Chapter 6

Question 1

What 3 fundamental concepts work together to create and reinforce a product’s image to its consumers and to the market in general

Answer 1

Segmentation, targeting, and product positioning

Question 2

market segmentation analysis allows for what

Answer 2

allows marketers to identify which segments could be a focus, where gaps in the market exist, and where future opportunities may lie.

Question 3

The concepts of market segmentation, target markets, and product positioning are based on what three important facts

Answer 3

1. Consumers have a range of different needs, and a single product cannot satisfy everyone
2. Companies have limited amounts of money, which need to be spent efficiently and effectively on consumers who are most likely to purchase the product
3. marketers need to have clear consumer insights on their target markets in terms of product needs, price expectations, purchase habits, and the communication tools most used

Question 4

Define a market segment

Answer 4

This is a piece of the market - it involves aggregating prospective buyers into groups that have common needs and respond similarly to marketing programs. These groups are relatively homogenous and consist of people who are fairly similar in terms of their consumption behavior, attitudes, and profiles

Question 5

What are the 2 main market segments

Answer 5

1. The consumer market
2. The business market

Question 6

Define the consumer market

Answer 6

This consists of goods, services, and ideas that a person can purchase or support for their own personal use

Question 6

Define the business market

Answer 6

This involves products that are purchased either to run a business or to be used as a component in another good or service

Question 7

Normally there is more than one firm vying for the attention of prospective buyers in the market, this results in marketers following what strategy

Answer 7

product differentiation - so that their products appear distinct from competitive offerings

Question 8

Define product differentiation

Answer 8

Positioning a product to a target group so that it appears distinct from competitive offerings.

–> a product does not need to be better than the competition, they are positioned so they can meet the needs of their target consumers

Question 9

What are the 4 approaches that a company can take to segment the market

Answer 9

1. mass marketing strategy
2. segment marketing strategy
3. niche marketing strategy
4. individualized marketing strategy

Question 10

Describe mass marketing

Answer 10

• exists in a limited capacity today
• when a product with broad appeal is widely marketed to the entire market with no product or marketing differentiation at all

ex. utilities, fruits

Question 11

Describe segment marketing

Answer 11

• This is the most common form of segmentation
• involves the marketing of a wide range of different products and brands to specifically meet the needs of an organizations varied target markets

ex. in competitive industries that are dominated by large organizations such as the food business, car industry, etc. (ex. General motors marketing different types of vehicles to appeal to different market segments in the automobile market)

Question 12

Describe niche marketing

Answer 12

This is where a company restricts its efforts to marketing a limited product line to a narrow but profitable single segment of the market that is of marginal interest to major competitors

Question 13

Describe individualized marketing/one-to-one marketing

Answer 13

• involves customizing products to fit individual needs

–> individualized marketing communication is messages and offers being customized for target audiences while individualized market segmentations product and service offerings are also customized to meet individual needs

–> todays internet ordering and flexible manufacturing and database marketing techniques have facilitated individualized market segmentation by making it easier to tailor goods and services to suit individual customer needs

–> ex. individual names on coke cans

Question 14

What is a target market

Answer 14

This is a specific group or segments of existing and potential consumers to which marketers direct their marketing efforts

Question 15

Describe a target market profile

Answer 15

A description of the target market that contains specific information about the target group in four areas: geographics, demographics, psychographics, and behavioristics.

Question 16

In a target market profile the markets are segmented using what four variables

Answer 16

1. Geographics (where does the target market live and work)
2. Demographics (What is the basic census-type information on the target market as a whole)
3. Psychographics (What are the prevailing attitudes, values, interests, habits, and approaches to life that this target market shares)
4. Behavioristics (How does this target market use and interact with the product)

Question 17

Define personas

Answer 17

Character descriptions of a typical customer in the form of fictional character narratives, complete with images that capture the personalities, values, attitudes, beliefs, demographics, and expected interactions with a brand

Question 18

Describe segmentation analytics

Answer 18

• research companies can provide general data on the size and growth of markets, as well as general consumer and lifestyle trends, to assist in segmentation analysis
• you can get data on trends, market size, competitive products,, market share, future prospects
• you can also get segmentation data on a more granular basis to pinpoint information on population clusters that assists marketers ex. postal code data

Question 19

What are the 6 steps for segmenting a market

Answer 19

1. Identify consumer/customer needs and common characteristics in the market
2. Cluster common consumer/customer variables to create meaningful market segments (either using segmentation analytic companies, data from CRM databases, or RFM analysis (recency, frequency, monetary value) (are reviewing the market from a consumer/customer perspective NOT from a product perspective)
3. Estimate the size and feasibility of each segment
4. Identify the segments to be targeted (look at market size, expected growth, competitive position, compatibility, cost of reaching segment)
5. Take actions with marketing programs to reach the segments
6. Monitor and evaluate the success of these programs compared with objectives

Question 20

Define product positioning

Answer 20

The impression of the product you want to establish in consumers’ minds relative to their needs and the competition.

Question 21

What are the 3 basic factors that tend to surface in product positioning

Answer 21

1. Image (Products are often positioned as leaders, contenders, or rebels in the market, also taking on characteristics such as trusted, prestigious, or thrifty. ex. TSN saying champions live here)
2. Product attribute (Products with features that differentiate them from the competition are often positioned on this platform, bringing product claims to the forefront. Ex. Subway positions itself as having healthy and fresh sandwiches)
3. Price (Products with brand parity and little product differentiation may position themselves on price platform. (Ex. Walmart positions as offering lowest retail prices)

Question 22

Define a positioning statement

Answer 22

A formalized statement that identifies the image a branded product represents in the market and what sets it apart from the competition.

includes: the target market, the branded product name, the category in which the product competes, and the brands unique attributes and benefits

Question 23

define repositioning

Answer 23

Changing the place a product occupies in consumers’ minds relative to competitive products to more accurately meet consumer needs

Question 24

Define positioning maps / perceptual maps

Answer 24

Visual representations of how products in a category are positioned in consumers’ minds; also known as perceptual maps

• they can visually represent categories within a market or more specifically product and brand offerings within a category

Question 25

The key to positioning maps is discovering the perceptions in the minds of potential customers by taking what 3 steps

Answer 25

1. Identify the important attributes for a product or brand class
2. Discover how target customers rate competing products or brands with respect to these attributes
3. Discover where the company’s product or brand is on these attributes in the minds of potential customers