IDENTIFYING MARKET SEGMENTS AND TARGET MARKETS

Question 1

What is market segmentation?

Answer 1

Divides a market into well-defined slices. A market segment consists of a group of customers who share a similar set of needs and wants.

Question 2

What is geographic segmentation?

Answer 2

Divides the market into geographical units such as nations, states, regions, counties, cities, or neighborhoods.

Question 3

What variables are considered in demographic segmentation?

Answer 3

• Age
• Family size
• Family life cycle
• Gender
• Income
• Occupation
• Education
• Religion
• Race
• Generation
• Nationality
• Social class

Question 4

How does age affect consumer wants and abilities?

Answer 4

Consumer wants and abilities change with age.

Question 5

What defines a person’s life stage?

Answer 5

Major concerns such as going through a divorce, entering a second marriage, or caring for an older parent.

Question 6

How do men and women differ in market behavior?

Answer 6

Men and women have different attitudes and behaviors based partly on genetic makeup and socialization.

Question 7

Why is income segmentation used?

Answer 7

Long-standing practice in categories such as automobiles, clothing, cosmetics, financial services, and travel.

Question 8

What influences each generation or cohort?

Answer 8

The times in which it grows up, including music, movies, politics, and defining events.

Question 9

What is the age range typically associated with Millennials (Gen Y)?

Answer 9

People born between 1977 and 1994.

Question 10

What is the Silent Generation?

Answer 10

Those born between 1925 and 1945, redefining what old age means.

Question 11

What defines Baby Boomers?

Answer 11

Approximately 76 million U.S. consumers born between 1946 and 1964.

Question 12

What is Gen X known for?

Answer 12

Approximately 50 million consumers born between 1964 and 1978, often overlooked in demographics.

Question 13

What does multicultural marketing recognize?

Answer 13

Different ethnic and cultural segments have sufficiently different needs and want targeted marketing.

Question 14

Why is the Asian American market referred to as the ‘invisible market’?

Answer 14

It has traditionally received a disproportionately small fraction of U.S. companies’ total multicultural marketing expenditure.

Question 15

What are the characteristics of African American consumers in the market?

Answer 15

• Most fashion-conscious
• Motivated by quality and selection
• Influenced by their children when selecting products
• Less likely to buy unfamiliar brands

Question 16

What distinguishes Hispanic Americans in marketing?

Answer 16

Different needs and tastes than their foreign-born counterparts and often prefer to communicate in English.

Question 17

What percentage of the population does the LGBT market represent?

Answer 17

Estimated to make up 5 percent to 10 percent of the population with approximately $700 billion in buying power.

Question 18

What is psychographic segmentation?

Answer 18

The science of using psychology and demographics to better understand consumers.

Question 19

What is behavioral segmentation?

Answer 19

Divides buyers into groups based on their knowledge of, attitude toward, use of, or response to a product.

Question 20

What are the five roles in buying decisions?

Answer 20

• Initiator
• Influencer
• Decider
• Buyer
• User

Question 21

What is meant by ‘occasion’ in market segmentation?

Answer 21

Specific times or events in a person’s life that influence when they need, buy, or use a product.

Question 22

What are the different user statuses in market segmentation?

Answer 22

• Nonusers
• Ex-users
• Potential users
• First-time users
• Regular users

Question 23

How can markets be segmented based on usage rate?

Answer 23

Markets can be segmented into light, medium, and heavy product users.

Question 24

What stages are included in buyer readiness?

Answer 24

• Unaware
• Aware
• Informed
• Interested
• Desiring
• Intending to buy

Question 25

What are the categories of loyalty status?

Answer 25

• Hard-core loyals
• Split loyals
• Shifting loyals
• Switchers

Question 26

What does multiple bases segmentation involve?

Answer 26

Combining different behavioral bases for a more comprehensive view of a market and its segments.

Question 27

What are the major segmentation variables for business markets?

Answer 27

• Demographic
• Operating Variables
• Purchasing Approaches
• Situational Factors
• Personal Characteristics

Question 28

What is the first step in the segmentation process?

Answer 28

Needs-Based Segmentation: Group customers into segments based on similar needs and benefits sought.

Question 29

What criteria determine segment attractiveness?

Answer 29

• Market growth
• Competitive intensity
• Market access

Question 30

What are the effective segmentation criteria?

Answer 30

• Measurable
• Substantial
• Accessible
• Differentiable
• Actionable

Question 31

True or False: A segment is more attractive if it has numerous strong competitors.

Answer 31

False.

Question 32

What makes a segment less appealing in terms of buyers’ bargaining power?

Answer 32

Strong or growing influence of buyers reduces attractiveness.

Question 33

What happens when suppliers have strong bargaining power?

Answer 33

Suppliers can raise prices or limit supply, making a segment unattractive.