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Detailed Explanation to Market segmentation

2) What are some of the most common bases used for market segmentation?

5) Suppose you are the marketing manager for a new Ford sports car. How would you use intermarket segmentation to develop marketing strategies for Ford?

7) Suppose you are the owner of and operator of a small specialty store selling breads and pastries. How would you build a loyalty program to maximize customer loyalty and retention?

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2) What are some of the most common bases used for market segmentation?
Determining how to segment a market is one of the most important questions a marketer must face. Creative and effective market segmentation can lead to the development of popular new products, but unsuccessful segmentation can cost a great deal of money and still not yield the desired results. There are three main types of segmentation bases for businesses to consider—descriptive bases, behavioral bases, and benefit bases—each of which breaks down into numerous potential customer traits.
Example 1: Descriptive bases for market segmentation
Descriptive bases for market segmentation include a variety of factors that describe the demographic and geographic situation of the customers in a market. They are the most commonly used segmentation bases because they are easy to measure, and because they often serve as strong indicators of consumer needs and preferences. Some of the demographic variables that are used as descriptive bases in market segmentation might include age, gender, religion, income, and family size, while some of the geographic variables might include region of the country, climate, and population of the surrounding area.
Example 2: Behavioral bases for market segmentation
Behavioral bases for market segmentation are generally more difficult to measure than descriptive bases, but they are often considered to be more powerful determinants of consumer purchases. They include those underlying factors that help motivate consumers to make certain buying decisions, such as personality, lifestyle, and social class. Behavioral bases also include factors that are directly related to consumer purchases of certain goods, such as their degree of brand loyalty, the rate at which they use the product and need to replace it, and their readiness to buy at a particular time.
Example 3: Benefit bases
Businesses that segment a market based on benefits hope to identify the primary benefit that consumers seek in buying a certain product, then supply a product that provides that benefit. This segmentation approach is based upon the idea that market segments exist primarily because consumers seek different benefits from products, rather than because of various other differences between consumers. One potential pitfall to this approach is that consumers do not always know or cannot always identify a single benefit that influences them to make a purchase decision. Many marketers use a combination of bases that seem most appropriate when segmenting a market. Using a single variable is undoubtedly easier, but it often turns out to be less precise.
In other words, Market segmentation lies somewhere near the middle of a continuum of marketing strategies that range from mass marketing—in which a single product is offered to all customers in a market—to one-tone marketing—in which a different product is specifically designed for each individual customer in a market. Most businesses realize that since no two people are exactly alike, it is unlikely that they will be able to please all customers in a market with a single product. They also realize that it is rarely feasible to create a distinct product for every customer. Instead, most businesses attempt to improve their odds of attracting a significant base of customers by dividing the overall market into segments, then trying to match their product and marketing mix more closely to the needs of one or more segments. A number of customer characteristics, known as segmentation bases, can be used to define market segments. Some commonly used bases include age, gender, income, geographical area, and buying behavior
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Solution Summary

This solution responds to the questions in some detail on market segmentation. Examples and references are included.