all the clusters are not grouped together and the information is most similar. According to the first dendogram that was created, we determined that the optimal number of segments is four. This is the optimal number of segments because at this point the first significant jump occurs from .55 to .89. Four clusters is the best approach because you lose information from 4-3 and when going from 4-5 the information is too scattered and becomes irrelevant and unfocused. This is why 4 clusters is the best approach. Q2. Use the number of the segments you determined in Q1 and re-run “Segmentation” from the Segmentation and Classification tool (enable the Discrimination). This time, in the Dendogram sheet, instead of 9 segments you should see the specific number of segments you determined. What are the key segments of import beer drinkers? How can you label them? Explain the profile of each segment according to the segmentation (not discrimination) variables used in the analysis. After determining that four segments would be the best choice for Kirin USA we are...
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...will use STP to analyze Shell’s sucessful marketing strategy. 1. Segmentation Oil station market consists of buyers who differ in one or more ways, so Shell need first segment its potential consumer market. There are several major variables that can be used in segmenting consumer markets, including geographic, demographic, psychographic, and behavioral variables. In this case, SOPC used the latter two variables to segment its market. It chose “personality” and “benefit” as its segmentation criteria, of which the former belongs to psychographic segmentation and the latter belongs to behavioral segmentation. * Why to choose these two criteria? According to the requirements for effective segmentation, SOPC has to make sure that its market segments are measurable, accessible, substantial, differentiable, and actionable. The requirement of differentiable market segments means that the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. Neither geographic segmentation nor demographic segmentation can be effective, because those criteria do not affect Shell’s customers’ attitude of stopping their automobiles at gasoline stations. That’s why SOPC aimed at customer needs and chose personality and benefit as segmentation criteria. We can find that Figure1.1 gives a very clear market segmentation: 10 market segments are determined according to two criteria – personality and benefits. Segmentation criteria...
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...Marketing Research Project Types and Examples 1. Satisfaction Studies: Obtain measures of satisfaction for different attributes of products and services, and relate this to customer type or segment, experience, demographics etc. Data/Methodology: Satisfaction studies typically require a mix of qualitative and quantitative approaches. At an early stage, qualitative research techniques such as focus groups or one-on-one customer interviews might reveal unexpected dimensions of customer dissatisfaction. Usually customer satisfaction measures and information on customer type are collected by use of a survey. A satisfaction survey frequently includes items dealing with importance and performance of various attributes, and some information on customer type (heavy/light user, experience and other segmentation variables). In addition to simple tabulation, analysis could include cross-tab and regression analysis to understand predictors of satisfaction. Are all segments equally satisfied? Why/why not? Is performance adequate on the most important attributes? Why/why not? EXAMPLE PROJECT: Research Purpose: Find areas of improvement in the order experience for an online retailer selling specialty dog chew-toys. Research Objectives: Using a sample of current customers, measure importance of key dimensions of the purchase experience, and current performance along these dimensions and relate these to purchase frequency, customer type and demographics. Possible Recommendations: Redesign the...
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...Final Project Guidelines Chapter 2 • What should Sonic’s mission be? • In what competitive spheres (industry, products and applications, competence, market-segment, vertical, and geographic) should Sonic operate? • Which of Porter’s generic competitive strategies would you recommend Sonic follow in formulating its overall strategy? Chapter 3 Scan Sonic’s external environment for early warning signals of new opportunities and emerging threats that could affect the success of the Sonic 1000 Smartphone. Using Internet or library sources (or both), locate information to answer three questions about key areas of the macroenvironment. • What demographic changes are likely to affect Sonic’s targeted segments? • What economic trends might influence buyer behavior in Sonic’s targeted segments? • How might the rapid pace of technological change alter Sonic’s competitive situation? Chapter 4 Your next task is to consider how marketing research can help Sonic support its marketing strategy. How can Sonic can measure results after the marketing plan is implemented. She wants you to answer the following three questions. • What surveys, focus groups, observation, behavioral data, or experiments will Sonic need to support its marketing strategy? Be specific about the questions or issues that Sonic needs to resolve using marketing research. • Where can you find suitable secondary data about total demand for Smartphones over the next two years? Identify at least two sources...
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...Kirin back in 1990s. To surpass Sapporo in the United States, Kirin needs to sell about 300,000 to 400,000 incremental cases of beer in the U.S. market. It plans to do that by introducing new product(s), rather than by increasing advertising. Among the major questions to answer are: 1) the identification of the U.S. import beer segments that would respond more favorably to a new Kirin product concept, 2) the positioning of the Kirin beer in the U.S. import beer market, and 3) the type of a new product that will be the most successful among its competition. QUESTIONS: (10 points) Q1. Run “Segmentation” to find the optimal number of segments in the market. Explain where you decided to cut the dendogram and why? (10 points) Q2. What are the key segments of import beer drinkers? How can you label them? Explain the profile of each segment according to the segmentation (not discrimination) variables used in the analysis. (10 points) Q3. This time, explain the demographics of each segment based on the Discrimination output sheet. (10 points) Q4. Evaluate the description of Ichiban Shibori and Kirin’s strategy in the United States in the case and the characteristics of the segments in the U.S. import beer market based on your analysis. Which segments (among the segments you found in Q.2) should Kirin target in the Unites States? Why? (15 points) Q5. Now, look at the results of the Perceptual Map. What are the most similar and dissimilar products to Kirin? Also, what are the...
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...International of Washington Incorporation a publicly traded company in Washington Stock Exchange. Bothe these companies carrying on the business of global logistics solutions provider, helping their customers to improve their supply chain management. The holding company was incorporated in 1979, with only 5 branches worldwide. After having operated for 28 years, today the company has become an industry legend, with 226-branch network, strategically placed at major points covering all five continents in the globe, and employing over 10,000 professionals. This has been the competitive advantage Expeditors enjoy over most of its competitors in the global market place. The local company was incorporated in 1996, as one of the branches in their global network, which too has a similar growth in the local logistics market. The major services available to satisfy the logistics needs of customers include Air and Ocean imports and exports, Cargo Consolidation, Warehousing, Distribution and Customs Brokering. However, the logistics services such as Cargo Consolidation, Warehousing and Distribution are still not popular...
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...Market Segmentation and Product Positioning Assignment One January 18, 2011 Abstract The key to successful product implementation in today’s national enterprise system is the effective marketing of a new product with the company’s line of existing products. As stated by Iacobucci (2010) (p.3), marketing is defined as an exchange between a company and its customers. In simple terms, the customer wants something from the company or firm and vice versa. In previous times, a company would manufacture a product they thought the customer would want and/or need. The customer purchased that product because of a pending need which basically meant that marketing used to be product oriented. However, marketing today is more that an advertisement for goods and services in an attempt to attract new business. We live in a customer orientated and empowered marketing environment (p.5). We realize the importance and ramifications of having an exchange with our customers and developing a relationship with them. It is this exchange of information between our company and our existing as well as future customers that secures our position in our target market. Our company is a regional tool distributor located in the north eastern section of the United States. Our customer base consists of several major retailers, nationally known in the retail and wholesale tool industry. We use the brand label Steel City Tools for marketing and distribution of our products. This research...
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...Marketing Strategy Notes for Cravens/Piercy Book Chapters 1-5 Chapter 1- Market Driven Strategy Know the what and why on all of these: Market driven Strategy = the market and the customers that form the market should be the starting point in business strategy formulation. See page 3. What does this mean for the auto business, a restaurant, a college or university, what would they do? Related topics foundational for a market driven strategy: Marketing Concept or Orientation – says that the key to success in business is to identify and satisfy needs and wants of the buyer. The customer is king. This contrast to the production orientation/concept which focuses on how to make the product at low cost, and the selling concept/orientation which focuses on promoting what you want to sell. In the production and selling orientations the company makes what it wants to make and tries to get the consumer to buy it. With the marketing orientation the company first figures out what people want to buy, then makes it, and then tells them about it. Market Oriented/ Market Orientation – see page 4. Means: Customer is focal point of company’s total operations Customer Focus Cross Functional Coordination Competitor Intelligence Result – superior performance Creating Value – must deliver benefits in excess of costs (value), the greater the excess the better. (Auto and college as examples) Note that we can’t do all things for all people: ...
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...Marketing Strategy Notes for Cravens/Piercy Book Chapters 1-5 Chapter 1- Market Driven Strategy Know the what and why on all of these: Market driven Strategy = the market and the customers that form the market should be the starting point in business strategy formulation. See page 3. What does this mean for the auto business, a restaurant, a college or university, what would they do? Related topics foundational for a market driven strategy: Marketing Concept or Orientation – says that the key to success in business is to identify and satisfy needs and wants of the buyer. The customer is king. This contrast to the production orientation/concept which focuses on how to make the product at low cost, and the selling concept/orientation which focuses on promoting what you want to sell. In the production and selling orientations the company makes what it wants to make and tries to get the consumer to buy it. With the marketing orientation the company first figures out what people want to buy, then makes it, and then tells them about it. Market Oriented/ Market Orientation – see page 4. Means: Customer is focal point of company’s total operations Customer Focus Cross Functional Coordination Competitor Intelligence Result – superior performance Creating Value – must deliver benefits in excess of costs (value), the greater the excess the better. (Auto and college as examples) Note that we can’t do all things for all people: ...
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...Market Segmentation And Product Positioning Market Segmentation And Product Positioning The hypothetical company for the purpose of creating a marketing plan is Healthy Hair, Inc. The company brand name is Boss and its product offering is a unisex shampoo and conditioner in one aimed primarily at African American female and males between the ages of 18-34. According to marketing research company Mintel, sales of black hair care products in 2008 exceeded $165 million. Although a third of those sales went to corporate conglomerates like L’Oreal and Alberto Culver, who own many ethnic product lines from Soft-Sheen Carson to Mizani, there are still many independent African-American players in the hair product game (Humphrey 2010). This paper will discuss 1) The marketing segment for Healthy Hair, Inc., and why this segment was selected, 2) The target market and why these customers are targeted, 3) Healthy Hair, Inc. strengths, weaknesses, opportunities, and threats (SWOT), 4) The market position for the product. Identify the marketing segment for the product and explain why this segment was selected; The Segment A market segment is a group of customers whose likes are comparable (Iacobucci, 2010). The marketing segment for the product is based on demographics, geographic, psychological, and behavior data. Demographics The product will be geared toward African American men and women ages 18-34. The education level and income...
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