Chapter 7: Marketing: Creating value for target customers

Question 1

Market Segmentation

Answer 1

Dividing a market into smaller segments with distinct needs, characteristics or behaviour that might require separate marketing strategies or mixes.

Question 2

Market Segmentation types

Answer 2

• Segmenting consumer markets
• Segmenting business markets
• Segmenting international markets

Question 3

Segmenting Business Markets

Answer 3

Consumer and business marketers use many of the same
variables to segment their markets.
Additional variables include:
* Customer operating characteristics
* Purchasing approaches
* Situational factors
* Personal characteristics

Question 4

Demographic Segmentation

Answer 4

Demographic segmentation divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

Question 5

Psychographic Segmentation

Answer 5

Psychographic segmentation divides a market into different segments based on social class, lifestyle, or personality characteristics.
People in the same demographic group can have very different psychographic characteristics.

Question 6

Behavioural Segmentation

Answer 6

Behavioural segmentation divides buyers into groups based on
their knowledge, attitudes, uses or responses to a product.
– Occasions
– Benefits sought (e.g., PC gamer/Photographer…)
– User status (e.g., first time, regular, potential…)
– Usage rate (e.g., light, medium, heavy user)
– Loyalty status (e.g., always, occasional…)

Question 7

Requirements for Effective Segmentation:

Answer 7

1. Measurable: The size, purchasing power, profiles of the segments can be measured.
2. Accessible: The market segments can be effectively reached and served.
3. Substantial: The market segments are large or profitable enough to serve.
4. Differentiable: The segments are conceptually distinguishable and respond
   differently to different marketing mix elements and programs.
5. Actionable: Effective programs can be designed to attract and serve segments.

Question 8

Why Segment

Answer 8

Efficient use of marketing resources

To avoid cannibalisation

To occupy stronger positions in a category

Question 9

Selecting Target Market Segments

Answer 9

Target market consists of a set of buyers who share
common characteristics or needs that the company
decides to serve

• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources

Question 10

Market Targeting Strategies

Answer 10

slide 30-44

Question 11

Differentiation and Positioning

Answer 11

Choosing a Differentiation and Positioning Strategy
* Identifying a set of possible competitive advantages to build a position
* Choosing the right competitive advantages
* Selecting an overall positioning strategy
* Communicating and delivering the chosen position to the market
Competitive advantage is an advantage over competitors gained by offering greater consumers value, either through lower prices or by providing more benefits that justify higher prices

Question 12

Product position

Answer 12

Product position is the way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products.
– Perceptions
– Impressions
– Feelings

Question 13

Difference to promote should be:

Answer 13

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 that customers might obtain the same benefit.
• Communicable: The difference is communicable and visible to buyers.
• Preemptive: Competitors cannot easily copy the difference
• Affordable: Buyers can afford to pay for the difference
• Profitable: The company can introduce the difference profitably.

Question 14

Developing a positioning statement

Answer 14

A brand positioning statement explains what your brand
does, the benefits of it, and who you target, helping to
keep marketing efforts focused and aligned

• A brand positioning statement explains what your brand
  does, who you target, and the benefits of your brand, in a
  short, concise statement.

example slide 59

Question 15

Positioning Statement : Targets & needs / Offer / USP

Answer 15

For …. Who ? Target(s) + need(s)

We (the brand) offer… What ? Offer (products & services)

That give you the benefits… Why / How / USP
+ nespresso example slide 58