Q1 One of the complexities in understanding consumer motivation is the fact that

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Q1 One of the complexities in understanding consumer motivation is the fact that different people buy for different reasons. For example some consumers may be most concerned with decay and cavity prevention when buying toothpaste. Others may be more concerned with buying toothpaste based on its ability to whiten their teeth. It is because of these motivational differences that what type of segmentation is useful? Q2. A test market examining the effects of offering a coupon for a new product showed a trial purchase rate of 40% and a repeat purchase rate of 30%. What is the TMP? Q3. Continuing the coupon's effects in the test market (Q2, did the coupon increase TMP? Q4 A company is trying to decide whether to offer consumers a $10-off coupon or a rebate for $10. What is the advantage of offering the rebate? Information processing lecture Q5. Assume the following probabilities for a given ad at each stage of information processing: Ad A Ad B ProbabilityStage Probability .8 Exposure Attention Comprehension.9 Acceptance Exposure .9 Attention Comprehension9 .3 Acceptance

Explanation / Answer

The importance of market segmentation is always lies in understanding the specific needs and wants of the consumers precisely with a specific product. Thus, to simplify the complexities of the various products existence in the market, the segmentation through the movement of the product, helps the company to concentrate on fast moving product segment.

The consumer have different preferences which defines the movement of particular product, so to fulfil the demands of consumer the company creates many segments in the same product range.

The fast moving segment is being paid extra importance, as it covers most of market share and company’s profitability depends on the moving segment of product.

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