Question

A large bank is promoting its credit card to existing bank customers who have had more than one account with the bank over the past 5 years. Direct mail and web based promotions will be used to entice customers to participate by communicating the perks of this program: no annual fee, a low introductory interest rate, and $500 cash back offer to open the credit card account. The bank used the principles of _____________, fill in the blank, segmentation to identify this audience.

Answer 1

Answer:

behavioral segmentation

Explanation:

Behavioral segmentation can be divided into four main categories:

1. Brand loyalty based segmentation.
2. Benefit sought based segmentation.
3. Readiness to buy based segmentation.
4. Usage based segmentation: segmentation based on the customers' repeated purchase of goods or services. Usually customers are divided into categories based on their usage of the product or service: heavy, moderate, or less. In this case, the bank is promoting its new credit card based on the customers' usage of their services. They are targeting heavy usage customers that have more than one account and for a minimum of 5 years.  

Answer 2

Answer:

Behavioral.

Explanation:

A market segment is a portion of a large market in which the individuals, groups or organizations share one or more characteristics that cause them to have relatively similar products needs.

A market segment consist of a group of customers that share a similar set of needs and wants.

Are four categories of segmentation:

-Geographic

-Demographic

-Psychographic

-Behavioral. Segmentation on the basis of use occasion, user status. The evaluation of behavior in terms of the customer/prospect’s behavior relative to your company, product, or service