MK0012-SLM-Unit-08

Retail Marketing Unit 8

Sikkim Manipal University Page No. 149

Unit 8 Retail Market Segmentation

Structure

8.1 Introduction

Objectives

8.2 Importance of Market Segmentation in Retail

8.3 Criteria for Effective Segmentation

8.4 Dimensions of Segmentation

Geographic segmentation

Geo-demographic segmentation

Demographic segmentation

Psychographics segmentation

Behaviouristic segmentation

Demographic-psychographics segmentation (Hybrid approach)

8.5 Limitations of Market Segmentation

8.6 Summary

8.7 Terminal Questions

8.8 Answers

8.1 Introduction

The retail marketing strategies and retail promotions, which you have

already studied, are directed towards specific group of customers, known as

market segments. The concept of market segmentation emerged as an

extension of the marketing concept in the latter part of 1950s. It is based on

the simple observation that all the existing and potential consumers are not

alike: there are significant differences in their needs, wants, tastes,

background, income, education and experience, etc., and these

characteristics change over time with lifestyle changes. Had they been alike,

it would have eliminated the need to have different variations of the same

basic product and one promotional campaign is all that would have been

needed. For example, there would have been only one type of soap, one

detergent, one car, one computer, one washing machine and so on.

Objectives

After studying this unit, you should be able to:

Explain the importance of market segmentation

Discuss the criteria for effective segmentation



Identify the dimensions for market segmentation

State the limitations of market segmentation

8.2 Importance of Market Segmentation in Retail

A market segment is a portion of a larger market in which the individuals,

groups, or organisations share one or more characteristics that cause them

to have relatively similar product needs.

Segmentation studies are used to uncover needs and wants of specific

groups of consumers for whom the marketer develops especially suitable

products and services to satisfy their needs.

Marketers also use these studies to guide them in redesigning,

repositioning, or targeting new segments for the existing product. For

example, the heavy user adult market has been targeted for Johnson baby

shampoo. For sensitive skins, Dove has come out with a variant, Dove

Gentle Exfoliating Bar (it has a pH range of 6.5 - 7.5, almost neutral, neither

acidic nor alkaline).

Segmentation studies help in identifying the most appropriate media for

promotional messages. Almost all media vehicles use segmentation studies

to determine the characteristics of their audience and publish their findings

to attract marketers seeking a similar audience.

Segmentation is an important input to marketing planning because it can be

used to formulate company "product-market" objectives, by which the

enterprise may: define its markets, position ranges of brands and product

varieties, identify gaps which offer significant opportunities for expansion or

new product positioning and rationalize policies for existing brands, products

and mixes.

Market segmentation plays a dual role, namely as a marketing tool, and as a

basic input to business planning. There are three main reasons for the

importance of market segmentation. These are:

Market fragmentation: it is caused by demographic and lifestyle

changes, new product and process developments and intense market

competition/some markets, which once had a homogeneous character,

has now split into a variety of consumer groups, each with different

tastes and preferences.



The development of retailer power: with this, the relative advantage

obtained from bulk buying, the use of retailers' brands, and policy

limitations on the merchandise stocked, all combined to put the

manufacturer or supplier at a disadvantage. At the same time

concentration has occurred amongst retail companies, leaving a small

number of very large companies as well as a large number of smaller

retailers.

The volume trap: this situation occurs when suppliers who are capable

of volume production and distribution to retail multiple chains dominate

the markets for commodity type products (like plant-baked bread). But to

avoid this situation, marketers can use segmentation. For example,

value-added or non-standard items are now frequently targeted on

customer segments which seek to avoid the purchase of standardized

products, whether these are foodstuffs, clothes, computers or industrial

machinery. Alternatively, production arrangements may be designed to

be flexible enough to supply target markets in a large number of

relatively small and specialized niches, such as in the market for

industrial or aviation control systems.

8.2.1 Marketing complex

Marketing departments use segmentation so they can target their products

more accurately. It affects each of the 4Ps in their marketing mix. If the

product is effectively segmented a company will be able to promote the right

product, at the right price and use the right distribution to reach the place

where the consumers are. Now look at the way the 4Ps are used in market

segmentation.

Product

Companies produce a wide range of products or variations that is meant for

different groups or segments. For example, a car manufacturer will often

have a range that includes a family model, an executive model and a sports

model. Lifestyle segmentation will be used to develop their product line and

to target their products.

Price

There are obvoius linkages between price and quality, but not all customers

can afford to buy the most expensive goods. There is a large range of

televisions on the market, for example, each with slightly different features.



Within this range of products, there will also be a range of prices to cater for

varying disposable incomes.

Promotion

Studying how a product is advertised can reveal its target market. Recently

Nokia, a leading mobile phone company, used advertising campaigns that

varied for men and women. The male phone was pictured in black and

white, and all its features and business applications described. The female

phone was in bright colors, and was pictured as a matching accessory to go

with a woman's lipstick and handbag. You may not agree with this

stereotyping, but it is a good example of gender segmentation.

Place

It is very important for firm to know where its target market is. A producer of

automobile parts needs to identify areas where automobile companies are

located. The firm would have to consider how best to get its product to these

areas.

Self Assessment Questions

1. Segmentation often plays a dual role, one as a marketing tool and

another as a basic input to ____________ .

2. Market fragmentation is usually caused by _________ and __________

changes.

8.3 Criteria for Effective Segmentation

Marketing managers should ensure that the segmentation passes through

six criteria based acid tests. As a student of marketing, you need to

understand what makes a good segmentation so that in the event of doing

segmentation in your workplace, you can test your decisions on these

grounds. These six criteria include identity; accessibility, responsiveness,

size, measurability and nature of demand.

1. Identity: The marketing manager must have some means of identifying

members of the segment – i.e. some basis for classifying an individual

as being or not being a member of the segment. There must be clear

differences between segments. Members of such segments can be

readily identified by common characteristics, and display similar

behavior.



2. Accessibility: It must be possible to reach the different segments in

regard to both promotion and distribution. In other words, the

organization must be able to focus its marketing efforts on the chosen

segment. Segments must be accessible in two senses. First, firms must

be able to make them aware of products or services. Second, they must

get these products to them through the distribution system at a

reasonable cost.

3. Responsiveness: A clearly defined segment must react to changes in

any of the elements of the marketing mix. For example, if a particular

segment is defined as being cost-conscious, it should react negatively to

price rises. If it does not, this is an indication that the segment needs to

be redefined.

4. Size: The segment must be reasonably large to be a profitable target. It

depends upon the number of people in it and their purchasing power.

For example, makers of luxury goods may appeal to small but wealthy

target markets whereas makers of cheap consumption goods may sell to

the large number of persons who are relatively poor. The idea is that

enough potential buyers must exist to cover the costs of production and

marketing required in that segment. This is often called as substantiality.

5. Nature of Demand: It refers to the different quantities demanded by

various segments. Segmentation is required only if there are market

differentiation in terms of demand. The marketing manager should not

only be able to find out the total demand but also the differences in

demand patterns in each of these segments.

6. Measurability: The purpose of segmentation is to measure the

changing behavioral pattern of consumers. For example, the segment of

a market for a car is determined by a number of considerations, such as

economy, status, quality, safety, comforts etc.

Activity 1:

‘Is it really important for the retailers to segment the market or they can

also do well without it’. Put down your thoughts.




3. The members of a particular segment should posses some _________

features.

4. A segments accessibility is defined in terms of _________ and

_________.

8.4 Dimensions of Segmentation

Markets are complex entities that can be segmented in a variety of ways. It

is an important issue to find an appropriate segmentation scheme that will

facilitate target-marketing, product positioning, and developing successful

marketing strategies and action programmes.

A segmentation variable is a characteristic of individuals, groups or

organisations that marketers use to divide and create segments of the total

market. One approach to segmentation is on “a priority” basis. In this case,

the marketer may assume that differences must exist among heavy users

and light or medium users of a product category. Segmentation descriptors

fall under four major categories and include geographic variables,

demographic variables, psychographic variables, and behaviouristic

variables.

Geographic variables focus on where the customers are located.

Demographic variables identify who the target customers are.

Psychographic variables refer to lifestyle and values.

Behaviouristic variables identify benefits customers seek, and product

usage rates.

Before collecting any data on the market, the basis for segmentation is

analysed. The marketer can also assume that dual-income households are

growing in urban areas and then develop a programme for this segment.

Selecting the right segmentation variable is critical. For example, small car

producers might segment the market on the basis of income but they

probably would not segment it on the basis of political beliefs or religion

because political leanings or religious beliefs do not normally influence

consumers’ automobile needs. Segmentation variable must also be

measurable to segment the market accurately. For example, segmenting the

market on the basis of intelligence would be difficult because this

characteristic cannot be measured accurately. Marketers can use one or



more variables to segment the market. Different variables are used to

segment consumer markets. Broadly speaking, segmentation variables fall

under two categories: consumer characteristics or consumer responses.

The most popular bases for market segmentation include geographic

factors, demographic factors, psychological characteristics, social/cultural

variables; use related factors, use situation variables, benefits sought and

combination of several segmentation bases called hybrid formats, such as

demographic/psychographic profiles, geo-demographic variables, values

and lifestyles. Table 8.1 lists the variables that can be used to segment the

market.

Table 8.1: Segmentation Variables

Geographic Variables Demographic Variables

Region Nation Urban, Rural State City size Climate Terrain Market Density

Gender Family size Age Occupation Race Family life cycle Religion Income Social class Education

Psychographic Variables Behaviouristic variables

Personality attributes Motives Lifestyles

Usage volume, Occasion End use Benefits sought Brand loyalty Price sensitivity

The subsequent sub-sections discuss various bases for market

segmentation.

8.4.1 Geographic segmentation

Geographic segmentation focuses on dividing markets into different

geographic units, such as regions, nations, states, urban, rural, etc.

Customers located in different geographic areas vary in terms of climates,

terrain, natural resources, population density, culture, service needs, sales

potential, growth rates, competitive structure of the market, frequency of

purchases for a variety of goods and services. For example, Jeeps are more

popular in rural areas in India than in urban areas. Shopping malls are

located only in larger cities in India, and raincoats are sold more in rainy

areas. Geographic segmentation is used both in consumer and



organisational markets, particularly where customers are not willing to travel

far to acquire goods and services.

8.4.2 Geo-demographic segmentation

Many segmentation approaches involve both geographic and demographic

descriptors.

This approach is based on the premise that people who live close to one

another are likely to have similar economic status, tastes, preferences,

lifestyles and consumption behaviour. Geo-demographic segmentation is

particularly useful when a marketer is capable of isolating its prospects with

similar personalities, goals, interests, and in terms of where they live. For

products, and services used by a wide cross-section of society, this

approach may not be suitable. For example, some retailers who propose to

open new stores are interested in knowing something about the people who

live within a defined area whom they aim to attract.

8.4.3 Demographic segmentation

Demographic characteristics are commonly used to segment the market.

Factors such as age, sex, education, income, marital status, household life

cycle, family size, social class, etc., are used singly, or in a combination, to

segment a market. Shaving products for women are based on the

demographic variable of gender. Toy manufacturers such as Funskool and

Mattel Toys segment the market on the basis of age of children. Auto

manufacturers segment the market by considering income as an important

variable. Producers of refrigerators, washing machines, microwave ovens

etc., take income and family size as important variables in segmenting the

market. Ready-to-wear garment producers often segment the market on the

basis of social class. Examples are Chirag Din, Arrow, Van Heusen, Louis

Philippe, Levis and others. In general, the social class can represent lower,

middle and upper class depending on education, income, status, etc. For

example, an engineer and a clerk are considered as members of different

social classes. Figure 8.1 depicts the classification of the Indian population

in a pyramid form



Figure 8.1 Socio-economic Pyramid of Indian Population

8.4.4 Psychographics segmentation

When segmentation is based on personality or lifestyle characteristics, it is

called psychographic segmentation. Consumers have a certain self-image

and this describes their personality. There are people who are ambitious,

confident, aggressive, impulsive, conservative, modern, gregarious, loners,

extrovert, introvert, etc. Some motorcycle manufacturers segment the

market on the basis of personality variables such as macho image,

independent and impulsive. Some producers of liquor, cigarettes, apparel,

etc., segment the market on the basis of personality and self-image.

Marketers, are often not concerned about measuring how many people

have the characteristic as they assume that a substantial number of

consumers in the market either have the characteristic or want to have it.

Lifestyle: It is an indicator of how people live and spend their time and

money. What people do in their spare time is often a good indicator of their

lifestyle. For example, John L. Lastovicka, John P. Murray, Erich A.

Joachimsthaler, Gaurav Bhalla and Jim Sheurich in their study, were

identified two lifestyle segments that were most likely to drink and drive:



good timers and problem kids. Good timers are partygoers, macho and high

on sensation seeking. Problem Kids frequently display troublesome

behaviours. According to Morris B. Holbrook, people who have an affinity for

nostalgia, or the desire for old things, also represent a lifestyle segment and

can be a key market for old movies, antiques and books. Surfing on the

Internet has also created a new type of lifestyle. Another study by Rebecca

Piirto of fashion consumers found six major groups: yesteryears (older

consumers), power purchasers (married households with college degree),

fashion foregoers, social strivers, dutifuls (highly practical) and progressive

patrons (high-income/quality buyers). Consumers in different countries and

cultures may have characteristic lifestyles. For example, Indian women are

home focused, less likely to visit restaurants, more price-sensitive, spend

time preparing meals at home and fond of movies.

AIO inventories are useful additions to demographic data but marketers

have found the original AIO inventories as being too narrow. Now,

psychographics or lifestyle studies generally include the following:

Attitudes include evaluative statements about people, products, ideas,

places, etc.

Values refer to widely held beliefs about what is

right/acceptable/desirable, etc.

Activities and interests cover behaviours with respect to activities other

than occupation to which consumers devote time and effort, such as

hobbies, interests, social service, etc.

Demographics cover gender, age, education, occupation, income, family

size, geographic location, etc.

Media preferences describe which specific media the consumers prefer

to use.

Usage rate focuses on measurements of consumption level within a

particular product category and is generally recorded as heavy, medium,

light, or non-user.



Table 8.2 lists various lifestyle dimensions that are of interest to the

marketers.

Table 8.2: Lifestyle Dimensions

Activities Interests Opinions Demographics

Work

Hobbies

Social events

Vacation

Entertainment

Club membership

Community

Shopping

Sports

Family

Home

Job

Community

Recreation

Fashion

Food

Media

Achievements

Themselves

Social issues

Politics

Business

Economics

Education

Products

Future

Culture

Age

Education

Income

Occupation

Family size

Dwelling

Geography

City size

Stage in life cycle

The sample size is often 500 or more individuals who provide this

information and are placed in groups whose members have similar

response patterns. According to F. W. Gilbert and W. E. Warren, most

studies use the first two or three dimensions mentioned above to group

individuals. The use of other dimensions provides more complete profiling of

each group.

Generally, the AIO measurements are product or activity specific. For

example, W. A. Kamakura and M. Wedel have reported a study related to

fashion clothing which included 40 statements and respondents reported

their degree of agreement or disagreement. Five of the statements are

mentioned here:

I like parties with music and chatting.

I like clothes with a touch of sensuality.

I choose clothes that match my age.

No matter where I go, I dress the way I want to.

I think I spend more time than I should on fashion.

In this study, statements relevant to activities and demographics were also

included. General lifestyle studies can be used to spot new product

opportunities, while product specific lifestyle analysis may help repositioning

decisions regarding existing brands.



The VALS (Values and Lifestyles)

Stanford Research Institute (SRI) developed a popular approach to

psychographics segmentation called VALS (Values and Lifestyles). This

segmented consumers according to their values and lifestyles in USA.

Researchers faced some problems with this method and SRI developed the

VALS2 programme in 1978 and significantly revised it in 1989. VALS2 puts

less emphasis on activities and interests and more on a psychological base

to tap relatively enduring attitudes and values. To measure it, respondents

are given 42 statements with which they are required to state a degree of

agreement or disagreement. Some examples of the statements are:

I am often interested in theories.

I often crave excitement.

I liked most of the subjects I studied in school.

I like working with carpentry and mechanical tools.

I must admit that I like to show off.

I have little desire to see the world.

I like being in charge of a group.

I hate getting grease and oil on my hands.

VALS2 has two dimensions. The first dimension, self-orientation, determines

the type of goals and behaviours that individuals will pursue, and refers to

pattern of attitudes and activities which help individuals reinforce, sustain, or

modify their social self-image. This is a fundamental human need. The

second dimension – resources – reflects the ability of individuals to pursue

their dominant self-orientation that includes the full range of physical,

psychological, demographic and material means such as self-confidence,

interpersonal skills, inventiveness, intelligence, eagerness to buy, money,

position, education, etc. The questions above are designed to classify

respondents based on their self-orientation. Stanford Research Institute

(SRI) has identified three basic self-orientations:

Principle-oriented individuals are guided in their choices by their beliefs

and principles and not by feelings, desires and events.

Status-oriented individuals are heavily influenced by actions, approval

and opinions of others.

Action-oriented individuals desire physical and social activity, variety and

risk taking. Based on the concepts of self-orientation and resources,



Values and Lifestyle typology breaks consumers into eight groups.

VALS2 suggests that a consumer purchases certain products and

services because the individual is a specific type of person. The

purchase is believed to reflect a consumer’s lifestyle, which is a function

of self-orientation and resources. People with most resources are at the

top and the ones with least resources are at the bottom of this typology.

Each of the eight groups exhibits a distinctive behaviour, decision-

making approach and product or media usage attributes. VALS2

represents an interconnected network of segments, which means that

adjoining segments have many similar characteristics and can be

combined to suit particular marketing objectives.

8.4.5 Behaviouristic segmentation

Dividing the market on the basis of such variables as use occasion, benefits

sought, user status, usage rate, loyalty status, buyer readiness stage and

attitude is termed as behaviouristic segmentation.

Buyers can be identified according to the use occasion when they develop a

need and purchase or use a product. For example, Archies greeting cards

are used on many different occasions. User status, such as non-users,

potential users, or first time users can be used to segment the market.

Markets can also be segmented into light, medium, or heavy users of a

product. Brand loyalty of varying degree can be presented among different

groups of consumers and may become the basis to segment the market.

There are consumers, who are very loyal to cigarette brands, beer and even

toothpaste. Markets may also be divided on an imaginary Likert-type scale

by considering level of product awareness such as unaware of the product,

aware, interested, desirous, or contemplating to purchase the product.

Based on attitude, consumers may be enthusiastic, indifferent, or hostile

towards the product, and these differences can be used to segment the

market.

Benefit Segmentation: By purchasing and using products, consumers are

trying to satisfy specific needs and wants. In essence, they look for products

that provide specific benefits to them. Identifying consumer groups looking

for specific benefits from the use of a product or service is known as benefit

segmentation and is widely used by marketers. For example, there are



distinct groups of auto buyers. One group might be more interested in

economy, the other in safety and still other in status.

Segmentation bases, such as demographics are descriptive. These

variables are useful but do not consider why consumers buy a product.

Benefit segmentation has the potential to divide markets according to why

consumers buy a product. Benefits sought by consumers are more likely to

determine purchase behaviour than are descriptive characteristics.

Marketers should also appreciate that many benefits sought by consumers

are subject to change with changing technologies, changing social values

and competitive offers. This requires that marketers must constantly

reassess benefit segments. The present scenario in the computer market is

an example. With the introduction of faster and better products, the benefits

consumers seek, are constantly changing. Benefit segmentation can be

seen in the toothpaste market; fresh breath, decay prevention and whiter

teeth are some examples and the leading brands involved are Colgate

Total, Close-Up and Promise. Table 8.3 presents the benefit segmentation

of the toothpaste market.

Table 8.3: Benefit Segmentation of Toothpaste Market

Principal Benefit Sought

Psychographic Characteristics

Behavioural Characteristics

Demographic Characteristics

Brands Much Favoured

Brightness of teeth (cosmetic)

Outgoing, active fun-loving, high sociability

Smokers Teenagers, youngsters

Close-Up, Promise, Aquafresh

Decay prevention (medicinal)

Health conscious

Heavy users Large families Pepsodent, Colgate Total, Forhans

Taste (good taste, flavour)

Self-indulgent, hedonistic

Mint lovers Children Aquafresh, Colgate

Low price (economy)

Price-conscious, independent

Heavy users, deal prone

Men, traditional Neem, Babool, Vicco Vajradanti



8.4.6 Demographic-psychographics segmentation (Hybrid pproach)

Demographic and psychographic profiles work best when combined

together because combined characteristics reveal very important

information about target markets. Demographic-psychographics information

is particularly useful in creating consumer profiles and audience profiles.

Combined demographic-psychographic profiles reveal important information

for segmenting mass markets, provide meaningful direction as to which type

of promotional appeals are best suited and selecting the right kind of

advertising media that is most likely to reach the target market.

Activity 2:

Study the market segmentation pattern of Indian retail giants like Reliance

Retail, Aditya Birla Retail and Pantaloons Retail.


5. ___________ variables of market segmentation focuses on lifestyle

and values of the customers.

6. ___________ segmentation can be used effectively when the

marketers can identify the prospects in terms of the goals and interests

and their location.

7. What people do in their past time and how they live their life can be

good indicators while segmenting the markets based on behavior.

(True/False)

8. The evaluative statements about a product, place or idea reflects the

attitude of the person. (True/False)

9. Principal-oriented individuals are guided by the rational benefits and

not by feelings and desire. (True/False)

10. Benefit segmentation is a descriptive method of market segmentation.

(True/False)

8.5 Limitations of Market Segmentation

Market segmentation has certain limitations too. Some of them are as

follows:

Targeting multiple segments increases marketing costs.

Segmentation can lead to proliferation of products.



Narrowly segmenting a market can hamper the development of broad-

brand equity.

Self assessment questions

11. Segmenting a market is always a good option. (True/False)

12. Wrong segmentation has adverse effects on store’s brand equity.

(True/False)

8.6 Summary

The concept of market segmentation is based on the fact that all consumers

are not alike. They differ in their needs, wants, desires, income, education,

lifestyles and so on.

Market segmentation is the process of dividing the heterogeneous market

into relatively homogenous sub-groups of consumers with somewhat similar

characteristics.

When a marketer selects one of more segments and develops a distinct

marketing programme to accomplish marketing objectives, it is called target

marketing. There are certain conditions that must exist for segmentation to

be meaningful. Many approaches are used for segmenting the market.

Some of the popular bases for segmentation are geographic, demographic,

psychographic and behavioural. Other specific approaches have been used

and found to be quite effective, such as segmentation based on lifestyles.

Lifestyle approach is based on studying how consumers spend their spare

time, what they consider important in their surroundings, what are their

beliefs on broad issues and their self image. Such data is generally

combined with demographic variables to furnish a clearer picture about

consumers.

The marketer generally has options either to adopt undifferentiated

marketing, differentiated marketing, or concentrated marketing.

Glossary

Market Segmentation: creating groups or sets of people based on common

characteristics and homogeneous needs



Market Fragmentation: emergence of new segments (in a previously

homogeneous market) which have their own distinct needs, requirements,

and preferences

Geo-demographic Segmentation: segmentation on the basis of both,

geography and demography of the population

Psychographic Segmentation: segmentation based on personality or

lifestyle characteristics of the customers

Benefit Segmentation: segmentation based on differences in specific

benefits different groups of consumers look-for in a product

8.7 Terminal Questions

1. What is segmentation? What are its benefits?

2. Why has segmentation gained importance in recent years?

3. Discuss the criteria for effective segmentation.

4. When can demographic and benefit segmentation be used to maximum

efficiency?

5. Write a short note on- psychographic segmentation.

8.8 Answers

Answers to Self Assessment Questions

1. Business Planning

2. Demographic, Lifestyle

3. Common

4. Promotion, distribution

5. Psychological

6. Geo-demographic

7. False

8. True

9. True

10. False

11. False

12. True



Answers to Terminal Questions

1. Refer to 8.2 – Segmentation involves grouping people with similar needs

and characteristics. It plays a dual role- as a marketing tool and as input

in business planning.

2. Refer to 8.2 – In face of growing competition and changing customer

profiles, segmentation helps in promoting the right products to right set

of people.

3. Refer to 8.3 – The criteria for effective segmentation include identity;

accessibility, responsiveness, size, measurability and nature of demand.

4. Refer to 8.4 – Demographic segmentation can be used for any product

and by any company and benefit segmentation can be used when the

product has varied uses or distinctive features.

5. Refer to 8.4 – Psychographic segmentation is based on personality or

lifestyle of the customers.

Mini-case

Divided by Geography

Does Wal-Mart tailor its products to specific geographic markets and

regions, or do they just sell the same stuff all across the country?

They tailor their products to who the consumer is in the region. It is heard

that Wal-Mart in Colorado stock a lot more organic items than they do in

say, in South Carolina. Since there are so many stores all across the

country, it is necessary to do that in order to gain the most profit. You

wouldn’t want to stock 20 snowblowers in Arizona!! But if you did that in

Michigan, it would seem more appropriate.

Sometimes the products (that are the same) at different Wal-Mart stores

within the same region have different prices. In a region, there are two Wal-

Marts in the same county, yet one has generally cheaper prices than the

other because of the different neighborhoods that are located around them.

This is simply another way to target the general demographic in the area the

store is located.

Also, on a side note, Wal-Mart also has stores where it "experiments" to see

if certain products, visual displays, or policies draw customers in. If the

"experiment" is successful, they will expand it to other stores, then

eventually nationwide. An example of this is the new $4 generic prescription



drug plan. You can learn about this plan on their website. But basically, it

began in larger cities in Florida, then spread to the whole state, and now it

has spread to other select states.

Question

Does Wal-Mart practices too much geographic segmentation?

Hint Answer: Wal-Mart does practice geographic segmentation to a

considerable extent as evident from the case.

Source: maciowa.com

MK0012-SLM-Unit-08

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