Chapter 7

Question 1

What is segmentation?

Answer 1

Dividing a market into distinct groups with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

Question 2

What is targeting?

Answer 2

The process of evaluating each market segment’s attractiveness and selecting one or more segment to enter.

Question 3

What is differentiation?

Answer 3

Actually differentiating the market offering to create superior customer value.

Question 4

What is positioning?

Answer 4

Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Question 5

What are major ways to segment consumer market?

Answer 5

Geographic
Demographic
Psychographic
Behavioural

Question 6

What is geographic segmentation?

Answer 6

Dividing a market into different geographic units, such as global regions, countries, regions, countries, regions within a country, provinces, cities, or even neighborhoods.

Question 7

What is demographic segmentation?

Answer 7

Dividing the market into segments based on variables such as age, gender, family size, life cycle, household income, occupation, education, ethnic or cultural, and generation.

Question 8

What are age and life-cycle segmentation?

Answer 8

Dividing a market into different age and life-cycle groups.

Question 9

What is gender segmentation?

Answer 9

Dividing a market into different segments based on gender.

Question 10

What is a Household Income (HHI) segmentation?

Answer 10

Dividing a market into different income segments.

Question 11

What is a psychographic segmentation?

Answer 11

Dividing a market into different segments based on social class, lifestyle, or personality characteristics.

Question 12

What is behavioral segmentation?

Answer 12

Dividing a market into different segments based on consumer knowledge, attitudes, uses, or responses to a product.

Question 13

What is occasion segmentation?

Answer 13

Dividing the market into different segments according to occasions when buyers get the idea to buy, actually, make their purchase, or use the purchased item.

Question 14

What is benefit segmentation?

Answer 14

Dividing the market into segments according to the different benefits that consumers seek from the product.

Question 15

What is Intermarket (cross-market) segmentation?

Answer 15

Forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries.

Question 16

What segments must be to be useful?

Answer 16

Measurable: the size, purchasing power, and profiles of the segments can be measured.
Accessible: The market segments can be effectively reached and served.
Substantial: The market segments are large and profitable enough.
Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.
Actionable: Effective program can be designed for attracting and serving the segments.

Question 17

What is a target market?

Answer 17

A set of buyers sharing common needs or characteristics that the company decides to serve.

Question 18

What is undifferentiated (mass) marketing?

Answer 18

A market-coverage strategy in which a firm decides to ignore market segments differences and go after the whole market with one offer.

Question 19

What is differentiated (segmented) marketing?

Answer 19

A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

Question 20

What is concentrated (niche) marketing?

Answer 20

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

Question 21

What is micromarketing?

Answer 21

The practice of tailoring products and marketing programs to the needs and wants of specific individual and local customer segments - includes local marketing or individual marketing.

Question 22

What is local marketing?

Answer 22

A small group of people who live in the same city or neighborhood or who shop at the same store.

Question 23

What is individual marketing (mass customization)?

Answer 23

Tailoring product and marketing programs to the needs and preferences of individual customers.

Question 24

What is product position?

Answer 24

The way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.

Question 25

What is a competitive advantage?

Answer 25

An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices.

Question 26

Which criteria should a difference satisfy to be worth establishing?

Answer 26

Important: the difference delivers a highly valued benefit to target buyers.
Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way.
Superior: The difference is superior to other ways customers might obtain the same benefit.
Communicable
Pre-emptive: Competitors cannot easily copy the difference.
Affordable: Buyers can afford to pay for the difference.
Profitable: The company can introduce the difference profitability.

Question 27

What is value proposition?

Answer 27

The full positioning of a brand - the full mix of benefits upon which it is positioned.

Question 28

What are types of winning value propositions?

Answer 28

More for more (Four seasons, Mercedez)
More for the same ( Toyota Lexus)
The same for less (Walmart, Best Buy)
Less for much less (Ramada Limited)
More for Less (Home Depot?)

Question 29

What is a positioning statement?

Answer 29

A statement that summarizes company or brand positioning - it takes this form: To (target segment and need) is (concept) that (point of difference)