Chap 4

Question 1

Market:

Answer 1

Is a group of potential customers with similar needs who are willing to exchange something of value with seller offering various goods or services – that is a way of satisfying those needs.

Question 2

Generic market:

Answer 2

A market with broadly similar needs and sellers offering various, or diverse, ways of satisfying those needs.

Question 3

Product-market:

Answer 3

A market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

Question 4

Product-market definition:

Answer 4

A complete product-market definition includes a four-part description: Product type (type of good and type of service), Customer (user) needs, Customer types, Geographic area

Question 5

Generic-market definition:

Answer 5

Customer (user) needs, Customer types, Geographic area

Question 6

Product type:

Answer 6

Describes the goods and/or services that costumers want. NOTE: A generic-market description does not include any product-terms. This emphasizes that any product type that satisfies the customer’s needs can compete in a generic market.

Question 7

Market segmentation:

Answer 7

Is a two step process: Naming broad product-markets, Segmenting these broad product markets in order to select target markets and develop suitable marketing mixes.

Question 8

Naming a broad product-market:

Answer 8

Is the first step in effective market segmentation and involves naming a broad product-market of interest to the firm. Marketers must break apart all possible needs into some generic markets and broad product-markets in which the firm may be able to operate profitably.

Question 9

Segmenting:

Answer 9

An aggregating process clustering people with similar needs into a “market segment”.

Question 10

Market segment:

Answer 10

A relatively homogenous group of customers who will respond to a marketing mix in a similar way.

Question 11

Criteria for segmenting a broad product-market:

Answer 11

“Good” market segments meet the following criteria: Homogenous within – The customers in the market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting decisions. Heterogeneous between – The customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting decisions. Substantial – The segment should be big enough to be profitable. Operational – The segmenting dimensions should be useful for identifying costumers and deciding on marketing mix variables. This leads marketers to include demographic dimensions such as age, sex, income, location and family size.

Question 12

Single target market approach:

Answer 12

Segmenting the market and picking one of the homogenous segments as the firm’s target market.

Question 13

Multiple target market approach:

Answer 13

Segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix.

Question 14

Combined target market approach:

Answer 14

Combining two or more submarkets into one larger target market as a basis for one strategy.

Question 15

Combiners:

Answer 15

Try to increase the size of their target markets by combining two or more segments. Combiners look at various submarkets for similarities rather than differences. Then they try to extend or modify their basis offering to appeal to these “combined” customers with just one marketing mix.

Question 16

Segmenters:

Answer 16

Aim at one or more homogenous segments and try to develop a different marketing mix for each segment. Segmenters usually fine-tune their marketing mixes for each target market because they want to satisfy each segment very well.

Question 17

Qualifying dimensions:

Answer 17

Are those relevant to including a customer type in a product-market.

Question 18

Determining dimensions:

Answer 18

Are those that actually affect the customer’s purchase of a specific product or brand in a product-market.

Question 19

Clustering techniques:

Answer 19

Try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. Clustering approaches use computers to do what previously was done with much intuition and judgment.

Question 20

Customer relationship management:

Answer 20

The seller fine-tunes the marketing effort with information from a detailed customer database. This usually includes data on a customer’s past purchases as well as other segmenting information.

Question 21

Differentiate the marketing mix:

Answer 21

The reason for focusing on a specific target market is so that you can fine-tune the whole marketing mix to provide some group of potential customers with superior value.

Question 22

Positioning:

Answer 22

Refers to how customers think about proposed and present brands in a market. Without a realistic view of how customers think about offerings in the market it’s hard for marketing manager to differentiate.

Question 23

Positioning statement:

Answer 23

Concisely identifies the firm’s desired target market, product type, primary benefit or point of differentiation, and the main reasons a buyer should believe the firm’s claim.