Podcast
Questions and Answers
What are the major steps in designing a customer-driven marketing strategy?
What are the major steps in designing a customer-driven marketing strategy?
- Competitive analysis, market research, customer service, and sales forecasting
- Market segmentation, targeting, differentiation, and positioning (correct)
- Market analysis, product development, promotion, and pricing
- Advertising, sales, distribution, and branding
What did Best Buy do to serve its 'Angel' customers?
What did Best Buy do to serve its 'Angel' customers?
- Instituted a 20% restocking fee for all customers
- Reduced promotions for all customers
- Developed better service and stocked more items of interest to them (correct)
- Increased promotions for 'Angel' customers
Why did Best Buy delete 'Demon' customers from marketing lists?
Why did Best Buy delete 'Demon' customers from marketing lists?
- To adopt a customer-centric strategy
- To focus solely on online retailing
- To increase promotions for the 'Angel' customers
- To reduce costs associated with serving 'Demon' customers (correct)
What prompted Best Buy to reexamine its segmentation strategy and positioning strategies?
What prompted Best Buy to reexamine its segmentation strategy and positioning strategies?
Which of the following is NOT a major base for segmenting consumer and business markets?
Which of the following is NOT a major base for segmenting consumer and business markets?
How do firms identify attractive market segments and choose a market-targeting strategy?
How do firms identify attractive market segments and choose a market-targeting strategy?
What is the process of dividing a market into smaller segments with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes?
What is the process of dividing a market into smaller segments with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes?
Which of the following is NOT a key variable for market segmentation?
Which of the following is NOT a key variable for market segmentation?
What does demographic segmentation primarily focus on?
What does demographic segmentation primarily focus on?
What type of segmentation involves dividing a market into different groups based on social class, lifestyle, or personality characteristics?
What type of segmentation involves dividing a market into different groups based on social class, lifestyle, or personality characteristics?
Which variable is used to identify and target the affluent for luxury goods?
Which variable is used to identify and target the affluent for luxury goods?
What does behavioral segmentation primarily focus on?
What does behavioral segmentation primarily focus on?
Which type of segmentation addresses the fact that consumer needs and wants change with age?
Which type of segmentation addresses the fact that consumer needs and wants change with age?
What process involves avoiding stereotypes in promotions based on age and promoting positive messages when marketing to mature consumers?
What process involves avoiding stereotypes in promotions based on age and promoting positive messages when marketing to mature consumers?
What variable can offer new opportunities when neglected gender segments are targeted?
What variable can offer new opportunities when neglected gender segments are targeted?
What is the first step in designing a customer-driven marketing strategy?
What is the first step in designing a customer-driven marketing strategy?
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Study Notes
- Customer-driven marketing strategy involves major steps: market segmentation, targeting, differentiation, and positioning.
- Market segmentation: dividing a market into smaller groups with distinct needs or characteristics, often using variables such as geographic, demographic, psychographic, and behavioral.
- Geographic segmentation: dividing a market by nations, regions, states, counties, cities, and neighborhoods.
- Demographic segmentation: dividing a market based on demographics like age, gender, family size, income, occupation, education, race, religion, generation, and nationality. Age and life-cycle stage address the changing needs of consumers with age.
- Psychographic segmentation: dividing a market based on social class, lifestyle, or personality characteristics. Behavioral segmentation: dividing buyers into groups based on consumer knowledge, attitudes, uses, or responses to a product.
- Firms use segmentation to identify attractive market segments and choose a market-targeting strategy. Companies differentiate and position their products for maximum competitive advantage.
- Best Buy adopted a customer-centric strategy, segmenting customers into "Angels" and "Demon" shoppers, and focusing on Angels' shopping preferences and needs.
- Angels accounted for 20% of customers and generated bulk of profits, while Demons were extreme bargain hunters. Best Buy deleted Demons from marketing lists, reduced promotions that attracted them, and established a loyalty program for Angels.
- Targeting strategies include undifferentiated, differentiated, concentrated, and selective targeting. Firms should consider market size, market growth, competition, and firm strategy when choosing a targeting strategy.
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