Lecture 2

Question 1

What is market segmentation?

Answer 1

It is when we separate the market into smaller groups, allowing companies to focus on a specific consumer base

Question 2

What is the purpose of market segmentation?

Answer 2

The purpose of market segmentation is to enable firms to tailor the marketing mix to meet the needs of those segments

Question 3

What is a niche market?

Answer 3

A niche market is a smaller market close to the main core target market

Question 4

What sets a niche market apart from the core?

Answer 4

They have a set of distinctive traits that set them apart from the core such as different needs, desired benefits, etc

Question 5

Could a niche market become a target market?

Answer 5

Yes it can (ex. electric cars)

Question 6

What are the four terms of segmentation?

Answer 6

Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioural segmentation

Question 7

What is geographic segmentation?

Answer 7

It is when the market is divided into different geographical units

Question 8

What is demographic segmentation?

Answer 8

It is when the market is divided based on factors such as age, gender, and family size

Question 9

What is psychographic segmentation?

Answer 9

It is when the market is divided based on social class, lifestyle or personality characteristics

Question 10

What is behavioural segmentation?

Answer 10

It is when the market is divided based on consumer behaviours

Question 11

Why is age important?

Answer 11

It is important because consumer needs change over time with age, leading to different consumer needs and wants

Question 12

Why is income important?

Answer 12

It is important to consider income when coming up with a marketing strategy as there are consumers who care about the price of a product and those who do not

Question 13

Why is education important?

Answer 13

Different buyers will consume information differently leading to the necessity of identifying how to most effectively convey a message to a certain group

Question 14

Why is social class important?

Answer 14

We need to consider what values a firm is wishing to appeal to

Question 15

Why is lifestyle important?

Answer 15

We need to consider how a product may fit into the life of the consumer

Question 16

What is user status?

Answer 16

Is the consumer a returning user? A new customer?

Question 17

Why are occasions important?

Answer 17

Its important to consider when you would like a consumer to purchase a product

Question 18

Why are benefits sough important?

Answer 18

Its important to take into account the benefits consumers my be searching for, allowing the firm to set them apart from the competition

Question 19

What are the factors that companies must take into account when deciding which market segment they wish to target?

Answer 19

Segment size and growth
Segment structural attractiveness
Company objectives and resources

Question 20

What is differentiated marketing?

Answer 20

Involves marketing in a number of segments, developing separate marketing strategies for each. By zoning in on a market can lead to increased sales

Question 21

What is undifferentiated marketing?

Answer 21

Involves ignoring segment differences and offering just one product/service to the market, aka the firm creates a product that appeals to the largest amount of consumers possible

Question 22

What is concentrated marketing?

Answer 22

It is a marketing-coverage strategy that involves the firm going after a large share of one or a few submarkets

Question 23

What are the factors that are involved in ensuring that the position chosen allows companies to gain competitive advantage?

Answer 23

This includes the brand reputation, awareness and product advantages that are shown in the advertising

Question 24

What are the 3 focuses of positioning strategies?

Answer 24

• They can focus on specific product attributes
• They can focus on the benefits they offer
• They can focus on how the product is positioned directly against a competitor

Question 25

How can positioning oneself directly against a competitor be disadvantageous?

Answer 25

It can lead to unintentional advertising for the enemy and a rejection of the claim that the company is better than its competition

Question 26

How do consumers choose their services and products?

Answer 26

They choose based on how much value said product or service can give them

Question 27

What is product differentiation?

Answer 27

Differentiation of physical products

Question 28

What is services differentiation?

Answer 28

Differentiate the services that accompany the product such as speedy delivery, good customer service, etc.

Question 29

What is personnel differentiation?

Answer 29

Competitive advantage can be achieved by way of hiring and training better people than their competitors do

Question 30

How many differences should a company promote?

Answer 30

One. By choosing one attribute and promoting oneself as “number one” can lead buyers to remember the brand better, allowing for the increased possibility of attaining customer loyalty

Question 31

Why should companies only promote one difference?

Answer 31

Because they should develop a unique selling proposition instead

Question 32

What kind of positioning should companies avoid?

Answer 32

Confused positioning

Question 33

What is the criteria given for how companies should differentiate themselves?

Answer 33

• Important: the difference delivers a highly valued benefit to target buyers.
• Communicable: the difference is communicable and visible to buyers.
• Affordable: buyers can afford to pay for the difference.
• Profitable: the company can introduce the difference profitably.