Segmentation, Targeting, and Positioning

Question 1

What are the steps marketers must follow for effective target marketing?

Answer 1

1) Identify and profile distinct groups of buyers who differ in their needs and wants (market segmentation)
2) select one or more market segments to enter (market targeting)
3) establish, communicate, and deliver the right benefit(s) to each target segment (market positioning).

Question 2

What is market segmentation?

Answer 2

A market segment consists of a group of customers who share a similar set of needs or wants. The marketer’s task is to identify the appropriate number and nature of market segments and decide which one(s) to target.
-Some researchers define segments by looking at descriptive characteristics–geographic, demographic, and psychographic.
-Other researchers look at behavioural considerations, such as how consumers respond to benefits, usage occasions, or brands.

Question 3

What are the four main types of market segmentation?

Answer 3

1) Geographic Segmentation
2) Demographic segmentation
3) Psychographic segmentation
4) Behavioural segmentation

Question 4

What are some key variables of market segmentation?

Answer 4

1) Age and Life-Cycle Stage: Crest offers toothpaste lines for children, adults, and the elderly. Pampers divides its market into new baby(0-5 months), baby(6-12 months), toddler(13-23 months), and preschooler(24+ months)
2) Life Stage: There are many life stages including going through a divorce, going into a second marriage, taking care of an older parent, buying a home etc.
3) Gender
4) Income
5) Generation
6) Race and Culture

Question 5

How can different generations be marketed to differently?

Answer 5

1) Millennials have a sense of entitlement from growing up during the economic boom, but also are socially conscious and concerned about the environment. They may be turned off by overt marketing practices.
2) Gen X are the first generation who found it challenging to surpass their parents quality of life. They are pragmatic and individualistics, prize self-sufficiency, and view technology as an enabler as opposed to a barrier.
3) Study found baby boomers are willing to change brands, spend on technology, use social networking sites, and purchase online.
4) The Silent Generation are demanding customers but are more willing than younger cohorts to pay full price for offerings they value.

Question 6

What is psychographic segmentation

Answer 6

-Psychographics is the science of using psychology and demographics to better understand consumers.
-In psychographic segmentation, buyers are divided into groups on the basis of psychological/ personality traits, lifestyle, or values.

Question 7

What is the VALS framework?

Answer 7

-Classifies U.S. adults into eight primary groups based on responses to a questionnaire.
-The VALS segmentation framework are consumer motivation and consumer resources
-Consumers are inspired by one of three primary motivations: ideals, achievement, and self-expression.
-Below look at how the first thing is on top, and the second thing is on the bottom.
-Ideals: thinkers, believers
-Achievement: acheivers, strivers
-Self-Expression: experiences, makers
-Innovators at the top, survivors at the bottom.

Question 8

What is behavioral segmentation? What are behavior variables?

Answer 8

-In behavioral segmentation, marketers divide buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product.
-Below are the two main behavioural variables.
-Needs and Benefits: Needs-based or benefit-based segmentation identifies distinct market segments with clear marketing implications.
-Decision Roles: People can play five roles in a buying decision: Initiator, Influencer, Decider, Buyer, and User. For example, assume a wife initiates a purchase by requesting a new treadmill for her birthday. The husband may seek information from many sources, including a friend who has a treadmill and is a key influencer in what models to consider. After presenting the alternative choices to his wife, he purchases her preferred model, which ends up being used by the entire family. Different people are playing different roles, but all are crucial in the decision process and ultimate consumer satisfaction.