Chapter 8 - Target Marketing Strategies and CRM

Question 1

Market Fragmentation

Answer 1

Creation of many consumer groups due to a diversity of distinct needs and wants in modern society.

Question 2

Target Marketing Strategy

Answer 2

1. Segmentation
2. Targeting
3. Positioning
   Dividing the market into segments based on customer characteristics, selecting one or more segments, and then do the marketing mix.

Question 3

Segmentation

Answer 3

The process of dividing a larger market into smaller pieces based on one or more meaningful, shared characteristics.

Question 4

Segmentation Variables

Answer 4

Dimensions that divide the total market into fairly homogenous groups, each with different needs and preferences.

Question 5

Generation Y

Answer 5

The group of consumers born between 1977 and 1994.

Question 6

Segmenting by Demographics

Answer 6

• Measurable characteristics such as gender, age, family structure, income and social class, race and ethnicity, and geography.

Question 7

Generation X

Answer 7

The group of consumers born between 1965 and 1976.

Question 8

Baby Booomers

Answer 8

Segment of people born between 1946 and 1964.

Question 9

Geodemography

Answer 9

Segmentation technique that combines geography with demographics.

• Birds of a feather flock together.
• People who live near one another share similar characteristics.

Question 10

Segmenting by Psychographics

Answer 10

Help to understand differences among consumers who may be statistically similar to one another but whose needs and wants vary.

Question 11

VALS (Values and Lifestyles)

Answer 11

Psychographic system that divides the entire U.S. population into eight segments.

Question 12

Behavioral Segmentation

Answer 12

Technique that divides consumers into segments on the basis of how they act toward, eel about, or use a god or service.

Question 13

80/20 Rule

Answer 13

A marketing rule of thumb that 20 percent of purchasers account for 80 percent of a product’s sales.

Question 14

Usage occasions

Answer 14

Indicator used in one type of market segmentation based on when consumers use a product most.

Question 15

Target Market

Answer 15

Group or groups that a firm selects to turn into customers as a result of segmentation and targeting.

1. Are members of the segment similar to each other?
2. Can marketers measure the segment?
3. Is the segment large enough to be profitable?
4. Can marketing communications reach the segment?
5. Can the marketer adequately serve the needs of the segment?

Question 16

Segment Profiles

Answer 16

A description of the “typical” customer in a segment.

Question 17

Undifferentiated targeting strategy

Answer 17

Appealing to a broad spectrum of people.

Question 18

Differentiated Targeting Strategy

Answer 18

Developing one or more products for each of several distinct customer groups and making sure these offerings are kept separate in the marketplace.

Question 19

Concentrated Targeting Strategy

Answer 19

Focusing a firm’s efforts on offering one or more products to a single segment.

Question 20

Custom Marketing Strategy

Answer 20

Approach that tailors specific products and the messages about them to individual customers.

Question 21

Mass Customization

Answer 21

Approach that modifies a basic good or service to meet the needs of an individual.

Question 22

Positioning

Answer 22

Developing a marketing strategy aimed at influencing how a particular market segment perceives a good or service in comparison to the competition.

Question 23

Repositioning

Answer 23

Redoing a product’s position to respond to marketplace changes.

Question 24

Brand Personality

Answer 24

A distinctive image that captures a good or service’s character and benefits.

Question 25

Perceptual Map

Answer 25

A vivid way to construct a picture of where products or brands are “located” in the consumers’ minds.

Question 26

CRM (Customer Relationship Management)

Answer 26

About communicating with customers and customers being able to communicate with a company one-to-one.

Question 27

Share of Customer

Answer 27

The percentage of an individual customer’s purchase of a product that is a single brand.

Question 28

Customer’s Lifetime Value

Answer 28

The potential profit generated by a single customer’s purchase of a firm’s products over the customer’s lifetime.

Question 29

Customer Equity

Answer 29

The financial value of a customer relationship throughout the lifetime of the relationship.

Question 30

Four Steps of One-to-One Marketing (CRM)

Answer 30

1. Identify
2. Differentiate
3. Interact
4. Customize