Chapter 7

Question 1

What are the 4 major steps in designing a customer value-driven marketing strategy?

Answer 1

Selecting customers to serve:

1) segmentation
2) marketing

Deciding on a value proposition:

3) differentiation
4) positioning

Question 2

What are major variables for segmenting consumer markets?

Answer 2

geographic, demographic, psychographic, behavioral

Question 3

What are the most popular factors for segmenting consumer markets?

Answer 3

demographics

Question 4

What is Intermarket segmentation?

Answer 4

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

Question 5

What are the requirements for market segmentation?

Answer 5

• 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 or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars especially for people whose height is greater than seven feet.
• Differentiable. The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If men and women respond similarly to marketing efforts for soft drinks, they do not constitute separate segments.
• Actionable. Effective programs can be designed for attracting and serving the segments. For example, although one small airline identified seven market segments, its staff was too small to develop separate marketing programs for each segment.

Question 6

What is undifferentiated (mass) marketing?

Answer 6

A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer; modern marketings have many doubts

Question 7

What is differentiated (segmented) marketing?

Answer 7

A market-coverage strategy in which a firm targets several market segments and designs separate offers for each; increases costs

Question 8

What is concentrated (niche) marketing?

Answer 8

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches; many grow i.e. Southwest started in Texas; risky to target small nice; big companies i.e. Coca Cola has niche brands

Question 9

What is a product position?

Answer 9

the way a product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products. Products are made in factories, but brands happen in the minds of consumers.