Chapter 5 Detail

Question 1

Segmentation

Answer 1

Identify and describe markets

Question 2

Targeting

Answer 2

Selecting attractive segments on which to focus

Question 3

Positioning

Answer 3

Developing strategies for competing in each chosen segment and to assist with establishing a unique selling proposition (USP) in the segment: distinguishes product/brand from competitors and forms the basis for competitive advantage

Question 4

Good segmentation

Answer 4

Identifies worthwhile segments to pursue (needs).
Recognises the dynamic nature of markets (heterogeneous).
Places the right products before the customers most likely to purchase it

Question 5

Requirements for useful segmentation

Answer 5

Segments should be fundamentally different from each other.
Each segment should be large enough to be economically viable.
Should be relatively stable in the short term.
Segments should ultimately be actionable – customers that form part of a segment should be identifiable: organization should be able to find and reach them through communication/distribution channels.
The number of identified segments should be manageable and accessible (the organisation should have the resources needed to address it).

Question 6

Segmentation: Needs-based

Answer 6

Nees and preferences

Question 7

Segmentation: Demographic

Answer 7

Demographic variables (age, gender, income)

Question 8

Segmentation: Geographic

Answer 8

Variables such as province, city, development status (urban/rural), postal codes

Question 9

Segmentation: Product, service or channel

Answer 9

Products/services offered or channels.
Necessary to understand which specific features attract them to a product or channel in order to develop more specific need-based propositions

Question 10

Segmentation: Psychographic

Answer 10

Personality attributes, motives and lifestyles

Question 11

Segmentation: Behaviouristic

Answer 11

Customer’s understanding of, uses for, and responses to products and services

Question 12

Market segmentation would not make sense if

Answer 12

Organization has relatively few, large customers

Market an organisation addresses is relatively homogenous

Question 13

Alternatives to market segmentation: One-to-one marketing

Answer 13

Unique solutions tailored to needs of individual customers. Often used in conjunction with other marketing approaches such as segmentation

Question 14

Alternatives to market segmentation: Mass customisation

Answer 14

Customise products and services on a larger scale. Advances in technology have made this possible

Question 15

Alternatives to market segmentation: Permission marketing

Answer 15

Customers sign up to segment & give marketers permission to market to them.

Question 16

The market segmentation process: 1. Defining the market and scope of segmentation

Answer 16

Buying centre role players:
Gatekeepers: control the flow of info to and from the buying centre.
Influencers: affect the decision by providing info regarding alternatives.
Deciders: make ultimate buying decision, whether it’s their actual role or not.
Buyers: have formal authority to select a supplier and conclude the contract.

Question 17

The market segmentation process: 2. Deciding on an approach to segmentation

Answer 17

A priori: predetermined variables.
Hypothesised segmentation: develop hypothetical segments that are developed, tested and quantified through qualitative and quantitative research.
Bottom-up segmentation: conducted without any prior knowledge or predetermination of variables to be used in the process.
Utilise existing knowledge about segments: Representatives extensive prior knowledge with can identify hypothetical segments

Question 18

The market segmentation process: 3. Identify and profile segments

Answer 18

Applying buying pro forma

Barriers to segmentation

Question 19

Barriers to segmentation: Excessive interest in customers’ identities

Answer 19

Excessive interest in customers’ identities at the expense of focusing on product features.

Question 20

Barriers to segmentation: Too little focus on customer behaviour

Answer 20

Too little focus on customer behavior that reveals attitudes and future behavior

Question 21

Barriers to segmentation: An obsession with the technical detail of segmentation

Answer 21

May lead to missing the mark in terms of serving decision-makers with usable marketing information

Question 22

Barriers to segmentation: Infrastructure

Answer 22

Occur when organizational structure, culture and systems are inappropriate or too inflexible to deal with segmentation

Question 23

Barriers to segmentation: Political

Answer 23

May occur where the different functions in the organization do not co-operate as result of power struggles

Question 24

Barriers to segmentation: Process

Answer 24

Occur when organization does not have the knowledge and skills to conduct a segmentation project

Question 25

Barriers to segmentation: Implementation

Answer 25

Occur when it is difficult or impossible to change the existing structure or status quo to implement a new segmentation structure

Question 26

Barriers to segmentation: Capability

Answer 26

May occur where organizations identify attractive segments, but simply do not have the resources and capabilities to address the segments successfully

Question 27

Positioning concept

Answer 27

Functional concept: solving consumer’s problems; what product does for users.
Symbolic: focus on aspirations; appeals to consumer’s higher-order psychological needs.
Experiential: position products in terms of unique experience.

Question 28

Positioning effectiveness

Answer 28

Pre-testing (Concept testing, test marketing, market research, competitive intelligence)
Post-testing

Question 29

Positioning dimensions

Answer 29

• Product features
• Product benefits
• Heritage (Nando’s)
• Manufacturing process
• Ingredients
• Endorsements by customers, intermediaries or celebrities (Lionel Messi Lay’s chips)
• Competitive comparisons
• Environmental friendliness (Tesla)
• Value for money (Shoprite)