Chapter 8: Segmenting, Targeting, and Positioning

Question 1

Market

Answer 1

People or organizations with needs or wants and the ability and willingness to buy.

Question 2

Market segment

Answer 2

A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.

Question 3

Market segmentation

Answer 3

The process of dividing a market into meaningful, relatively similar, and identifiable segments or groups.

Question 4

Segmentation bases (variables)

Answer 4

Characteristics of individuals, groups, or organizations. Five common bases: geographic, demographic, psychographic, benefits sought, and usage.

Question 5

Geographic segmentation

Answer 5

Segmenting markets by region of a country or the world, market size, market density, or climate.

Question 6

Demographic segmentation

Answer 6

Segmenting markets by age, gender, income, ethnic background, and family life cycle.

Question 7

Family life cycle (FLC)

Answer 7

A series of stages determined by a combination of age, marital status, and the presence or absence of children.

Question 8

Psychographic segmentation

Answer 8

Market segmentation on the basis of personality, motives, lifestyles, and geodemographic categories.

Question 9

Geodemographic segmentation

Answer 9

Segmenting potential customers into neighbourhood lifestyle categories.

Question 10

Benefit segmentation

Answer 10

The process of grouping customers into market segments according to the benefits they seek from the product.

Question 11

Usage-rate segmentation

Answer 11

Dividing a market by the amount of product bought or consumed.

Question 12

Pareto Principle

Answer 12

A principle holding that 20 percent of all customers generate 80 percent of the demand.

Question 13

Satisficers

Answer 13

Business customers who place their order with the first familiar supplier to satisfy their product and delivery requirements.

Question 14

Optimizers

Answer 14

Business customers who consider numerous suppliers, both familiar and unfamiliar, solicit bids, and study all proposals carefully before selecting one.

Question 15

Target market

Answer 15

A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.

Question 16

Undifferentiated targeting strategy

Answer 16

A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix.

Question 17

Concentrated targeting strategy

Answer 17

A strategy used to select one segment of a market to target marketing efforts.

Question 18

Niche

Answer 18

One segment of a market.

Question 19

Multisegment targeting strategy

Answer 19

A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.

Question 20

Cannibalization

Answer 20

A situation that occurs when sales of a new product cut into sales of a firm’s existing products.

Question 21

One-to-one marketing

Answer 21

An individualized marketing method that uses customer information to build long-term, personalized, and profitable relationships with each customer.

Question 22

Positioning

Answer 22

A process that influences potential customers’ overall perception of a brand, a product line, or an organization in general.

Question 23

Position

Answer 23

The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings.

Question 24

Product differentiation

Answer 24

A positioning strategy that some firms use to distinguish their products from those of competitors.

Question 25

Perceptual mapping

Answer 25

A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds.

Question 26

Repositioning

Answer 26

Changing consumers’ perceptions of a brand in relation to competing brands.