Chapter 6

Question 1

4 major steps in creating value for target consumer

Answer 1

Segmentation, Differentiation, Positioning and Targeting

Question 2

What are the Segmentation Variables?

Answer 2

Behavioural, Psychographic, Demographic and Geographic

Question 3

Geographic Segmentation

Answer 3

market divided based on geographic location, cities, neighbourhoods, regions, etc.

Question 4

Demographic Segmentation

Answer 4

Based on age/life cycle, gender and income. most popular bases for segmentation.

Question 5

Psychographic Segmentation

Answer 5

Based on lifestyle or personality characteristics
1) Extraversion
2) Agreeableness
3) Openness
4) Conscientiousness
5) Neuroticism

Question 6

Behavioural Segmentation

Answer 6

Based on knowledge, attitudes, uses or responses
- Occasions
- Benefits Sought
- Usage Rate
- Usage Status (segment by types of users (potential, ex, regulars, etc)
- Loyalty Status

Question 7

Occasions

Answer 7

according to occasions when they get the idea to buy and actually make purchase decision

Question 8

What do Business Info Services (e.g. Nielson) provide?

Answer 8

multi-variable segmentation systems which merge the 4 original ones. gives firms ability to segment by postal code or even household.

Question 9

Segmenting Business Markets

Answer 9

1) Customer Operating Characteristics
2) Purchasing Approaches
3) Situational Factors
4) Personal Characteristics
Also include geographically, demographically (industry) or behavioural (minus occasions).

Question 10

Starbucks Segments

Answer 10

1) Colleges & Universities
2) Gov & Military
3) Offices

Question 11

Segmenting International Markets

Answer 11

1) Geographical Locations - Western Europe, Pacific Rim, etc. Not always most precise because it is assumed that nations near each other are similar when they may not be. e.g. not every country in latin America speaks spanish.
2) Economic Factors - pop income, level of economic development. e.g. BRICS heavily targeted due to rapid development.
3) Political & Legal Factors
4) Cultural Factors

Question 12

Intermarket (Cross-Market) Segmentation

Answer 12

segments who have similar behaviours despite being in different countries (e.g. H&M targets frugal people in 43 countries).

Question 13

Requirements for Effective Segmentation

Answer 13

1) Measurable
2) Accessible
3) Substantial
4) Differentiable
5) Actionable
e.g. dividing salt buyers into blondes and brunettes

Question 14

Types of Target Marketing Segments

Answer 14

Undifferentiated (mass)
Differentiated (segmented)
Concentrated (niche)
Micromarketing (local or individual)

Question 15

Concentrated Marketing

Answer 15

going after large share of one or few smaller segments instead of small share of large market

Question 16

Micromarketing

Answer 16

tailoring products and marketing programs to specific individuals

Question 17

Local Marketing

Answer 17

form of micromarketing, tailored to local wants and need (e.g. Marriott Renaissance Hotels)

Question 18

Individual Marketing

Answer 18

form of micromarketing, tailored to individual preferences, custom products. e.g. Nike ID

Question 19

Choosing a Targeting Strategy

Answer 19

Concentrated: if firm has limited resources
Undifferentiated: suited for uniform products
Differentiated or concentration: products that vary in design

Question 20

Socially Responsible Target Marketing

Answer 20

biggest issues: targeting of vulnerable or disadvantaged customers (e.g. Happy Meal targeting children) and firms building detailed customer profiles with personal data.

Question 21

Product Position

Answer 21

complex set of perceptions, impressions and feelings (e.g. Sonos: “all the music on Earth, in every room of your house, wirelessly). Simplifies buying process.

Question 22

Positioning Maps

Answer 22

Shows consumer perceptions of brands against their competitors in terms of price and other variables.

Question 23

Choosing a Differentiation and Positioning Strategy

Answer 23

1) Identifying Value Differences & Competitive Advantages
2) Choosing the Right Competitive Advantages
3) Selecting an Overall Positioning Strategy

Question 24

Value Differentiation

Answer 24

What makes the product different and of value to customer. May be found through product, service, channel, people, image, etc…

Question 25

How is Competitive Advantage Gained?

Answer 25

having lower prices or benefits that justify higher prices

Question 26

Choosing Right Competitive Advantage

Answer 26

1) Important
2) Distinctive
3) Superior
4) Preemptive (hard to copy)
5) Affordable
6) Profitable

Question 27

Selecting Overall Positioning Strategy

Answer 27

selecting winning proposition (diagram in notebook)

Question 28

5 Winning Value Propositions

Answer 28

1) More for More (luxury)
2) More for the same (high quality for lower price)
3) More for less (specials, sales)
4) Same for less (Walmart, Super C)
5) Less for much less (lower quality for lower cost, Dollarama)

Question 29

Positioning Statement

Answer 29

summarizes company or brand positioning
- Format: “To [target segment & need], our [brand] is [concept] that [point of difference].”