Chapter 6 - Segmentation, Targeting, and Positioning

Question 1

what is the segmentation, targeting-positioning process?

Answer 1

Segmentation

Step 1 - Strategy or objectives
Step 2 - Segmentation bases

Targeting
Step 3 - Evaluate segment attractiveness
Step 4 - Select Target Market

Positioning
Step 5 - Identify and develop positioning strategy

Question 2

What is step 1 of the segmentation, targeting-positioning process?

Answer 2

Step 1 - Establish overall objectives and strategy
- articulate mission goals and objects.
- Must be consistent
- Ex: Gain trial in a competitive market, company must recognize its strengths and weaknesses

Question 3

What is step 2 of the segmentation, targeting-positioning process?

Answer 3

Step 2 - Segmentation Bases
- Formal approach to segment
- Develops a description on each segmentation group
- Helps us understand profile of different consumers
Ex: Beverage marketers: Diet vs regular, caffeine vs non-caffeine

Different Segments:
- Psychological
- Behavioural
- Demographics
- Geographics
- Geodemographic

Question 4

What is step 3 of the segmentation, targeting-positioning process?

Answer 4

Step 3 - Evaluate segmentation attractiveness

• Identifiable (who is the market, are the segments unique, does each segment require a unique marketing mix)
• Reachable (people must know the product exists, they must understand what it can do)
• Responsive (react positively towards the firms offering/product/service)
• Sustainable and profitable (size matters, too small and the segment is insignificant)
• Determination of segment size

i. Segment size (# of people in segment) = 60 million (<15 years)
ii. Segmentation adoption percentage = 35%
iii. Purchase behaviour = $500 x 1 time purchase
iv. Profit margin % = 10%
v. Fixed cost = $50M

Question 5

What is step 4 of the segmentation, targeting-positioning process?

Answer 5

Step 4 - Select Target Market

• Based on completion of SWOT analysis
• Assesses the attractiveness of the opportunity
  Targeting strategies: Mass or undifferentiated, Differentiated, Concentrated, Micromarketing one-to-one

Question 6

What is step 5 of the segmentation, targeting-positioning process?

Answer 6

Step 5 - Identify and develop positioning strategy

Value - the consumer benefits to be received if they buy the product or service
product attributions - focuses on the attribute that is associated with the product or service
Benefits and symbolism - Emphasizes the benefits of the brand as well as the psychological meaning of the brand to consumers

Question 7

what is geographic segmentation?

Answer 7

organizes consumers based on location

Ex: Canada, USA, Freshco ethnic section

Question 8

what is demographic segmentation?

Answer 8

Grouping of consumers according to objective characteristics such as age gender, income, education

Question 9

what is psychological segmentation?

Answer 9

segmentation into how consumers describe themselves, allows people to describe themselves by using those characteristics that help them choose how to occupy their time

Question 10

what is self-values, self concept, and lifestyle

Answer 10

self values: Goals for overall life, a component of psychographics that is the overall desire of how a person lives

Self-concept: The image a person has on themselves.

Ex: a person who has a goal of being loved/belong, mens underwear example in textbook.

Lifestyle: How we live our lives to achieve goals

Ex: A person with a strong sense of belonging may live near a populated area that allows for many activities

Question 11

What is VALS

Answer 11

a psychological tool that classifies consumers into 8 segments. Allows firms to identify target segments

Innovators
Thinkers
Believers
Achievers
Strivers
Experiencers
Makers
Survivors

Question 12

what is behavioural segmentation?

Answer 12

Groups of consumers based on the benefits they derive from products or services, their usage rate, loyalty, and the occasion.

Question 13

what is occasion segmentation?

Answer 13

Groups of consumers based on when they purchase or consume a product or service

Ex: Suit shopping, everyday suit, wedding suit, or vacation/business trip

Question 14

what is Loyalty segmentation?

Answer 14

Strategy of investing in retention and loyalty initiatives to retain the firms profit and consumers.

EX: Spotify consumers loyal to Spotify or a certain genre of music

Question 15

what is geodemographic segmentation?

Answer 15

The grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics.

useful for retailers

Question 16

what is mass or undifferentiated marketing strategy?

Answer 16

A marketing strategy a firm uses if the product or service is perceived to provide the same benefits to everyone, no separation.

EX: Salt, Sugar, Greeting cards, etc

Question 17

what is Differentiated marketing strategy?

Answer 17

A strategy through which a firm targets several market segments with a different offering for each

EX: Dior making clothes and cologne, Victoria secret with pinks and other apparel

Question 18

What is concentrated marketing strategy?

Answer 18

Selecting a single, primary target market and focusing all efforts and energy on providing a product to fit the markets need

Ex: Cora’s only serving breakfast and lunch, special ethnic haircuts

Question 19

What is the micro-marketing strategy?

Answer 19

A form of segmentation that tails a product or service to suit individual customer wants and needs

Ex: Dells computers, colour of laptop, or Iphone colour, or custom building PCs

Question 20

What is mass customization?

Answer 20

The practice of interacting on a on-to-one basis with many people to create custom made products or services.

Ex: Custom sports team jerseys, build-a-bear, Reebok’s build your own sneaker/shoe

Question 21

what is positioning?

Answer 21

the mental picture that people have about a company and its products or services relative to the company

Question 22

what is brand reposition?

Answer 22

A strategy in which marketers change a brands focus to target new markets or realign the brands core emphasis with changing market preferences.

ex: sketchers went from a lifestyle brand for a younger audience, to all age people

Question 23

What is a positioning using a perceptual map?

Answer 23

Displays, in two or more dimensions, the position of products or brands in consumers minds.