ipl-logo

Customer Segmentation And Targeting: A Case Study

1750 Words7 Pages

Customer Segmentation and targeting have been quite widely employed by big businesses across industries such as retail, financial services, telecom, travel, database marketing, etc. While strategizing marketing plans, or formulating a new promotion communication, marketers need to be careful segmenting and targeting customers. It would be not be cost-effective if, for example, an ad campaign is targeted to a company’s entire customer base. Such untargeted marketing promotion has less probability to have a high conversion rate and may be not be of any help to a company’s brand perception. More so, as a company’s email list grows with new prospects and customers it becomes essential to segment the master list into more manageable groups and address …show more content…

All customers have varying needs and desires, and hence they respond to different marketing campaigns in diverse ways. Prediction of these reactions and subsequent buying actions can be done quite accurately by the results obtained from RFM segmentation. Here are some general ideas for the different types of campaigns that may work best with different RFM segments that are obtained from mining customer purchase and behavior history:
1. High Recency, High Frequency and High Monetary: Most loyal customers and prospects should be rewarded with exclusive privileges that make them feel valued; For instance, some retailers automatically waive off shipping and delivery charges and/or provide other perks like discount coupons to their top most online customers
2. High Recency, Low Frequency and Low Monetary: Newly acquired subscribers are a part of this segment; they should receive a good first impression with welcome offers, product-usage tips or other information that new customers would find …show more content…

A tool that takes a more all-encompassing look at customer value than RFM is Customer Value, wherein a number of parameters may be involved in defining this value. For example, in banking industry customer value may involve a variety of metrics above and beyond the monetary value of spends on the credit card by the customer or savings in the account. Here a large number of metrics, like credit behavior, type of investments opted for, loan availed, tenure of customer with the bank and other details would increase the complexity to determine customer value but also help in making more an informed customer

Show More
Related

  • Est1 Task 4

    816 Words  | 4 Pages

    The segmentation process allows Company X to understand the changing needs of each demographic. Emerging opportunities can be easily identified in potential markets. To address retail customers within different industries accordingly Company X must develop an effective demographic segmentation strategy. The customer segments of Company X will be a diversified group. The groups are broken down into two main categories which are individuals and businesses.

    Read More

  • United Airlines Market Segmentation

    1027 Words  | 5 Pages

    Answer: (a): Market segmentation is the first step in defining and selecting a target market to pursue and penetrate. Basically, market segmentation is the process of splitting up an overall market into two or more groups/classes of consumers. Each group of consumers is called as a market segment. Each group (or market segment) should be similar in terms of certain characteristics or product/ service needs. In business world, market segmentation is considered to be a most important tool in enabling marketers to better meet customer needs and requirements.

    Read More

  • Case Study Of American Airlines Pricing Strategy

    806 Words  | 4 Pages

    INTRODUCTION “The moment you make a mistake in pricing, you 're eating into your reputation or your profits.” - Katharine Paine The above quote from the founder of KDPaine & Partners LLC and The Delahaye Group is quite apt. Pricing is quite often ignored by executives & leads to people not understanding how it can change the competitive game in an industry.

    Read More

  • Swot Analysis Of Ascentra

    860 Words  | 4 Pages

    • 11% of Ascentra’s members is Hispanic. This percentage excludes those members who are under 16 years of age. • The gross members total can be found on page 6 of Ascentra’s October HMA. • Since inception , Ascentra’s Hispanic membership has grown 101% •

    Read More

  • ALDI: Customer Relationship Management

    1275 Words  | 6 Pages

    Question 1 answer: Customer relationship management is mainly about building relationships with a company’s targeted profitable customers and maintaining that relationship through delivering customer value, as in how a consumer perceives a certain product and values it enough to buy it rather than buying the competitor’s product, and delivering customer satisfaction where the product meets the exact expectations the consumer had actually expected from the product or more, but not less. Companies can build customer relationships at many levels, depending on the nature of the target market (Kotler and Armstrong, 1988). Companies with many low-margin customers can develop basic relationships by which a company doesn’t get to know it’s consumers

    Read More

  • Peugeot Marketing Strategy

    1072 Words  | 5 Pages

    In other words, it is essential for corporations to divide and differentiate their customers into smaller groups according to their purchase criteria, common features, needs, desires, etc., so as to ensure that they will be competitive and profitable by building products and providing services that sell and satisfy their potential consumers. As Henry Claycamp states in his book ‘’A Theory of Market Segmentation’’, one of the most considerable and crucial developments in marketing is the fact that nowadays, companies give special importance to market segmentation strategies (p.388). Additionally, by conducting successful customer segmentation, a company may gain multiple benefits. First of all, companies have more probabilities to ensure future growths and be able to launch new products. Furthermore, by segmenting their customers they will gain a competitive market advantage and will be able to raise their market share and consequently earn more profits, fact which will also be translated by raising the percentage of loyal customers (Foundation of Marketing,

    Read More

  • Etsy: Case Review: Customer Relationship Management

    1053 Words  | 5 Pages

    1. Explain to Mrs. Wen what CRM is and how CRM is different from traditional marketing. Customer Relationship Management (CRM) is a term that refers to practices, technologies, and strategies that organizations use to oversee and analyze customer interaction and information. This is done through use of the consumers’ lifecycles, with the objectives of enhancing business relationships with customers, helping with customer retention, and increasing profitability. It is basically a system created by the company to interact with its customers effectively and efficiently.

    Read More

  • Apple's Target Market Analysis

    1625 Words  | 7 Pages

    Segmentation, Targeting and positioning, also known as STP are an essential part in marketing today. This model is important for generating marketing communication strategies and it aids the marketers to prioritize schemes and deliver personalized and pertinent messages to diverse audiences. This approach is audience oriented rather than product focused in terms of communication, which results in conveying appropriate messages to the members who are more commercially appealing. Segmentation benefits the managers in finding out the area on which they have to concentrate on in terms of geography, demographics, social factors or behaviors.

    Read More

  • Marks And Spencer Market Segmentation Strategies

    1384 Words  | 6 Pages

    BE201 TMA Draft Karim Mahmoud Ghweil Question 1: A. Market segmentation is the process strategy of dividing a product or service for the general or specific groups based on their preferences, style, perceptions, needs, and interests. As Marks & Spencer already segmented its customers in some ways. It used demographic segmentation in which it targeted people with the age of 30 and above and also with relatively good or high income. But why M&S used market segmentation in the first place and how is it beneficial?

    Read More

  • Marketing Segmentation Of Mercedes Benz

    916 Words  | 4 Pages

    Market are segmented in order to make it easier for businesses to target these segments according to the features and habits they exhibit. These segments must be definable, specific, profitable, and is has room to grow. The following outlines the segmentation for the market of Mercedes Benz broken down into demographic, behavioral and psychographic segmentation. Demographic Segmentation: Markets can be segmented by geography where the business would market its offering towards individuals living in a certain area.

    Read More

  • Four Building Blocks Of Competitive Advantage

    1014 Words  | 5 Pages

    The four building blocks of competitive advantage can be used to help a company become more profitable and stay ahead of their competition. The four factors are superior efficiency, quality, innovation, customer responsiveness. All four building blocks are important to any company. However, I believe that customer responsiveness is the most important because having loyal and happy customers can make or break any company. The four building blocks can help companies grow and become the leader in their industry over their rivals.

    Read More

  • Market Segmentation Of Carrefour

    1304 Words  | 6 Pages

    Carrefour had to segment their customers because they had different needs, behaviors, and preferences; therefore, it was difficult for the company to meet every consumer’s personal characteristics (Wedel and Kamakura 2012, p. 6). Carrefour also had to segment their customers because they needed to come up with a marketing mix that will help the firm meet the needs its customers in their target market. Market segmentation refers to the division of a market into segments that are identifiable and similar. These segments refer to a group of people or organizations that have one or more features in common, which prompts to have same product tastes and needs. According to Wedel and Kamakura (2012, p. 6-7), market segmentation is important because it helps the organization to use their resources efficiently and make better strategic decisions.

    Read More

  • Relationship Between Hospitality And Tourism Industry

    1572 Words  | 7 Pages

    First of all customer means A person who buys goods or services from a shop or business, loyalty means the state or quality of being loyal, faithfulness to commitments or obligations. So Customer loyalty is the key objective of customer relationship management and describes the loyalty, which is established between a customer and companies, persons, products or brands. “Customer loyalty is an essential aspect in any organization whether it is offering a good or providing a service. “Many organizations are looking for various ways to increase their customer loyalty as it has a positive effect on the profitability of the organization.” (Gremler 1996: 171, Abdullah et al. 2000: 826).The individual market segments should be targeted in terms of developing customer loyalty.

    Read More

  • Market Segmentation Of Unilever

    761 Words  | 4 Pages

    The process of market segmentation involves the division of a market into groups of smaller size whose needs, behaviour and characteristics are distinct from each other. These smaller groups or 'segments ' may require separate marketing strategies. There are four major market segmentation variables namely behavioural, psychographic, geographic and

    Read More

  • Dutch Lady Market Segmentation

    1004 Words  | 5 Pages

    1. MARKAT SEGMENTATION Market segmentation is a strategy that is generally used by a company to identify and define the target customers, and provide the supporting data for the marketing plan elements. There are five types of market segmentation which are demographic segmentation, geographic segmentation, psychographic segmentation, benefits segmentation and volume segmentation. • Demographic Segmentation Demographic segmentation is market segmentation according to age, family size, religion, race, gender, income and education. By using this segmentation, a company can categorize the needs of consumers more easily and target its consumers more accurately because demographics can segmented into several markets.

    Read More

More about Customer Segmentation And Targeting: A Case Study

Open Document