Usage-Rate Segmentation PDF

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Summary

Chapter 8 Lecture Notes, which describes the different types of segments. The document also contains examples of each segment. It will be useful for preparing for the test and quiz....

Description

Usage-Rate Segmentation Usage-rate segmentation divides a market by the amount of product bought or consumed. Categories vary depending on the product, but they are likely to include some combination of the following: former users, potential users, first-time users, light or irregular users, medium users, and heavy users. Segmenting by usage rate enables marketers to focus their efforts on heavy users or to develop multiple marketing mixes aimed at different segments. Because heavy users often account for a sizable portion of all product sales, some marketers focus on the heavy-user segment. Developing customers into heavy users is the goal behind many frequency and loyalty programs. The Pareto Principle (80/20 rule) holds that approximately 20 percent of all customers generate around 80 percent of the demand. Although the percentages usually are not exact, the general idea often holds true....