Customer Experience as Segmentation Basis: The Luxury in Question 1

Case study on Customer Experience as Segmentation Basis: The Luxury in Question

1. What are the conventional bases for segmenting the target audience? What relevance do segmentation platforms like Demographic, Geographic, Psychographic and Behavioral (including VALS & PRIZM models) hold in the wake of increased competition, private label proliferation, rivalry from the unorganized sector, and e-tailing? Gaining traction?

Segmentation is mainly based on aspects of geography, behavior, and psychography. These are all considered the conventional basis for segmenting the target audience. Segmentation platforms are considered vital since there are changing needs that the customers have. They also adopt innovative approaches to get better customer satisfaction. This makes a company better position itself among the different markets (Gambhiraopet & Chowdary,2015). It helps create a significant effect on the company, which leads to an improvement in the market share, further building brand loyalty (Walden, 2017). Segmentation platforms also predict the customers values and the behaviors considered to be the right behaviors, attitudes, and values which are crucial aspects to help in knowing the target audience and using a distinct set of customers which companies target from time to time.

The VALS and PRIZM models are systems used to segment consumer markets based on attitudinal variables and geo-demographic factors. These approaches are based on the principles related to the influence of past beliefs and future consumer behavior (Gambhiraopet & Chowdary,2015). These models are crucial in the era of increased competition since they help organizations gain a competitive advantage over others and maintain better consumer behavior. It also creates rivalry in the unorganized sector since the organized industry understands its customers better and knows what they should expect from the company (Gambhiraopet & Chowdary,2015). These models make segmentation easier, and they help define the targets for the products. They also develop great media strategies and make advertising easier.

2. How do you characterize the nature of competition (between the companies in an industry and also the intense rivalry from private labels/ unorganized sectors) and the efficacy of segmentation bases?

The kind of competition in a company and the effectiveness of segmentation can be characterized in several ways. The first is using differentiation approaches vital in gaining a market share. A differentiation strategy is an approach businesses use to develop (Lafrenire, 2019). It mainly works by giving customers something different and unique from the competitions items in the marketplace. The main objective of the differentiation approach is to increase the competitive advantage.

The other way to characterize the nature of competition is the variedness in using technical competency in adopting a market approach. Technical competency makes business activities easier by providing simple ways of doing things and solving problems (Walden, 2017). These competencies are the knowledge and abilities required to apply some technical information and principles in the role of jobs and their functions. People are taught such competencies in the learning institutions and the know-how to complete tasks.

The other way is by using customer engagement strategies from time to time. Some examples of these strategies entail using various discounts and schemes launched off-season. In-season customers are provided with discounts to attract them to the company and cause competition between companies (Lafrenire, 2019). They mainly compete for the customers since they become loyal to organizations that give them discounts because they save a lot. Several product...…client retention and increasing the product repurchase rate. It would be better in the service sector than in the manufacturing sector. The products have already been made based on what the customers prefer despite knowing that their preferences may change. There are three components of Customer Experience Management (Lafrenire, 2019). The first is a success. It involves asking whether the interaction between the company and the customer is booming, and this can only be gauged by assessing how the customer thinks. The other is effort. It entails the effort to understand the relationship between the customer and the company (Lafrenire, 2019). The other is emotion, and it shows the emotional outcome of the customer experience. It helps know what the customers feel during the interaction, and these emotions are ranged.

6. In the wake of the experience economy, should customer experience be viewed as a compliment or a substitute for the existing segmentation bases?

Within an experience economy, the customer experience substitutes and complements the existing segmentation base. This is vital since it creates a great approach, which helps create an improved and better focus to ensure the customers are satisfied with the customized products, develop a better penetration strategy, and develop a win-win approach (Walden, 2017). Customer experience involves using an approach that makes connecting and communicating with people in marketing easy (Walden, 2017). It is mainly about understanding their expectations, behaviors, and needs and not looking at existing and potential customers as a collective whole. The businesses take time to understand them as individuals with unique perspectives (Walden, 2017). It shows that it helps the customers benefit from the products and the companys sales, which is a win-win…