Chapter 5

Question 1

Segmentation and Target Marketing

Answer 1

Individuals, institutions, groups with similar needs that can be met by an offering

*The goal is to identify specific customer needs, then design a program to satisfy them

Question 2

Buyer Behavior in Consumer Markets

Answer 2

Irrational and Unpredictable
Progresses through 5 Stages
Strong Brand Loyalty Moves from Need to Purchase
Includes Parallel Decisions (What/Where)

Question 3

5 Stages of Consumer Buying

Answer 3

1. Need Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase Decision
5. Post-purchase Evaluation

Question 4

Consumer Need

Answer 4

Existing level of satisfaction does not equal their desired level

Question 5

Consumer Want

Answer 5

Desire for a specific product that will satisfy the need

Question 6

Consumer Demand

Answer 6

Customer’s ability and willingness to purchase a specific product backs up their want for the product

Question 7

4 Possible Post-Purchase Outcomes

Answer 7

1. Delight
2. Satisfaction
3. Dissatisfaction
4. Cognitive Dissonance

Question 8

Factors Affecting the Consumer Buying Process

Answer 8

1. Decision-Making Complexity
2. Individual Influences
   * 3. Social Influences
3. Situational Influences

Question 9

4 Types of Business Markets

Answer 9

1. Commercial Markets
2. Reseller Markets
3. Government Markets
4. Institutional Markets

Question 10

Unique Characteristics of Business Markets

Answer 10

The Buying Center
Hard and Soft Costs
Reciprocity
Mutual Dependance

Question 11

7 Stages of Business Buying

Answer 11

1. Problem Recognition
2. Develop Product Specifications
3. Vendor Identification and Qualification
4. Solicitation of Proposals or Bids
5. Vendor Selection
6. Order Processing
7. Vendor Performance Review

Question 12

Market Segmentation

Answer 12

Process of dividing up the total market for a product into homogeneous groups

Members are similar to each other and dissimilar to other groups

Question 13

Mass Marketing

Answer 13

*Involves no segmentation!

Undifferentiated approach, results in lower market costs

Inherently risky and vulnerable to competitors

Question 14

Differentiated Marketing

Answer 14

Process of dividing up total market into groups of customers having common needs and developing a strategy to pursue one or more of the groups

Question 15

Multisegmented Marketing Approach

Answer 15

Attracting buyers in more than one segment by offering a variety of products to appeal to different needs

Question 16

Market Concentration

Answer 16

Focusing on a single market segment and attempting to gain maximum share in that segment

Question 17

Niche Marketing

Answer 17

Focused marketing effort on one small, well-defined market segment that has a unique, specific set of needs

Question 18

One-to-One Marketing

Answer 18

Creating entirely unique product offerings for each customer

Question 19

Mass Customization

Answer 19

Providing unique solutions to individual customers on a mass scale

Question 20

Permission Marketing

Answer 20

Customers choose to become a member of the firm’s target market

Customers are already interested in the product offering

Question 21

5 Criteria of Successful Market Segments

Answer 21

1. Identifiable and Measurable
2. Substantial
3. Accessible
4. Responsive
5. Viable and Sustainable

Question 22

Consumer Market Segmentation Types

Answer 22

Behavioral Segmentation
Demographic Segmentation
Psychographic Segmentation
Geographic Segmentation

Question 23

Business Market Segmentation Types

Answer 23

Organization Type
Organizational Characteristics
Benefits Sought / Buying Process
Personal And Psychological Characteristics
Relationship Intensity

Question 24

How to Target Noncustomers

Answer 24

Understand why they do not buy - find ways to remove obstacles

Design, affordability, distribution, convenience, awareness

Question 25

The Buying Center

Answer 25

Group of People Responsible for Making Purchasing Decisions

Question 26

Hard Cost

Answer 26

Price

Purchase, Shipping, Installation Cost

Question 27

Soft Cost

Answer 27

Downtime, Opportunity Cost, Human Resource Cost