Chapter 7: customer value

Question 1

market segmentation

Answer 1

dividing the market into different groups of buyers who have different needs, characteristics or behaviors and who might require separate marketing strategies

Question 2

market targeting

Answer 2

evaluating each segment’s attractiveness and selecting one or more segments to serve

Question 3

Differentiation

Answer 3

Actually differentiating the market offering to create superior customer value

Question 4

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 customers

Question 5

market segmentation

Answer 5

dividing markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs

Question 6

demographic segmentation

Answer 6

dividing the market into segments based on variables such as age, life cycle stage, gender, income, occupation, education, religion, ethnicity and generation

Question 7

geographic segmentation

Answer 7

dividing the market into different geographical units such as nations, states, regions, countries, cities or even neighbourhoods

Question 8

psychographic segmentation

Answer 8

dividing the market into different segments based on lifestyle and personality characteristics

Question 9

behavioral segmentation

Answer 9

divide the market in segments based on consumer knowledge, attitudes, uses of a product or responses to the product

Question 10

occasion segmentation

Answer 10

divide the market into segments according to occasions when buyers get the idea to buy, make the purchase or use an item

Question 11

Benefit segmentation

Answer 11

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

Question 12

User status

Answer 12

Markets can be segmented into non users, ex-users, potential users and regular users of a product

Question 13

usage rate

Answer 13

markets segmented into light, medium and heavy product users

Question 14

loyalty status

Answer 14

market segmented by consumer loyalty by looking at customers who are shifting away

Question 15

Using multiple segmentation bases

Answer 15

marketers usually use multiple segmentation bases in an effort to identify smaller, better defined target groups

Question 16

Intermarket (cross market) segmentation

Answer 16

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

Question 17

Requirements for effective segmentation

Answer 17

• measurable: size, purchasing power and profiles can me measured
• accessible: can be effectively reached and served
• substantial: large and profitable enough
• differentiable: distinguishable and respond differently to different marketing mix elements and programs
• actionable: effective programs can be designed for attracting and serving the segments

Question 18

factors to evaluate market segments

Answer 18

• segment size and growth
• structural attractiveness
• company objectives and resources

Question 19

target market

Answer 19

set of buyers who share common needs or characteristics that a company decides to serve

Question 20

undifferentiated marketing

Answer 20

marketing-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with no offer

Question 21

differentiated marketing

Answer 21

strategy in which firms target several market segments and designs separate offers for each

Question 22

concentrated marketing

Answer 22

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

Question 23

micromarketing

Answer 23

tailor products and marketing programs to the needs and wants of specific individuals and local customer segments

Question 24

local marketing

Answer 24

tailor brands and marketing to the needs and wants of local customer segments

Question 25

individual marketing

Answer 25

tailor products and marketing programs to the needs and preferences of individual customers

Question 26

factors for choosing a targeting strategy

Answer 26

companies consider factors such as product variability, resources, product life cycle and market variability

Question 27

market variability

Answer 27

if most buyers have the same tastes and behavior, undifferentiated marketing is appropriate

Question 28

value proposition

Answer 28

How it will create differentiated value for targeted segments and what positions it wants to occupy in those segments

Question 29

Product position

Answer 29

the way a product is defined by consumers on important attributes - the place it occupies in consumers minds relative to competing products

Question 30

positioning maps

Answer 30

diagrams that show consumer perceptions of their brands versus those of competing products on important buying dimensions

Question 31

competitive advantage

Answer 31

an advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices

Question 32

more for more

Answer 32

providing the most upscale product and charging a higher price

Question 33

more for the same

Answer 33

offering more for the same price

Question 34

same for less

Answer 34

premium products at non premium prices

Question 35

less for much less

Answer 35

offer less and cost less

Question 36

more for less

Answer 36

best product selection and lowest prices

Question 37

positioning statement

Answer 37

statement that summarises company or brand positioning using the following form:

to (target segment and need) our (brand) is (concept) that (point of difference)