Chapter 4

Question 1

Market:

Answer 1

A group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services (aka satisfying those needs).

Question 2

Generic Market:

Answer 2

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

Question 3

Product-Market:

Answer 3

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

Question 4

Market-Segmentation:

Answer 4

A two-step process of:

(1) Naming broad product-markets
(2) Segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes

Question 5

Segmenting:

Answer 5

Clustering people with similar needs into a “marketing segment.”

Question 6

Marketing Segment:

Answer 6

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

Question 7

Criteria for Good Marketing Segments:

Answer 7

1. Homogenous within
2. Heterogeneous between
3. Substantial - Big enough to be profitable.
4. Operational - The segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables.

Question 8

Single Target Market Approach:

Answer 8

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

Question 9

Multiple Target Market Approach:

Answer 9

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

Question 10

Combined Target Market Approach:

Answer 10

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

Question 11

Combiners:

Answer 11

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

Question 12

Segmenters:

Answer 12

Aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. Segmenters try to satisfy “very well.”

It is usually better to be a segmenter.

Question 13

Qualifying Dimensions:

Answer 13

Those relevant to including a customer type in a product-market.

Question 14

Determining Dimensions:

Answer 14

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

Question 15

Clustering Techniques:

Answer 15

Try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments.

Question 16

Customer Relationship Management (CRM):

Answer 16

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

Question 17

Positioning:

Answer 17

Refers to how customers think about proposed or present brands in a market. Positioning changes may include physical changes in the product or simply image changes based on promotion.