BM5 Essay Example

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Work out what the numbers in the table signifies, particularly “Comp” “Pen” and “Index.

The numbers in the table signifies the following:

%Comp:— The fraction of the total population of customers who represent a segment in a particular area. For instance, from the data in table two, 2.71% is a percentage that stands for or represents the population of customers in the upper crust segment in the Atlanta DMA area.

%Pen:- Signifies the percentage ratio of total customers in two different areas but in the same segment. For example, 52.74% is a representation of the ratio of Eat at Zaxby’s area to Atlanta DMA area in the shotguns and pickups segment.

Index:- Signifies the ratio of %Comp in two different area. For the case of data in the table, 96 represents a percentage ratio in the upper crust segment for %comp in Eat at Zaxby’s area to %comp in Atlanta DMA area

Missing numbers

%pen = (count2/count1)* 100

NB: Count 1 and Count 2 represents Atlanta DMA and Eat at Zaxby’s respectively.

Therefore, %pen for white picket fences = (5,797/39,135)*100 = 14.8

Index= (%comp for Eat at Zaxby’s / %comp for Atlanta DMA)*100

Therefore, index for white picket fences = (0.48/0.8)*100=60

What do these segment names denote?

A segment denotes a specific category of a buyer or a customer according to various levels of income, lifestyles, occupation or any other distinct aspects that can be used to distinguish a buyer from another.

What are the major segmentation bases that are generally used by marketers? How are these bases actually used for segmentation?

The major segmentations that are generally used by marketers are as follows:

Upper crust,

Blue Blood estate,

Movers and shakers,

Big fish, small pond,

God’s country,

Upward bound,

Pools and patios,

Gray power,

Shotguns and pickups and

White pickets and fences.

The above segments normally draw a rift or demarcate different customers according to their occupations, their level of incomes, the sizes of their families, their age and various social classes.

Suppose you are a brand manager for Toyota. How would you / could you segment the car market and target customers on the basis of (a) age (b) social class (c) family size (d) income. Then think through the rationale as to why you would do this. How would you action the results?

First, I would identify the interests of the population in line with their behaviors. This would assist to obtain a number of characteristics of a buyer. Secondly, I would use the hypothesis that across the population, there is a group which fond of a specific model of cars under Toyota brand. This makes it easier in narrowing down the shared characteristics. Lastly, identification of demography is crucial in that it assist one to know where a certain group of buyers is located. Therefore, these entire features would lead to a complete segmentation with respect to where potential buyers are found.

How do you determine ‘who buys’? — can you give an example of an answer to the ‘who buys’ question for say, a company that makes windows?

To determine who buys a given brand of product is quite challenging. However, there are various ways through which one can manage to find out who the buyers are. For the case of windows, a survey carried out or revisiting the purchase record in various markets would give a clear picture of who the real buyers are.


Lehman, D. and Winer, R., 2005, Product Management. International Edition (4th). McGraw

Hill, Boston.

Kotler, P. and Keller, K., 2006, Marketing Management 12th Edition. Pearson, New Jersey