Create the Value: Market Segmentation Analysis and a Value Proposition

Create the Value: Market Segmentation Analysis and a Value Proposition

Your company has decided to explore the possibility of developing a new retail

brand aimed at a specific target market. Please prepare a report that would form the

basis of a planning discussion with your senior marketing managers. The term retail

brand refers to a retail store concept, as opposed to a manufacturer’s product or

service brand – the retail company is the brand – like Target, GAP or Victoria’s

Secret.

Your report should include a detailed analysis of a potential market segment and a

description of the proposed value proposition. Your report should be about 1,000–

1,250 words and include a minimum of three references. Please use the APA format

for your paper and references. Please include the following sections:

1. Brief Description of the proposed retail brand concept

2. Potential Market Segment

Identify the characteristics of your potential target market. The figure from the

Week 2 lecture is helpful – you may also include other variables that you consider

relevant. You also need to estimate the size of your target market and the revenue

potential.

Major Segmentation Variables for Consumer Markets

Geographic region

Pacific Mountain, West North Central,

West South Central, East North Central,

East South Central, South Atlantic,

Middle Atlantic, New England

City or metro size

Under 5,000; 5,000–20,000; 20,000–

50,000; 50,000–100,000; 100,000–

250,000; 250,000–500,000; 500,000–

1,000,000; 1,000,000–4,000,000;

4,000,000 or over

Density

Urban, suburban, rural

Climate

Northern, southern

Demographic age

Under 6, 6–11, 12–19, 20–34, 35–49,

50–64, 64+

Family size

1–2, 3–4, 5+

Family life cycle

Young, single; young, married, no

children; young, married, youngest

child under 6; young; married,

youngest child 6 or over; older,

married, with children; older, married,

no children under 18; older, single;

other

Gender

Male, female

Income

Under $10,000; $10,000–$15,000;

$15,000–$20,000; $20,000–$30,000;

$30,000–$50,000; $50,000–$100,000;

$100,000 and over

Occupation

Professional and technical workers;

managers, officials, and proprietors;

clerical salespeople; craftspeople;

forepersons; operatives; farmers;

retired people; students; homemakers;

unemployed people

Education

Grade school or less; some high school;

high school graduate; some college;

college graduate

Religion

Catholic, Protestant, Jewish, Muslim,

Hindu, other

Race

White, Black, Asian, Hispanic

Generation

Baby boomers, Generation Xers

Nationality

North American, South American,

British, French, German, Italian,

Japanese

Social class

Lower lowers, upper lowers, working

class, middle class, upper middles,

lower uppers, upper uppers

Psychographic lifestyle

Culture-oriented, sports-oriented,

outdoor-oriented

Personality

Compulsive, gregarious, authoritarian,

ambitious

Behavioral occasions

Regular occasion, special occasion

Benefits

Quality, service, economy, speed

User status

Nonuser, ex-user, potential user, firsttime user, regular user

Usage rate

Light user, medium user, heavy user

Loyalty status

None, medium, strong, absolute

Readiness stage

Unaware, aware, informed interested,

desirous, intending to buy

Attitude toward

product

Enthusiastic, positive, indifferent,

negative, hostile

3. The Value Proposition

Describe the bundle of benefits/features that are offered to the target customer.

Features are what the company offers and benefits are what the customer derives

from these features.

Functional Benefits – What basic features are offered?

Emotional Benefits – What features are offered that make the customer feel

good?

Self-Expressive Benefits – What features are offered that help reflect and

communicate the customer’s values to everyone in the social environment?

4. Conclusions

Grading Rubric

Outline

Description

Points

Description

20/20 Brief Description of the Retail Brand Concept

Potential Mkt Segment

Identify the characteristics of your potential target

20/20 market; estimate the size of your target market and the

revenue potential.

Value Proposition

20/ 20

Describe the bundle of benefits and features (Functional

benefits; Emotional benefits; Self-expressive benefits)

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