Question

N class, we looked at the case of Best Buy, where 20% of their customers generate a significant amount of profits by purchasing high margin items without bothering to use rebates. According to the lecture, what type of segmentation base is this?

Usage Rate Segmentation

Answer 1

D) Usage Rate Segmentation

Step-by-step explanation:

Usage rate segmentation refers to a segmentation method that divides customers based on how much they purchase or spend on a product or service. Customers are divided into:

1. non-users and light product users
2. medium product users
3. heavy product users: following the Pareto principle, 20% of your customers will represent 80% of your total sales revenue. This principle applies to most industries and in this case, it also applies to Best Buy.

Answer 2

Angels

Step-by-step explanation:

n class, we looked at the case of Best Buy, where 20% of their customers generate a significant amount of profits by purchasing high margin items without bothering to use rebates. According to the lecture, the type of segmentation base used is Angels.

Angels and Devils Best Buy is a New Customer Approach which clearly defines who current and potential customers are. A group of customers is identified so that it could be divided into different segments based on their motivations, traits and characteristics.

It is based on traits and characteristics that we are told in the scenario that ''20% of their customers generate a significant amount of profits by purchasing high margin items without bothering to use rebates.''