Market Segmentation and its Variables

Question 1

The division of a market into several smaller groups, each with similar needs.

Answer 1

Market Segmentation

Question 2

A group of customers or potential customers who have purchasing power and unsatisfied needs.

Answer 2

Market

Question 3

The parameters used to distinguish one form of market behavior from another.

Answer 3

Segmentation Variables

Question 4

• Benefit variables
• Demographic variables

Answer 4

Two Broad sets of Segmentation Variables

Question 5

Specific charcteristics that distinguish the market segments according to the benefits sought by customers.

• Highlights the unsatisfied needs of customers.

Answer 5

Benefit Variables

Question 6

Specific characteristics that describe customers, their purchasing power, their consumption patterns, and other factors.

• Age
• Marital status
• Gender
• Occupation
• Income

Answer 6

Demographic Variables

Question 7

Few companies engage in all three approaches simultaneously. Small businesses often lack the resources that these strtegies tend to require.

• Unsegmented strategy
• Multisegment strategy
• Single-Segment strategy

Answer 7

Marketing Strategies Based on Segmentation Considerations

Question 8

A strategy that defines the total market as the target market.

• Assumes that all customers desire the same basic benefit from the product or service.
• Firms develop a single marketing mix- one combination of product, price, promotion, and distribution.
• Competitive advantage must be derived from either a cost- or differentiation-based advantage

Answer 8

Unsegmented Strategy (Mass Marketing)

Question 9

A strategy that recognizes different preferences of individual market segments and develops a unique marketing mix for each.

Answer 9

Multisegment Strategy

Question 10

A strategy that recognizes the existence of several distinct market segments but focuses on only the most profitable segment.

• Competitive advantage is achieved through a cost- or differentiation-based strategy
• Startup professional
• Founders
• Probably the wisest strategy for small businesses to use during initial marketing efforts.
• Allows a small firm to specialize and make better use of limited resources.

Answer 10

The Single-Segment Strategy

Question 11

A team of experts who help entrepreneurs start and grow their ventures, provides products and services that have value for students, retirees, hobbyists, and more.

Answer 11

Startup Professionals

Question 12

Choose to focus their energies on high-growth-potential ventures.

Answer 12

Founders