Chapter 7

Question 1

market fragmentation

Answer 1

the creation of many consumer groups due to a diversity of distinct needs and wants in modern society

Question 2

target marketing strategy

Answer 2

dividing the total market into different segments on the basis of customer characteristics, selecting one or more segments, and developing products to meet the needs of those specific segments

Question 3

segmentation

Answer 3

the process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics

Question 4

segmentation variables

Answer 4

dimensions that divide the total market into fairly homogeneous groups, each with different needs and preferences

Question 5

demographics

Answer 5

statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure

Question 6

generational marketing

Answer 6

marketing to members of a generation, who tend to share the same outlook and priorities

Question 7

cultural diversity

Answer 7

a management practice that actively seeks to include people of different sexes, races, ethnic groups, and religions in an organization’s employees, customers, suppliers, and distribution channel partners

Question 8

geodemography

Answer 8

a segmentation technique that combines geography with demographics

Question 9

geocoding

Answer 9

customizing web advertising so that people who log on in different places will see ad banners for local businesses

Question 10

psychographics

Answer 10

the use of psychological, sociological, and anthropological factors to construct market segments

Question 11

VALS (Values and Lifestyles)

Answer 11

a psychographic system that divides the entire US population into eight segments

Question 12

behavioral segmentation

Answer 12

a technique that divides consumers into segments on the basis of how they act toward, feel about, or use a good or service

Question 13

80/20 rule

Answer 13

a marketing rule of thumb that 20% of purchases account for 80% of a product’s sales

Question 14

long tail

Answer 14

a new approach to segmentation based on the idea that companies can make money by selling small amounts of items that only a few people want, provided they sell enough different items

Question 15

usage occasions

Answer 15

an indicator used in behavioral market segmentation based on what consumers use a product most

Question 16

targeting

Answer 16

a strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn them into customers

Question 17

target market

Answer 17

the market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts

Question 18

segment profile

Answer 18

a description of the typical customer in a segment

Question 19

undifferentiated targeting strategy

Answer 19

appealing to a broad spectrum of people

Question 20

differentiated targeting strategy

Answer 20

developing one or more products for each of several distinct customer groups and making sure these offerings are kept separate in the marketplace

Question 21

concentrated targeting strategy

Answer 21

focusing a firm’s efforts on offering one or more products to a single segment

Question 22

custom marketing strategy

Answer 22

an approach that tailors specific products and the messages about them to individual customers

Question 23

mass customization

Answer 23

an approach that modifies a basic good or service to meet the needs of an individual

Question 24

positioning

Answer 24

develop a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition

Question 25

repositioning

Answer 25

redoing a product’s position to respond to marketplace changes

Question 26

retro brand

Answer 26

a once popular brand that has been revived to experience a popularity comeback, often by riding a wave of nostalgia

Question 27

brand personality

Answer 27

a distinctive image that captures a good’s or service’s character and benefits

Question 28

perceptual map

Answer 28

a technique to visually describe where brands are located in consumers’ minds relative to competing brands

Question 29

customer relationship management (CRM)

Answer 29

a systematic tracking of consumers’ preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individual’s unique wants and needs. CRM allows firms to talk to individual customers and to adjust elements of their marketing programs in light of how each customer reacts

Question 30

touchpoint

Answer 30

any point of direct interface between customers and a company

Question 31

share of customer

Answer 31

the percentage of an individual customer’s purchase of a product that is a single brand

Question 32

lifetime value of a customer

Answer 32

the potential profit a single customer’s purchase of a firm’s products generates over the customer’s lifetime

Question 33

customer equity

Answer 33

the financial value of a customer relationship throughout the lifetime of the relationship