Segmentation

Question 1

What is Segmentation?

Answer 1

The process of partitioning the heterogeneous market into segments, allowing development of unique marketing programs that will be most effective for these specific segments.

Question 2

What is Market Aggregation?

Answer 2

Offers a single product with a single marketing program (e.g. mass marketing, undifferentiated marketing, product differentiation).

Question 3

What are the 4 criteria for effective segmentation?

Answer 3

1. Measurability
2. Substantiality
3. Accessibility
4. Responsiveness

Question 4

What is Geographic Segmentation?

Answer 4

Divides the market into different geographical units (e.g. nations, states, regions, countries, cities or neighbourhoods).

Question 5

What are the Pros/Cons of Geographical Segmentation?

Answer 5

Pros - Can identify cultural differences, climatic differences, language differences.
Cons - Can dismiss personality, age, consumer lifestyles and globalisation

Question 6

What is Demographic Segmentation?

Answer 6

Divides the market into groups based on variables such as age, gender, family size, family lifecycle, income, occupation, religion, race, nationality and social class.

Question 7

What are the Pros/Cons of Demographic Segmentation?

Answer 7

Pros - Much data available, Measures consumers’ preferences for brands, products and media.
Cons - Does not capture consumer motivations

Question 8

What are the 4 variables of Family Lifecycle?

Answer 8

1. Age
2. Marital Status
3. The Presence/Absence of children in the home
4. Ages of these children

Question 9

What are the 3 major components of Social Class?

Answer 9

1. Occupation
2. Income
3. Education

Question 10

What is Occupational Prestige?

Answer 10

A person’s occupation tends to be strongly linked to their use of leisure time, allocation of family resources and political orientation,

Question 11

What is Geodemographic Segmentation?

Answer 11

Combines data on consumer expenditures and other socioeconomic factors with geographic information about the areas in which people live.

Question 12

What is PRIZM (Potential Rating Index by Zip Market)?

Answer 12

Each US zip code is assigned one or more of 66 categories, based on the area’s shared socioeconomic characteristics.

Question 13

What is ACORN (A Classification of Residential Neighbourhoods)?

Answer 13

Market Analysis Group. Uses 40 variables to identify what consumers within a specific neighbourhood ear and buy.

Question 14

What is Psychographic Segmentation?

Answer 14

Attempts to answer the “Why’s” of purchasing behaviour, looking at lifestyle, personality and values.

Question 15

What are the 3 variables of Lifestyle?

Answer 15

1. Activities
2. Interests
3. Opinions

Question 16

What does Lifestyle look into?

Answer 16

Discover how they spend their time, what they find interesting and important, and how they view themselves and the world around them.

Question 17

What are Personality Traits?

Answer 17

The identifiable characteristics that define a person (e.g. extrovert, introvert, innovative, materialistic, self-conscious, etc)

Question 18

What are the issues of using Personality Traits?

Answer 18

1. Scales are not sufficiently valid/reliable, results are not stable
2. Many trait scales measure overall tendencies (might not predict purchases of specific brands)
3. Lack of train for the researchers

Question 19

What is VALS Framework?

Answer 19

Lifestyle segmentation was developed by a research team at the Stanford Research Institute. Segments are based on whether people control abundant or minimal resources and their basic motivational self-orientations.

Question 20

What are the 8 Segments of the VALS Framework?

Answer 20

1. Innovators
2. Thinkers
3. Believers
4. Achievers
5. Strivers
6. Experiencers
7. Makers
8. Survivors

Question 21

What is Behavioural Segmentation?

Answer 21

Buyers are divided into groups on the basis of differences in their knowledge, attitude, use or response to a product.

Question 22

What are the 4 variables for Behavioural Segmentation?

Answer 22

1. Benefit Sought
2. User Rate
3. Occasions
4. User Readiness

Question 23

What is Micro-Level Segmentation?

Answer 23

Describes segments relative to specific behaviours. Small, intense subgroups such as:

• Social Geeks
• Office Romancers
• Young Knitters