Chapter 6

Question 1

Market segmentation

Answer 1

Market segmentation is a marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries that have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.

Question 2

STP marketing approach

Answer 2

STP marketing is a three-step approach to building a targeted marketing plan. The “S” stands for segmenting, the “T” for targeting and the “P” for positioning. Basically, STP marketing involves breaking down large broader markets into more manageable submarkets or customer segments.

Question 3

Lead/heavy users definition

Answer 3

committed users

Question 4

Brand-freaks

Answer 4

Consumers who are so committed to the brand that their consumer behavior toward it borders on the pathological.

Question 5

Switchers

Answer 5

Consumers who often buy what is on sale or choose brands that offer discount coupons or other price incentives.

Question 6

Emergent consumers definition

Answer 6

Their brand preferences are still under development

Question 7

Point-of-entry-marketing

Answer 7

Developing advertising campaigns to win with first-time users

Question 8

Demographic segmentation

Answer 8

Selecting target segments by including basic descriptors such as age, gender, race marital status, income, occupation.

Question 9

Application of demographic information

Answer 9

1. Used to describe or profile segments that have been identified with some other variable, for example product usage.
2. Used frequently as the starting point in market segmentation.

Question 10

Geodemographic segmentation definition

Answer 10

identifies neighborhoods (by zip codes) that share common demographic characteristics.

Question 11

Psychographics definition

Answer 11

Form of research that emphasizes the understanding of consumers activities, interests, and opinions (AIOs)

Question 12

Benefit segmentation definition

Answer 12

Target segments are delineated by the various benefit packages that different consumers want from competing products and brands.

Question 13

Business markets definition

Answer 13

Institutional buyers who purchase items to be used in other products and services or to be resold to other businesses or households.

Question 14

PRIZM definition

Answer 14

Potential rating index by zip marketing.

Question 15

How to prioritize segments? Selection criterions

Answer 15

1. What the members of the segment want versus the organizations ability to provide it?
2. Size and growth potential of the segment?
3. Return on Investment
4. What is the competitive field?
5. Niche marketing - does the segment represents an untapped niche
6. Can you effectively deliver to the segment (e.g., the logistics)

Question 16

Competitive field definition

Answer 16

Companies that compete for the segments business

Question 17

Niche marketing definition

Answer 17

Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not ‘exist’ but are ‘created’ by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond. Also called micromarketing.

Question 18

Brand’s best opportunity for success involves the overlapping of 4 important factors - Bahr InterBrand Positioning Opportunity Method

Answer 18

1. Relevance: where is the strong consumer connection? What is the revealed need(s) of consumers?
2. Differentiation: can the brand stand out as significantly different than others?
3. Credibility: will consumers believe it?
4. Stretch: Will the brands meaning have continued relevance in changing times? Will it foster brand extension?

Question 19

Positioning strategy

Answer 19

1. Deliver on promise
2. Make it consistent
3. Make it different simply

Question 20

Value proposition definition

Answer 20

What value the brand will be to the customer - its a statement of the functional, emotional, and/or self-expressive benefits delivered by the brand. These benefits as a set justify the price of the product or service. It should be the guiding principle of all creative IBP activity. McDonalds example

Question 21

Brand platform definition

Answer 21

a core idea that frames an ambition or aspiration for the brand that will be relevant to target audiences over time

Question 22

Strategic planning triangle (E. Thorson and J. Moore)

Answer 22

1. Identification and profile target segments
2. Consolidate and value proposition for the brand
3. Select a mix of persuasion tools

Question 23

Segmenting definition

Answer 23

Break down diverse markets into manageable segments

Question 24

Targeting definition

Answer 24

Choose specific segments as the focal points for IBP efforts

Question 25

Positioning definition

Answer 25

Emphasize a theme(s) that aligns with the target segment(s)

Question 26

STP strategies must evolve

Answer 26

the IBP field is dynamic so brands must constantly assess and update their STP strategies

Question 27

The STP Cycle (constant maintenance is required)

Answer 27

1. Re-assess segmentation strategy

2. Pursue product differentiation

Question 28

Re-assess segmentation strategy (The STP Cycle)

Answer 28

• Are there new and better ways to meet the target market’s needs?
• Should you change the target and reposition the brand accordingly?

Question 29

Pursue product differentiation (The STP Cycle)

Answer 29

• Emphasize / create differences that distinguish the brand from its competitors
• ADV and IBP become critical; they must help convince consumers that the difference is meaningful

Question 30

Usage patterns and commitment levels (segmentation methods)

Answer 30

heavy users
nonusers - the lowest level of opportunity
brand loyal users
switchers/variety seekers - a costly target segment
emergent users

Question 31

Emergent users definition

Answer 31

an important business opportunity (point-of-entry marketing)

Question 32

How are demographics generally used?

Answer 32

• In combination with another criteria (usage patterns)

* As a starting point for segmentation

Question 33

Summary of Segmentation Methods (5 primary criteria)

Answer 33

1. Usage patterns & commitment levels
2. demographics
3. geography
4. AOIs
5. Benefit(s)

Question 34

Effective Positioning

Answer 34

is one of the most important decisions faced by advertisers; must demonstrate value to the target

Question 35

Developing the Positioning Theme (4 common themes)

Answer 35

♠ Benefit - emphasize the primary benefit consumers can expect (functional, emotional, self-expressive).
♠ User - focus on the target; who should reap the brand’s value
♠ Competitive - emphasize your brand’s value(s) via an explicit comparison to the competition
♠ Hybrid - combine themes

Question 36

Self-expressive benefits

Answer 36

They heighten the connection between the brand and the customer by focusing on something linked to his or her personality. Self-expressive benefits focus on the act of using the product, as opposed to the emotional benefits associated with the result of using the product.