Customer Segments (Part A) PDF

Topic 2: Customer Segments (PART A)  On completion of this topic you will be able to:  Understand the theory of customer segments  Define customer profiles of a retail business  Define customer needs.  Conduct basic research on customer needs  Understand product specificatio...

Topic 2: Customer Segments (PART A)  On completion of this topic you will be able to:  Understand the theory of customer segments  Define customer profiles of a retail business  Define customer needs.  Conduct basic research on customer needs  Understand product specifications  Explain the shopping behaviour of customers in a retail store  The Market A market consists of all the consumers who purchase specific goods and services. The market as a whole may be sub- divided into separate segments each of which we can call a separate market on its own. The Market  The Target Market Agroup or groups of people to whom a firm decides to direct its marketing efforts and its goods and services. This enables a more efficient and effective marketing strategy and creates the opportunity to subdivide the market into segments  Why is it important??  Estimate size of market it’s aiming to win over.  Forecast the growth of market  Identify competitors in market  Divide market into relevant segments  Create an appropriate marketing mix Target market by Gender Target market by Age  What is customer segmentation?  Customer Segmentation is the process of identifying and dividing subdivisions of a market into distinct customer groups that share similar characteristics.  Marketing Segmentation - Kotler  “Marketing Segmentation is sub- dividing a market into distinct and homogenous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix.”  Kotler P. and Armstrong, G 2013. Principles of Marketing, Prentice Hall: New York  Customer Segmentation enables retailers to: 1. Product development 2. Customized marketing programmes 3. Choose specific product features 4. Implement a range of service options 5. Appropriate product pricing  Customer Segmentation enables retailers to. 6. Focus marketing on customers 7. Build loyal relationships with customers 8. Improve customer service 9. Be competitive 10. Use company resources  Segmentation cont. 11. Improve products to meet customer needs 12. Increase profit potential 13. Group customers by factors 14. Facilitates customer relationship