Segmentation and Targeting

Question 1

What does it means to “segment” a market?

Answer 1

It means dividing a market into smaller groups with distinct NEEDS, CHARACTERISTICS or BEHAVIOR, who might require a separate product or marketing mix. (Reached more efficiently and effectively)

Question 2

To be useful, market segmentation must be:

Answer 2

1. Measurable
2. Accessible
3. Substantial
4. Differentiable
5. Actionable

Question 3

What are the different ways of segmenting a market?

Answer 3

1. Geographical
2. Demographic
3. Psycho-graphic
4. Behavioral

Question 4

What does it mean to segment a market “geographically”?

Answer 4

It means to segment a market into units such as nation, states, countries or cities. (Different needs and wants in different geographical locations)

Question 5

What does it mean to segment a market “Demographically”?

Answer 5

It means to segment a market based on variables such as age, gender, family size, family cycle, income.

Question 6

What does it mean to segment a market “Psycho-graphically”?

Answer 6

It means to segment a market based on social class, lifestyle, or personality characteristics.

Question 7

What does it mean to segment a market “Behaviorally”?

Answer 7

It means to segment a market based on their knowledge, attitude or responses to a product.

Question 8

Under demographic segmentation, what does it mean to use “age and life-cycle segmentation”?

Answer 8

It means to offer different products or use different marketing approaches for different age and life-cycle groups.

Question 9

What are some segmentation groups under behavioral segmentation?

Answer 9

1. Occasion

2. Benefit

Question 10

What is “Occasion segmentation”?

Answer 10

Dividing a market into groups according to occasions when buyers get the idea to buy actually make their purchase, or use the purchased item.

Question 11

What is “benefit segmentation”?

Answer 11

Dividing a market into groups accoridng to the different benefits that consumers seek from the product.

Question 12

What are some factors under benefit segmentation?

Answer 12

1. User status (non-users, ex, first time)
2. Usage rate (light, medium and heavy users)
3. Loyalty status (Loyalty points)

Question 13

How does a firm effectively target the market?

Answer 13

1. Evaluation criteria (of own company)

2. Target market selection

Question 14

What are the 3 factors firms consider for evaluation criteria?

Answer 14

1. Size and growth (of market)
2. Structural attractiveness
3. Firm’s Characteristics

Question 15

Under targeting, what are the different types of marketing?

Answer 15

1. Undifferentiated marketing
2. Differentiated marketing
3. Concentrated
4. Micromarketing

Question 16

What is undifferentiated marketing? (mass)

Answer 16

Undifferentiated marketing is where marketers focus to appeal to the biggest number of buyers

Question 17

What is differentiated marketing?

Answer 17

Differentiated marketing is where there are different marketing programs for different segmentations.

Question 18

What is concentrated marketing?(niche)

Answer 18

Concentrated marketing is where marketers target one sub-market (cater to small group of customer)

Question 19

What is micro-marketing?

Answer 19

Micro-marketing is where marketers tailor products and marketing program to suit the taste of specific individuals.

Question 20

What are the pros and cons of undifferentiated marketing?

Answer 20

(+): super cost efficient

(-): It overlooks smaller segments

Question 21

What are the pros and cons of differentiated marketing?

Answer 21

(+): More sales than undifferentiated marketing

(-): Increase business cost/Possible over segmentation

Question 22

What are the pros and cons of concentrated marketing?

Answer 22

(+): Good for resource limited firms

(-): Higher risk: due to limited segment, it can turn sour or have big competitor.

Question 23

Under targeting, If company have finite resources which marketing strategy should they adopt?

Answer 23

Concentrated. This is because it requires low resources.

Question 24

Under targeting, if a company has limited number of product variability, which strategy should they adopt?

Answer 24

Undifferentiated. This is because with low variability it is difficult to target specific segments. hence, company should just mass market.

Question 25

Under targeting, if the company is introducing a new product, which strategy should they adopt?

Answer 25

1. Undifferentiated: if there is only 1 version of the product.
2. Concentrated marketing if the company start out with less resources.

Question 26

Under targeting, if the company is targeting market with changing taste and preference, which strategy should they adopt?

Answer 26

Undifferentiated marketing. Since it is difficult to identify specific segments, it is better to just target all segments.

Question 27

Under targeting, if the company have vast resources, which marketing strategy should they adopt?

Answer 27

Differentiated marketing. This is because differentiated marketing is expensive, yet able to generate more sales than undifferentiated marketing.

Question 28

Under targeting, if the company have high number of product variability, which strategy should they adopt?

Answer 28

Differentiated or Concentrated marketing: Able to product different products for different resources but differentiated marketing is more expensive.

Question 29

Under targeting, if the company is marketing a matured product, which strategy should they adopt?

Answer 29

Differentiated marketing: This is because there are more products in the market already, hence able to target different segments.

Question 30

Under targeting, if the company is targeting a market with unchanging tastes and preferences, which strategy should they adopt?

Answer 30

Differentiated marketing. This is because they would be able to identify and target different segments effectively.