Customer-Driven Marketing Strategy

Topics: Marketing, Market segmentation, Psychographic Pages: 5 (1553 words) Published: June 13, 2013
Customer-Driven Marketing Strategy
1. Best Buy: Embracing the Angels and Ditching the Demons. “Best Buy’s “customer-centricity” strategy serves its best customer segments better while sending less attractive customers packing. The result: sales are jumping despite the recently gloomy economy.” There’s no such thing as a bad customer, right? And the more customers, the merrier. Makes sense, right? After all, more customers mean more money in the till. As it turns out, however, that’s often not so. These days, many marketers are discovering a new truth: Some customers can be way, way wrong for the company-as in unprofitable. And trying to serve any and all customers can mean serving none of them well. Instead, companies need to make certain that they are serving the right customers and serving them in the right way. They need to decide who their best potential customers are-and who they aren’t. Few companies do that better than Best Buy, the nation’s leading consumer electronics. Six years ago, Best Buy embarked on a “customer-centricity” segmentation strategy by which it set out to identify its best customer and win their loyalty by serving them better. At the same time, it identified less attractive customers and began to send them packing-off to Wal-Mart or some other competitor. Best Buy began in 1966 as a small Minnesota home and car stereo chair. It has since blossomed into a profitable $45 billion mega retailer, with 1,023 U.S. stores and another 2,835 stores worldwide. Today’s Best Buy stores are huge, warehouse like emporiums featuring a treasure trove of goods-from consumer electronics, home office equipment, and appliances to software, CDs, and DVDs-all to low discount prices. “At Best Buy, customer-centricity means listening to target customers and helping them use technology the way they dreamed. ”We’re about people. People just like you. We really mean it, really.”” 2. Market segmentation

Buyers in any market differ in their wants, resources, locations, buying attitudes, and buying practices. Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. 3. Segmenting Consumer Markets

There is no single way to segment a market. A marketer has to try differentiation variables, alone and in combination, to find the best way to view market structure. a. Geographic segmentation
Dividing a market into different geographic units, such as nations, states, regions, countries, cities, or even neighborhoods. b. Demographic Segmentation
Demographic segmentation is dividing the market into segments based on variables such as age, gender, family, size, family life cycle, income, occupation, education, religion, race, generation, and nationality. c. Age and life-cycle

Consumer needs and wants change with age. Some companies use age and life-cycle segmentation, offering different products or using different marketing approaches for different age and life-cycle groups. Dividing a market into different age and life-cycle groups is the definition of Age and Life-Cycle segmentation. d. Gender segmentation

Gender segmentation means dividing a market into different segments based on gender. e. Income segmentation
The marketers of products and services such as automobiles, clothing, cosmetics, financial services, and travel have long used income segmentation. Many companies target affluent consumers with luxury goods and convenience services. For example, luxury hotels provide special packages to attract travelers. f. Psychographic Segmentation

Psychographic segmentation divides buyers into different segments based on social class, lifestyle, or personality characteristics. People in the same demographic group can have very different psychographic characteristics. g. Behavioral segmentation

This segmentation is dividing a market into segments based...
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