Segmenting and Targeting Markets

Question 1

People or organizations with needs or wants and the ability and willingness to buy

Answer 1

market

Question 2

four shared characteristics of a market

Answer 2

1. composed of people or organizations
2. they have wants and needs that can be satisfied by particular product categories
3. they have the ability to buy the products they seek
4. they are willing to exchange their resources, usually money or credit, for desired products

Question 3

a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Answer 3

market segment

Question 4

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

Answer 4

market segmentation

Question 5

the purpose of market segmentation

Answer 5

to enable the marketer to tailor marketing mixes to meet the need of one or more specific segments

Question 6

True or False:

Until the 1960s, few firms practiced market segmentation

Answer 6

True

Question 7

Three important reasons that marketers segment markets

Answer 7

• enables marketers to identify groups of customers with similar needs and to analyze the characteristics and buying behavior of these groups
• provides marketers with information to help them design marketing mixes specifically matched with the characteristics and desires of one or more segments
• is consistent with the marketing concept of satisfying customer wants and needs while meeting the organization’s objectives

Question 8

a segmentation scheme must produce segments that meet what four basic criteria

Answer 8

substantiality
identifiability and measurability
accesibility
responsiveness

Question 9

characteristics of individuals, groups, or organizations

Answer 9

segmentation bases (variables)

Question 10

segmenting markets by region of a country of the world, market size, market density, or climate

Answer 10

geographic segmentation

Question 11

segmenting markets by age, gender, income, ethnic background, and family life cycle

Answer 11

demographic segmentation

Question 12

a series of stages determined by a combination of age, marital status, and the presence or absence or children

Answer 12

family life cycle (FLC)

Question 13

market segmentation on the bases of personality, motives, lifestyles, and geodemographics

Answer 13

psychographic segmentation

Question 14

segmenting potential customers into neighborhood lifestyle categories

Answer 14

geodemographic segmentation

Question 15

the process of grouping customers into market segments according to the benefits they seek from the product

Answer 15

benefit segmentation

Question 16

dividing a market by the amount of product bought or consumed

Answer 16

usage rate segmentation

Question 17

80/20 principle

Answer 17

a principle holding that 20 percent of all customers generate 80 percent of the demand

Question 18

the business market consists of what four broad segments

Answer 18

producers, resellers, government, and instituions

Question 19

business customers who place an order with the first familiar supplier to satisfy product and deliver requirements

Answer 19

satisficers

Question 20

business customers who consider numerous suppliers (both familiar and unfamiliar) solicit bids, and study all proposals carefully before selecting one

Answer 20

optimizers

Question 21

the purpose of market segmentation, in both consumer and business markets, is

Answer 21

to identify marketing opportunities

Question 22

a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges

Answer 22

target market

Question 23

a marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix

Answer 23

undifferentiated targeting strategy

Question 24

a strategy used to select one segment of a market for targeting marketing efforts

Answer 24

concentrated targeting strategy

Question 25

one segment of a market

Answer 25

niche

Question 26

a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each

Answer 26

multisegment targeting strategy

Question 27

a situation that occurs when sales of a new product cut into sales of a firm’s existing products

Answer 27

cannibalization

Question 28

an individualized marketing method that utilizes customer information to build long term, personalized, and profitable relationships with each customer

Answer 28

one-to-one marketing

Question 29

Four trends that will lead to the continuing growth of one-to-one marketing

Answer 29

personalization, times savings, loyalty, and technology

Question 30

developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general

Answer 30

positioning

Question 31

the place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings

Answer 31

position

Question 32

a positioning strategy that some firms use to distinguish their products from those of competitors

Answer 32

product differentiation

Question 33

a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds

Answer 33

perceptual mapping

Question 34

changing consumers’ perceptions of a brand in relation to competing brands

Answer 34

repositioning