Identifying Market Segments and Targets

Question 1

What is the book definition of a market segment?

Answer 1

A market segment consists of a group of customers who share a similar set of needs and wants.

Question 2

What is the book definition of behavioral segmentation?

Answer 2

In behavioral segmentation, marketers divide buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product.

Question 3

Which are the two components of what the book calls a “flexible market offering”?

Answer 3

A flexible market offering consists of two parts:

1. a naked solution containing the product
   and service elements that all segment members value
2. discretionary options that some segment members value.

Each option might carry an additional charge.

Question 4

To be useful, market segments must rate favorably on which five key criteria?

Answer 4

Measurable
Substantial
Accessible
Differentiable
Actionable

Question 5

Which are Roger Bests seven steps in market segmenting?

Answer 5

1. Needs-Based Segmentation
2. Segment Identification (demographics, lifestyle, behavior…)
3. Segment Attractiveness (according to predetermined criteria)
4. Segment Profitability
5. Segment Positioning (create a value proposition for each segment)
6. Segment Acid Test (test attractiveness of positioning strategies)
7. Marketing-Mix Strategy (include all four P:s)

Question 6

What is a supersegment?

Answer 6

A supersegment is a set of segments sharing some exploitable similarity

Question 7

What is product specialization and market specialization?

Answer 7

With product specialization, the firm sells a certain product to several different market segments

With market specialization, the firm concentrates on serving many needs of a particular customer group

Question 8

Which are the four levels of segmenting?

Answer 8

• Full market coverage
• Multiple segment specialization
• Single-segment concentration
• Individual marketing (“segments of one”)