Chapter 7: Customer Relationship Management

market fragmentation
creation of many consumer groups due to a diversity of distinct needs and wants in modern society
target marketing strategy
dividing total market into different segments on basis of customer characteristics
process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics
segmentation variables
dimensions that divide the total market into fairly homogeneous groups, each with different needs and preferences
segmentation variables
dimensions that divide the total market into fairly homogeneous groups, each with different needs and preferences
Generation Y
group of consumers born between 1979 and 1994
statistics that measure observable aspects of population, including age, gender, etc
generational marketing
members of a generation who tend to share the same outlook and priorities
Generation X
group of consumers born between 1965 and 1978
baby boomers
people born between 1946 and 1964
cultural diversity
actively seeking people of different races and sexes
segmentation by combining geography and demographics
so that people who log on in different places will see ad banners for local businesses
use of psychological, sociological, and other factors to construct market segments
VALS2 (values and lifestyles)
divides U.S. into 8 segments
behavioral segmentation
technique that divides consumers into segments on the basis of how they act toward feel about, or use a good or service
80/20 rule
a marketing rule of thumb that 20 percent of purchases account for 80 percent of a product’s sales
long tail
a new approach to segmentation based on the idea that companies can make money by selling small amounts of items that only a few people want, provided they sell enough different items
usage occasions
an indicator used in behavioral market segmentation based on when consumers use a product most
strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn them
target market
the market segments on which an organization focuses its marketing plan and toward which it directs to marketing efforts
segment profile
description of the “typical” customer in a segment
undifferentiated targeting strategy
appealing to a broad spectrum of people
differentiated targeting strategy
developing one or more products for each of several distinct customer groups and making sure these offerings are kept separate in the marketplace
concentrated targeting strategy
focusing a firm’s efforts on offering one or more products to a single segment
custom marketing strategy
an approach that tailors specific products and the messages about them to individual customers
mass customization
an approach that modifies a basic good or service to meet the needs of an individual
develop a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition
redoing a product’s position to respond to marketplace changes
retro brand
once popular brand that has been revived to experience a popularity comeback often by riding a wave nostalgia
brand personality
distinctive image that captures a good’s or service’s character and benefits
perceptual map
technique to visually describe where brands are “located” in consumers’ minds relative to competing brands
customer relationship management (CRM)
systematic tracking of consumers’ preferences and behaviors over time in order to tailor the value proposition as closely as possible
any point of direct interface between customers and a company online, by phone, or in person
share of customer
percentage of an individual customer’s purchase of a product that is a single brand
lifetime value of customer
potential profit a single customer’s purchase of a firm’s products generates over the customer’s lifetime
customer equity
financial value of a customer relationship throughout the lifetime of the relationship
customer experience management (CEM)
concept of holistically aligning a firm’s people, processes, systems, and strategies to maximize the customer’s experience with all aspects of your firm and its brands
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