Market Segmentation and Target Markets

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Merle Norman Cosmetics is a high-end producer of various products for skin care and makeup. It competes with companies like Lancome and Clinique for upscale sales to individuals who can afford the best cosmetics available. Unlike its competition, however, Merle Norman does not engage in E-commerce at all (Merle Norman, 2005, p.


Through a combination of consumer information and sales data, Merle Norman tracks its best-selling products and markets directly to consumers.
The purpose of any customer or market information system is to enable "companies to develop programs that target specific customer needs and business opportunities within segments and fragments of its base" (Lowenstein, 1997, p. 88). This is exactly what Merle Norman does. When a customer makes an on-site purchase, they are asked for their name, address, phone number, and birth month. The provided information is combined with a record of the products they are purchasing. Subsequent visits to the same studio record all additional purchases so that a customer profile can be built. This data is available to the studio owner or franchisee. The information obtained from the consumer assists Merle Norman in its marketing efforts in several ways. First, the general popularity of any particular item is gauged so that promotional efforts can be focused on maximizing profits. Second, regional sales information assists the company in deciding whether to market certain products in various areas of the country.
This marketing takes place in one of three ways. The studio owner can enter into a cooperative agreement with the corporation to share the expense of regional television advertising. ...
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