ARH Test 1

Question 1

Definition of Market Segmentation

Answer 1

Market segmentation is a division of market into identifiable and distinct groups/segments, each having common characteristics and needs and display similar responses to marketing actions.

Question 2

2 approaches to segment markets

Answer 2

1. Breakdown Method: Identify groups which share particular differences with assumption that the market consist customers which are essentially the same.
2. Build-up Method: Find similarities among consumers that are assumed to be different from one another.

Question 3

Characteristics of an ideal market segment

Answer 3

• It is possible to measure.
• It must be large enough to earn profit.
• Reachable via the organization’s promotion and distribution channel(s) in a cost-effective manner.
• Internally homogeneous (potential customers in the same segment prefer the same product qualities).
• Externally heterogeneous,( potential customers from different segments have different quality preferences).
• It provides supporting data for a market positioning or sales approach.

Question 4

Ways to segment consumer markets

Answer 4

• Geographic segmentation
• Demographic segmentation
• Behavioural segmentation
• Psychographic segmentation
• Segmentation by benefits

Question 5

Geographic Segmentation

Answer 5

Refers to dividing a market into different geographical units such as nations, states, regions, cities, or neighbourhoods.

Question 6

Demographic Segmentation

Answer 6

• Demographic segmentation is dividing markets into different groups according to:
  
  • Age
  • Gender
  • Personal/household income
  • affects a consumer’s buying power and style of living
  • Ethnicity
  • Religion
  • No. of family members on household
  • Marital status
  • No. of children

Question 7

Behavioural Segmentation

Answer 7

• Behavioural segmentation includes segmentation on the basis of occasions, user status, usage rate, loyalty status, buyer-readiness stage and attitude.

Question 8

Psychographic segmentation

Answer 8

• Psychographic segmentation pertains to lifestyle and personality traits.

Question 9

Factors for evaluating different Market Segments

Answer 9

1. Segment size and growth
2. Segment structured attractiveness
3. Company objectives and resources

Question 10

Ways to differentiate from your competitors in hospitality industry

Answer 10

• Physical Attributes
• Service
• Personnel
• Location
• Image

Question 11

Market Positioning

Answer 11

• Refer to the position a business to carry out their marketing and business objectives.

Question 12

Brand Positioning

Answer 12

1. Identify the business’s direct competitors
2. Understand how each competitor is positioning their business today (e.g. claiming to be the fastest, cheapest, largest, the #1 provider, etc.)
3. Compare the company’s positioning to its competitors’ to identify viable areas for differentiation
4. Develop a distinctive, differentiating and value-based positioning concept
5. Create a positioning statement with key messages and customer value propositions to be used for communications development across the organization e.g #1 transport provider with the largest fleet in town

Question 13

Product Positioning

Answer 13

Generally, the product positioning process involves:-
* Define the market in which the product or brand will compete (who the relevant buyers are)
* Identify the attributes (also called dimensions) that define the product ‘space’
* Collect customers’ perceptions of each product on the relevant attributes
* Determine each product’s share of mind
* Determine each product’s current location in the product space
* Determine thetargetmarket’spreferredcombinationof attributes (referred to as an ideal vector)
* Examine the fit between the product and the market.

Question 14

Types of Product Positioning

Answer 14

• Functional positions
  
  • Solve problems
  • Provide benefits to customers
  • Get favorable perception by investors (stock profile) and lenders
• Symbolic Positions
  
  • Self-image enhancement
  • Ego identification
  • Belongingness and social meaningfulness
  • Affective fulfillment
• Experiential Positions
  
  • Provide sensory stimulation
  • Provide cognitive stimulation

Question 15

Elements of Marketing Mix

Answer 15

1. Product
   
   • product company manufactures or provides in tangible form and in form of intangibles such as services.
2. Place
   
   • Distribution channels for the product, such as stores, catalogs, websites or any other means
3. Price
   
   • Refers to the amount of money a consumer is willing to pay for the product or seller will charge from customers. The cost should be wide enough to cover the operating costs, but it should also be in the affordability of the customer.
4. Promotion
   
   • How organization is going to promote its product or service.
   • It is how you communicate with your customers. The best product can be failed if not communicated properly, so it is essential to successfully promote the product to reach your customers.

Question 16

Evaluate the Marketing Mix

Answer 16

• Using Marketing mix modeling (MMM) such as multivariate regressions on sales and marketing time series data to estimate the impact of various marketing tactics (marketing mix) on sales and then forecast the impact of future sets of tactics.
• This is often used to optimize advertising mix and promotional tactics with respect to sales revenue or profit.

Question 17

Micro and Macro Environmental Factors

Answer 17

Micro Factors:
* Direct influence on the firm’s marketing operations and to some extent are controllable factors.

Macro Factors:
* Indirect influence and are mostly uncontrollable. These factors make up Political, Economic, Social and Technological forces.

Question 18

Analysing Competitors

Answer 18

1. Share of market
   
   • The competitor’s share of the target market.
2. Share of mind
   
   • The percentage of customers who named the competitor in responding to the statement, “Name the first company that comes to mind in this industry.”
3. Share of heart
   
   • The percentage of customers who named the competitor in responding to the statement, “Name the company from whom you would prefer to buy the product.”

Question 19

Micro Environmental Factors

Answer 19

1. Suppliers
   
   • Suppliers are firms and individuals that provide the resources needed by the company to produce its goods and services
2. Marketing Intermediaries
   
   • Help company promote, sell, and distribute its goods to the final buyers. Include wholesalers, distributors, and retailers that make a link between the firm and the customers.
3. Customers
   
   • Consists of individuals and households who purchase the goods or services
4. Publics
   
   • Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. E.g Financial, Media, Govt

Question 20

Macro Environmental Factors

Answer 20

1. Demographic Environment
2. Economic Environment
3. Natural Environment
4. Political Environment
5. Cultural Environment

Question 21

Marketing Research

Answer 21

Marketing research is a process that:
* Identifies and defines marketing opportunities and problems
* Monitors and evaluates marketing actions and performance
* Communicates the findings and implications to management