Business Level Strategy

BUSINESS-LEVEL STRATEGY HOMEWORK

1. Basis for Customer Segmentation: Consumer Market

Consumer markets are markets dominated by products and services designed for the general consumer. These pertain to buyers who purchase goods and services for consumption rather than resale. However, not all consumers are alike in their tastes, preferences and buying habits due to different characteristics that can distinguish certain consumers from others. The following are the basis/characteristics of the consumer market.

1. Demographic Factors (age, income, sex, occupation, education, religion, etc.)

Companies often identify these demographic characteristics through market research surveys used to discover which demographic groups comprise the majority of their customer base. 

1. Socioeconomic Factors (social class, stage  in the family life cycle)

Socioeconomic factors are the social and economic experiences and realities that help mold one's personality, attitudes, and lifestyle. Companies may use this factor in choosing the target consumers that it wanted to garner.

1. Geographic Factors (cultural, regional, and national differences)

Going through an in-depth of geographical factors, a small company may find opportunities in a small market in which larger competitors have no interest. Companies that sell jackets will likely sell more products in cold climates.

1. Psychological Factors (lifestyle, personality traits)

A company may better understand consumer opinions and attitudes after conducting a focus group, and can use that information to tailor advertising or marketing campaigns. Consumer values can pertain to how a group of individuals feels about certain social issues, which can be of interest to nonprofit or charitable organizations.

1. Consumption Patterns (heavy, moderate, and light users)

The ability to anticipate the trends in consumer consumption patterns is vital to any company desiring to be a leader or major factor in their industry. Knowing the trend when consumers actually consume such products also help companies when to produce those products.

1. Perceptual Factors (benefit segmentation, perceptual mapping)

These factors help marketers that attempt to visually display the perceptions of customers or potential customers. Typically the position of a company's product, product line, or brand is displayed relative to their competition. This would help the company on which product or product line it would focus to market on more.

1. Requirements of Cost leadership

Cost Leadership Strategy is an integrated set of actions taken to produce goods or services that are acceptable to consumers at the lowest cost, relative to that of competitors. Firms using cost leadership commonly sell standardized goods or services to the industry’s most typical customers. In an effort to reduce costs, companies may and can do the following:

a.        Building efficient scale facilities

b.        Tight control of production costs and overhead

c.        Minimizing cost of sales, research and development and services