What is an important component in determining psychographic characteristics quizlet?

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The first step in the segmentation process is to articulate the vision or objectives of the company's marketing strategy clearly. The segmentation strategy must be consistent with and derived from the firm's mission and objectives as well as its current situation—its strengths, weaknesses, opportunities, and threats (SWOT). Botticelli's objective, for instance, is to increase sales in a mature industry. The company, which sells olive oil, pasta, pasta sauces, and roasted red peppers,2 knows its strengths are its reputation for using quality ingredients.3 However, a weakness is that it may not currently have a product line that appeals to those who like Italian food but not the traditional options that are high in carbohydrates and heavy sauces. Identifying this potentially large and profitable market segment, and doing so before many of its mainstream competitors do, offers a great opportunity. However, following through on that opportunity could lead to a significant threat: competitive retaliation

Geographic: Continent: North America, Asia, Europe, Africa
Within the United States: Pacific, mountain, central, south, mid-Atlantic, northeast
Demographic: Age, gender, income, education
Psychographic: Lifestyle, self-concept, self-values
Benefits: Convenience, economy, prestige
Behavioral :Occasion, loyalty

organizes customers into groups on the basis of where they live. Thus, a market could be grouped by country, region (northeast, southeast), or areas within a region (state, city, neighborhoods, zip codes). Not surprisingly, geographic segmentation is most useful for companies whose products satisfy needs that vary by region.

Firms can provide the same basic goods or services to all segments even if they market globally or nationally, but better marketers make adjustments to meet the needs of smaller geographic groups.5 A national grocery store chain such as Safeway or Kroger runs similar stores with similar assortments in various locations across the United States. But within those similar stores, a significant percentage of the assortment of goods will vary by region, city, or even neighborhood, depending on the different needs of the customers who surround each location.

For a segmentation strategy to be successful, the customers in the segment must react similarly and positively to the firm's offering. If, through the firm's distinctive competencies, it cannot provide products or services to that segment, it should not target it. For instance, the Cadillac division of General Motors (GM) has introduced a line of cars to the large and very lucrative luxury car segment. People in this market typically purchase Porsches, BMWs, Audis, and Lexuses. In contrast, GM has been somewhat successful competing for the middle-priced family-oriented car and light truck segments. Thus, even though the luxury car segment meets all the other criteria for a successful segment, GM took a big risk in attempting to pursue this market.

Marketers must also focus their assessments on the potential profitability of each segment, both current and future. Some key factors to keep in mind in this analysis include market growth (current size and expected growth rate), market competitiveness (number of competitors, entry barriers, product substitutes), and market access (ease of developing or accessing distribution channels and brand familiarity)

This analysis provides an estimate of the profitability of two segments at one point in time. It is also useful to evaluate the profitability of a segment over the lifetime of one of its typical customers. To address such issues, marketers consider factors such as how long the customer will remain loyal to the firm, the defection rate (percentage of customers who switch on a yearly basis), the costs of replacing lost customers (advertising, promotion), whether customers will buy more or less expensive merchandise in the future, and other such factors.