Marketing Management: The Big Picture

chapter five

SEGMENTATION

“Understand the Differences; act on the commonalities.”

—Andrew Masondo, African National Congress

After studying this chapter you should be able to:

1. Describe the role segmentation plays in marketing strategy
2. Describe the types of segmentation variables and how to use them
3. Compare the concepts of Main and Dynamic Benefit
4. Explain the key criteria in segmenting a market
5. Select the main and dynamic benefit
6. Describe the steps in the segmentation process
7. Integrate segmentation with other elements of the Big Picture

Best Buy's Customer-Centricity Effort

In 2006 Best Buy, the largest U.S. electronics retailer, announced a sweeping customer-centricity project designed to improve the growth and efficiency of its business. At the time, Best Buy accounted for close to 20% of the consumer electronics retail market in the United States and Canada. The firm was also the darling of equity analysts, having delivered steady earnings per share growth, with returns superior to those of Microsoft and Intel throughout the 1990s.

Since becoming CEO in June 2002, Brad Anderson had made bold moves to continue the growth trajectory of the 1990s. These moves included Best Buy's effort to shift its emphasis from customer acquisition through new store openings to customer retention by adding services and carefully examining the product mix and the stores' customer focus. In ...