Ch. 4 - Segmentation

Question 1

what is market segmentation?

Answer 1

The process of dividing up the total market into distinct subsets of consumers with common needs or characteristics

Question 2

what is targeting?

Answer 2

Selecting one or more segments that are appropriate

Question 3

what is positioning?

Answer 3

Establishing a specific image for a brand in relation to competing brands

Question 4

what are the benefits of segmentation? (4)

Answer 4

1) Meet consumer needs better

2) Allows companies to avoid direct competition

3) Allows small companies to compete

4) Often more profitable than Mass-Mktg.

Question 5

what is a disadvantage of segmenting?

Answer 5

causing consumer confusion.

Question 6

what are the requirements for effective segmentation? (4)

Answer 6

1) Measurable

2) Accessible

3) Substantial

4) Unique response to mkt. mix

Question 7

what are the segmentation bases?

Answer 7

1) benefit sought

2) behavioral

3) demographic

4) geographic

5) psychographic/personal elements
5.1) (used to define segments)

Question 8

what are behavior segmentation bases?

Answer 8

1) usage rate (heavy v. light)

2) loyalty status

3) usage occasion

(used to define segments)

Question 9

what are some considerations for Targeting based on segment attractiveness?

Answer 9

1) Market growth: demand, potential

2) Competitive intensity: structure, entry, rivalry

3) Market access: market knowledge, channel access, fit with company strengths (SWOT…)

Question 10

how is segment profitability calculated?

Answer 10

Segment profitability =
(segment demand) x (share) x (customer contribution margin) - marketing expenses

Question 11

what are the different targeting strategies?

Answer 11

1) undifferentiated marketing

2) differentiated marketing

3) concentrated marketing

Question 12

what are benefits to socially responsible targeting?

Answer 12

1) Smart targeting helps companies and consumers alike.

2) Target marketing sometimes generates controversy and concern.

Question 13

what are some controversies of target marketing?

Answer 13

1) Disadvantaged and vulnerable can be targeted (low income, low education, children).

2) Cigarette, beer, and fast-food marketers have received criticism in the past.

3) Internet has come under attack because of the loose boundaries and lack of control in marketing practices.

Question 14

What is position?

Answer 14

Position is what the brand or product stands for in the mind of the consumer; sets the brand or product apart from its competitors in consumer’s mind

Question 15

what is a position statement?

Answer 15

A position statement (or value proposition) is a 3-part proposition that expresses a brand’s position:

General structure: To [Target Market] Brand X is the only one in the [Competitive Set] that [Point of Difference].

Question 16

what are positioning bases?

Answer 16

1) Unique Product Attribute(s)

2) Key Benefit(s) Delivered

3) For Specific Users

4) For Specific Use or Occasion

5) Comparison to Product Category

6) Relative to Specific Competitor

7) Association with Other Element (essentially classical conditioning - Pavlov)

Question 16

what is classical conditioning?

Answer 16

Classical conditioning refers to learning that occurs when a neutral stimulus (e.g., a tone) becomes associated with a stimulus (e.g., food) that naturally produces a behaviour. After the association is learned, the previously neutral stimulus is sufficient to produce the behaviour.

In the context of marketing, classical conditioning involves creating associations between a neutral stimulus and a desired response. For example, a brand may associate its product with positive emotions, aspirational lifestyles, or pleasurable experiences.

Question 17

What are the requirements for effective communication?

Answer 17

1) Small Words

2) Short Sentences

3) Credibility

4) Consistency

5) Novelty

6) Sound and Texture

7) Aspirational

8) Visual

9) Provide Context

(not all used in same context, generally only some show up in the content)

Question 17

who developed the list for effective communication?

Answer 17

Frank Lantz