1. What segmentation methods would you suggest for a small entrepreneur starting her own business selling gourmet chocolates? Justify why you would recommend those methods.

It is important to understand that segmentation is done to divide the target market into groups so that a targeted approach can be used for each group. If a small entrepreneur is looking to sell gourmet chocolates to customers, then he/she can choose segmentation method of demographics. He/she needs to look at age group of people like who would be most considerable consumers of this product. As per this demographic method, the chocolates should be sold to children and teen age people. There can be other segment of adults and older people as well.

2. You have been asked to identify various segments in the market and then a potential targeting strategy. Describe the segments for a pet supply store, and then justify the best targeting strategy to use.

            A pet supply store can identify different segments on the basis of types of pets such as dog, cat & fish. For instance, if pet supply store identifies dog segment for its targeted strategy, then next step of the strategy would be to find segments, which are more profitable, substantial as well as responsive. Such segment could be dog owners, who keep dogs as pets in their houses. Different owners should be targeted with various breeds & sizes of dogs.

3. What types of products would you use demographic segmentation for? How about psychographic segmentation? Explain how these products differ.

            There are various factors to consider for demographics segmentation such as gender, income level, age, occupation etc. For this kind of segment, the suitable product can be like clothes, which can be designated as per age, gender or income level. On the other hand psychographic segmentation considers products on the basis of their priority. For instance, a customer may buy luxury vehicles as they like luxury products, but there may be someone who may purchase hybrid vehicles, who gives priority to environment.

4. You have been asked to evaluate the attractiveness of a group of identified potential market segments. What criteria will you use to evaluate those segments? Why are these appropriate criteria?

            The attractiveness of potential identified market segments can be evaluated with different kind of criteria. For instance, the first criteria is “responsive”, which means that how customers response positively to the products offered by a company. The other attractive criteria could be “profitable” that what kind of profitability marketers can get from a certain segments. In addition to that other important attractiveness criteria could be reachable, identifiable, and substantial etc and these criteria are certainly appropriate ones for the evaluation.

Chapter 10 - Marketing Applications

1. A large hardware store collects data about what its customers buy and stores these data in a data warehouse. If you were the store’s buyer for lawn equipment, what would you want to know from the data warehouse that would help you be a more successful buyer?

            It is quite important for businesses to know that what kind of products are bought by their customers. If a hardware stores is collecting the information about its customers that what they usually bought, then such data can be extremely important for a future buyer who want to buy lawn equipment. It is important for the buyer to know that what kind of lawn equipment was mostly purchased by the customers. It would help to understand that which lawn equipments are more common to use and buy.

5. A consumer package goods company (e.g., Pepsi) has just developed a new beverage. The company needs to estimate the demand for such a new product. What sources of syndicated data could it explore?

            The companies can always look at syndicated data when they are looking to make estimation for demands of new product in any given market. For instance, if Pepsi is looking to make estimate about demand of its new beverage, then they can use syndicated data of their potential market. They can look into this data in terms of current size of the market to know its actual potential. When they will have information about market potential and size, then it would be easy to measure as well as forecast demand for such market.

7. Best Buy has an extensive loyalty program, Best Buy Reward Zone, that allows it to track its customers’ purchasing habits over time. How can Best Buy use such big data to improve sales?

            The data collected by “Best Buy” can be instrumental for them in so many ways. They can easily customize their marketing efforts for different groups of customers by using this big data. For example, the company can use this data to know that what kinds of products are purchased by certain kind of customers. Then they can make an advertisement with relevant products appealing those customers with more targeted approach. This kind of marketing will deliver more positive results for Best Buy than any other marketing method.

9. Manuel is planning to launch a new gourmet taco truck and is trying to decide where he should park his truck and what features and prices would entice consumers. He sends a request for proposal to four marketing research vendors, and three respond, as described in the table below. Which vendor should Manuel use? Explain your rationale for picking this vendor over the others.

            The details mentioned for Vendor B looks to be more considerable for Manuel as it has different important elements for them. The first reason to choose this vendor is the fact that they have also done the same task for a competitor of Manuel, which means that they actually experienced in this regard. Moreover, they can also provide some insight from competitors’ areas of interest and what they wanted to achieve through such proposals. If Manuel competitor has used this vendor, then it is certainly viable for them to try this vendor to see that what results they obtain for them.