4 Chris Jones is Managing Director of Supaserve, a medium-sized supermarket chain faced with intense competitionfrom larger competitors in their core food and drink markets. They are also finding it hard to respond to thesecompetitors moving into the sale

4 Chris Jones is Managing Director of Supaserve, a medium-sized supermarket chain faced with intense competition

from larger competitors in their core food and drink markets. They are also finding it hard to respond to these

competitors moving into the sale of clothing and household goods. Supaserve has a reputation for friendly customer

care and is looking at the feasibility of introducing an online shopping service, from which customers can order goods

from the comfort of their home and have them delivered, for a small charge, to their home.

Chris recognises that the move to develop an online shopping service will require significant investment in new

technology and support systems. He hopes a significant proportion of existing and most importantly, new customers,

will be attracted to the new service.

Required:

(a) What bases for segmenting this new market would you recommend and what criteria will help determine

whether this segment is sufficiently attractive to commit to the necessary investment? (10 marks)