Chapter 6 - Segmentation, Targeting, and Positioning

Question 1

STP Steps

Answer 1

1.Step 1: Establish Overall Strategy or Objectives
Step 2: Segmentation Bases
Step 3: Evaluate Segment Attractiveness
Step 4: Select Target Market
Step 5: Identity and Develop Positioning Strategy

Question 2

Step 1: Establish Overall Strategy or Objectives

Answer 2

Articulate the mission and the objectives of the companies marketing strategy clear

• The segmentation strategy must be consistent with and derived from the firm’s mission and objectives, as well as its current situation - SWOT

Question 3

Step 2: Segmentation Bases

Answer 3

Develops descriptions of the different target market segments - and their needs, wants, and characteristics

• Helps firms better understand the profile of the customers in each segment
  Distinguish customer similarities within a segment and differences

Question 4

Psychographic segmentation

Answer 4

how consumers actually describe themselves or how they live - motives, personality, lifestyles

• Self values - are life goals, overriding desires that drive how a person lives their life, self concept, lifestyles

Question 5

Behavioural

Answer 5

groups consumers on the basis of why they buy, how often, and how they plan to use the products or services

Question 6

Occasion segmentation

Answer 6

groups consumers based on when they purchase or consume a product or service

Question 7

Benefit segmentation

Answer 7

considers the benefits customers are looking for from products or services

Question 8

Loyalty segmentation

Answer 8

strategy of investing in retention and loyalty initiatives to retain the firm’s most profitable customers

Question 9

Usage rate

Answer 9

how often a person uses the product or service - occasional, light, regular, or heavy users

Question 10

Geodemographic segmentation -

Answer 10

the grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristic

Question 11

Step 3: Evaluate Segment Attractiveness

Answer 11

Marketers must first determine whether the target marketing is worth pursuing by using several descriptive criteria: identifiable, reachable, responsive, and substantial and profitable

Question 12

Identifiable

Answer 12

firms must determine who is within their marker and to be able to design products or services to meet their needs - segments must be distinct from each other

Question 13

Reachable

Answer 13

consumers must know that the product or service existits, understand what it can do for them, and recognize how to buy it

Question 14

Responsive

Answer 14

the customers in the segment must react similarly and positively to a firms offering

Question 15

Substantial and profitable

Answer 15

needs to measure their size and growth potential - if a market is too small or its buying power is insignificant, it will not generate sufficient profits or be able to support the marketing mix activities

Question 16

Step 4: Select Target Market

Answer 16

Select target market - the key factor likely to affect this decision is the marketers ability to pursue such an opportunity or target segment

Question 17

Targeting Strategies

Answer 17

• Undifferentiated targeting strategy (mass marketing) -
• Differentiated Targeting Strategy
• Concentrated (Niche) Targeting Strategy
• Micromarketing (one-to-one) segmentation

Question 18

Undifferentiated targeting strategy (mass marketing) -

Answer 18

• if the product or service is perceived to provide the same benefits to everyone, there is no need to develop separate strategies for different groups - salt, sugar, greeting card

Question 19

Differentiated Targeting Strategy -

Answer 19

target several market segments with a different offering for each - diversify risk, can be expensive, increase market share

Question 20

Concentrated (Niche) Targeting Strategy

Answer 20

selects a single, primary target market and focus all its energies on providing a product to fit that markets needs

Question 21

Micromarketing (one-to-one) segmentation

Answer 21

when a firm tailors a product or service to suit an individual customer’s wants or needs

Question 22

Step 5: Identity and Develop Positioning Strategy
- positioning

Answer 22

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

• The thoughts, feelings, and impressions that people have about a company and its products and brands relative to competing products, brands, or companies

Question 23

Value proposition

Answer 23

communicates the customer benefits to be received from a product or service and thereby provides reasons for wanting to purchase it

Question 24

Positioning statement

Answer 24

expresses how a company wants to be perceived by consumers

• Elements: target market, offering name or brand, product/ service category or concept, unique point of difference/ benefits

Question 25

Positioning Methods

Answer 25

• value
  -product attributes
• benefits and symbolism
• competition
• market leadership

Question 26

Value

Answer 26

• the relationship of price to quality is among the most important considerations for consumers when they make a purchase decision

Question 27

Product attributes

Answer 27

position themselves with a strategy to focus on those attributes that are most important to the target market

Question 28

Benefits and Symbolism

Answer 28

emphasis the benefits of the brand as well as the psychological meaning of the brand to consumers

Question 29

Competition

Answer 29

firms can choose to position their products or services head-to-head against a specific competitor or an entire product/ service

Question 30

Market Leadership

Answer 30

companies can emphasize their leadership position within their industry

Question 31

Perceptual map -

Answer 31

displays, in two or more dimensions, the position of products or brands in the consumers mind

Question 32

Ideal point

Answer 32

the position at which a particular market segments ideal product would lie on a perceptual map

Question 33

To derive a perceptual map, marketers follow these steps

Answer 33

1. Determine consumer’s perceptions and evaluations of the firm’s product or service in relation to competitors
2. Identify the market’s ideal points and size
3. Identify competitors positions
4. Determine consumer preferences
5. Select the position
6. Monitor the positioning strategy

Question 34

Brand repositioning (rebranding)

Answer 34

refers to a strategy in which marketers change a brand’s focus to target new markers or realign the brand’s core emphasis with changing market preferences