Segmenting

Question 1

Name four segmentation bases

Answer 1

1. Geographic segmentation: dividing the market into geographical units, e.g. nations, regions, cities.
2. Demographic segmentation: grouping customers based on age, family size, life stage, gender, income, marital status, education, occupation, religion, etc.
3. Psychographic segmentation: psychological/ personality traits, e.g. lifestyles and values.
4. Behavioral segmentation: based on knowledge of, attitude toward, use of, or response to an offer. Needs, benefits, decision roles, user and usage, etc.

Question 2

Which are the four segmentation bases?

Answer 2

1. Geographic segmentation: dividing the market into geographical units, e.g. nations, regions, cities.
2. Demographic segmentation: grouping customers based on age, family size, life stage, gender, income, marital status, education, occupation, religion, etc.
3. Psychographic segmentation: psychological/ personality traits, e.g. lifestyles and values.
4. Behavioral segmentation: based on knowledge of, attitude toward, use of, or response to an offer. Needs, benefits, decision roles, user and usage, etc.

Question 3

Name two characteristics of nonsense segments

Answer 3

• No meaningful difference

* No identifiers

Question 4

Name five criteria for successful segmentation

Answer 4

Measurable - can we learn about the segment?

Substantial - is it large and profitable enough to serve?

Accessible - can we effectively reach and serve it?

Differentiable - does it respond differently than other segments?

Actionable - can we design effective programs for serving it?

Question 5

Which segmentation practices will be most important to stable markets and changing/forming markets, respectively?

Answer 5

• Stable markets allow for segmentation using descriptive practices
• Changing or forming markets require more of constructive practices

Question 6

Name thee possible areas of market constructing efforts

Answer 6

Market structure - the number and constitution of market participants (suppliers, competitors, customers)

Market behavior - modes of exchange and/or use

Market meanings - understandings of products and their uses

Question 7

Summarize predictive and effectual logic, respectively, in two sentences

Answer 7

Predictive logic of foresight: if we can predict the future, then we can control it

Effectual logic of non-predictive control: if we can control the future, we don’t need to predict it

Question 8

Name “four entrepreneurial principles”

Answer 8

Patchwork quilt principle - creating something new with existing means

Affordable loss principle - committing in advance to what one is willing to lose

Bird-in-hand principle - negotiating with those who commit, adjusting goals to accommodate them

Lemonade principle - appropriating contingency and leveraging surprise (turn lemons into lemonade)

Question 9

Name four assumptions of STP-marketing

Answer 9

The market is there
The product is known
Reliable data from customers
The firm can adapt its offers

Question 10

Name five criteria for successful segmentation

Answer 10

Measurable - can we learn about the segment?

Substantial - is it large and profitable enough to serve?

Accessible - can we effectively reach and serve it?

Differentiable - does it respond differently than other segments?

Actionable - can we design effective programs for serving it?