Segmenting, Targeting & Positioning (Ch. 5)

Question 1

Market segmentation

Answer 1

Dividing the total market into smaller, distinct and relatively homogenous groups who respond similarly to marketing tactics
- Embracing diversity (not everyone likes or responds to everything the same)

Question 2

Name and describe the 4 Market Segment Forms

Answer 2

Undifferentiated (mass marketing): focuses on common needs of consumer
Differentiated (segmented): targets several segments, has separate offers
Concentrated (niche): acquiring large share of one segment
Micro (individualized): customizing offer to meet individual needs or locations

Question 3

Segmentation Variables

Answer 3

Geographic
Demographic
Psychographic
Behavioral/Product Usage

Question 4

Geographic Segmentation Variable

Answer 4

dividing market into groups based on location, environment, climate

Question 5

Demographic Segmentation Variable

Answer 5

dividing market into groups according to personal characteristics (gender, age, religion, education)

Question 6

Psychographic Segmentation Variable

Answer 6

divides market into groups based on psychological characteristics, lifestyles & attitudes (outdoorsy, risk taker, homebody)

Question 7

Behavioral Segmentation Variable

Answer 7

divides market into homogenous groups based on their reponse to a product: usage rate, purchase occasion, benefits they seek, loyalty)

Question 8

Positioning

Answer 8

the way the product is defined by consumers on important attributes
- the space the product occupies in a consumers’ mind relative to competitors

Question 9

How do firms decide on differentiation and positioning in a market segment?

Answer 9

• decide what separates them from competitors
• choose some of these differences to focus on
• decide how to position their product

Question 10

What are three ways that companies can differentiate from competitors

Answer 10

Value
Versus competitors (away or against)
Product differentiation

Question 11

Differentiation: Competition

Answer 11

Relate to existing mental structures in the consumers’ mind
- Positions the product against something consumers already know, but away from the leader to differentiate
(7Up: the uncola, Jamaica: the Hawaii of the Caribbean)

Question 12

Positioning Statement

Answer 12

If you asked a customer in your target market to assess your product’s benefits, what would you want them to say

Question 13

Perceptual Map

Answer 13

Graph showing the highs and lows of consumer preferences
- Helps companies understand how their product is positioned vs. competitors
- New products and features, can change positions of products on map

Question 14

What do perceptual maps tell us?

Answer 14

• What the current reality is for consumer
• Who is your competition
• What segements are being served
• If you modified your product, who would you take market share from
• If you developed a new product, what segment to target