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customersegmentation.PPT A five segment solution was chosen from the Factor/Cluster analysis. Female apparel shoppers Bargains Utility Fashion Primary motivation: Bargains Efficiency/service Fun (love to shop) Secondary motivation: High quality bargains Service Fashion Bargains Not motivated by: Fashion “Fashion Forward Shopping Lover” Segment name: “Fashion Value” “Fashion on a Shoestring” “Unfashionable Bargain Lover” “Rich but Unfashionable” $950 $750 $1,400 Average spending per year: $850 $1,350 Smith’s Fashion Center - Segments customersegmentation.PPT Smith determined that its target segments were “Fashion Value” and “Fashion on a Shoestring”. *In this case, spending was a good proxy for profit Ability to serve in a differentiated way Smiths Fashion Center - Current Customers customersegmentation.PPT Chosen Expansion City Smith chose an expansion city with a high mix of its target segments. Smiths Fashion Center - Expansion City Customers customersegmentation.PPT Importance of Accessories Merchandise Quality Based on the needs of the target segments, the merchandise strategy was adjusted to include accessories and more low quality brands. Smiths Fashion Center - Merchandising Strategy customersegmentation.PPT The customer segmentation concept Applications Customer segmentation steps segment customers choose target segments create value propositions for target segments determine profit potential of serving target segments with value propositions Examples needs-based behavioral Key takeaways Agenda customersegmentation.PPT *Disguised client case Situation: Complication: Question: Hypothesis: The client, Highland Hotels, has high margins and is one of the five largest hotel/conference center chains in Europe The market is coming to the end of a period of rapid growth and Highland’s relative cost position is worse than its competitors’ How can Highland preserve its high margins in a slowing market where it finds itself at a cost disadvantage? By off