Marketing Exam 2 - Chapter 8 Segmentation & Targeting Markets

A positioning strategy that positions the product as being associated with a particular category of products is using a ______ positioning base. product class competitor price and quality product user Assessment question

product class

A positioning strategy that focuses on personality or type of consumer is using a _______ positioning base. product user competitor price and quality product attribute Assessment question

product user

perceptual map

provides a valuable tool for helping managers position products by graphically illustrating consumers' perceptions of competing products within an industry

When a company changes consumers' perception of a brand in relation to competing brands, they are ______ the product. rearranging rebranding relocating repositioning

repositioning

product differentiation

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

Segmentation bases or variables

are the characteristics of consumers and organizations that marketers use to divide a market into segments five segmentation bases: geography, demographics, psychographics, benefits sought, and usage rate.

demographic segmentation

defines consumer groups according to demographic variables such as age, gender, income, ethnic background, and family life cycle stage

usage-rate segmentation

divides a market by the amount of product bought or consumed. Segments might be classified as heavy, moderate, or light users - 80/20 principle states that 20 percent of all customers generate 80 percent of the demand. Turning customers into heavy users is the goal of many frequency/loyalty programs

geographic segmentation

dividing an overall market into homogeneous groups based on their locations

A _______ is a way to display or graph, in two or more dimensions, the location of products, brands, or groups of products in customers' minds. portfolio chart product plot positioning matrix perceptual map Assessment question

perceptual map

Market

(1) people or organizations with (2) needs or wants and with (3) the ability and (4) the willingness to buy.

Marketers may choose to segment business markets by company characteristics, such as:

- Geographic location: Locating close to business customers can allow a company to better compete on price and service. T- ype of company: Allows marketers to tailor their marketing mixes to the organizations' unique needs. - Company size: Size may impact a company's response to the marketing mix and the types of products it needs. Product use: How a company uses a product may impact its buying process. - Volume of purchase: Organizations may be light, moderate, or heavy users.

Two purchasing profiles that have been identified are:

- Satisficers: business customers who place an order with the first familiar supplier to satisfy product and delivery requirements - Optimizers: business customers who consider numerous suppliers (both familiar and unfamiliar), solicit bids, and study all proposals carefully before selecting one

1. Business customers who consider numerous suppliers (both familiar and unfamiliar), solicit bids, and study all proposals carefully before selecting one are called _______. satisficers deciders optimizers gatekeepers Assessment question 2. If a company wishes to better compete on price and service, it should consider segmenting its business market on which basis? Geographic location Product use Type of company Company size

1. Optimizers 2. geographic location

There are six steps in segmenting a market.

1. Select a market or product category for study. This could be a new market, a current market, or a new but related market. 2. Choose a basis or bases for segmenting the market. There are no hard and fast rules for selecting bases, but the resulting segments must meet the four basic criteria discussed earlier. 3. Select segmentation descriptors. Descriptors identify the specific segmentation variables to use. For example, if a company selects psychographics as a basis for segmentation, it may use personality or motives as descriptors. 4. Profile and analyze segments. The segment profile should include the segment size, expected growth, purchase frequency, sales and profit potential, and brand loyalty. Marketers can then use this information to rank the segments by factors that are important to the company such as profit or risk. 5. Select markets. This is a natural outcome of the segmentation process. 6. Design, implement, and maintain appropriate marketing mixes. Product, price, place (distribution), and promotion strategies are developed with each segment in mind.

1. When a company uses a single marketing mix to target all customers, it is utilizing _______. undifferentiated targeting niche targeting multisegment targeting concentrated targeting Assessment question 2. An advantage of the _______ strategy is the firm may have a competitive advantage over other firms trying to reach multiple markets. undifferentiated targeting concentrated targeting multisegment targeting mass marketing Assessment question 3. When a company targets several different market segments and creates a different marketing mix for each segment, they are using _______. concentrated targeting multisegment targeting mass marketing undifferentiated targeting

1. Undifferentiated 2. concentrated targeting 3. multisegmental targeting

1. __________focuses on the attributes that consumers seek and what they expect to receive from a good or service. Psychographic segmentation Usage-rate segmentation Benefit segmentation Geodemographic segmentation Assessment question 2. Companies that use frequency/loyalty programs hope that consumers purchase more of the product or service. This is an example of _______. psychographic segmentation geodemographic segmentation benefit segmentation usage-rate segmentation Assessment question 3. A person's traits, attitudes, and habits are part of their _______. personality motives lifestyle demographics

1. benefit segmentation 2. usage-rate segmentation 3. personality

1. A market segment that is large enough to justify its own marketing mix is said to be _______. identifiable responsive accessible substantial 2. A market segment is _______ if marketers can reach members of the segment with customized marketing mixes. identifiable responsive accessible substantial 3. A market segment is _______ if marketers can distinguish who is in the segment through demographic information or geographic location. responsive substantial identifiable accessible

1. substantial 2. accesible 3. identifiable

Concentrated targeting strategy (niche marketing)

A single market segment is selected and the firm concentrates its efforts on profitably satisfying that market segment. - Tesla's Model S sport sedan offers high performance and energy efficiency to an upscale target market. A concentrated targeting strategy can create a potential competitive advantage over firms trying to reach multiple markets. It also increases the efficiency of the marketing mix, especially promotion because resources are not spread out over multiple segments. A disadvantage to this strategy is that chosen segments may not produce sufficient revenue to be profitable.

Undifferentiated targeting strategy (mass marketing)

All customers are targeted using a single marketing mix. For example, Red Bull is sold in the same format with the same branding, worldwide. - An undifferentiated targeting strategy provides production efficiencies and allows marketers to focus on similarities in needs or desired benefits among consumers rather than dissimilarities. However, products marketed in this way are vulnerable to competitors who offer specialized alternatives to targeted segments.

Multi-segmental targeting strategy

Several different market segments are targeted using a different marketing mix for each segment. - Nike, for example, offers specialized shoes for athletes pursuing various sports such as basketball, running, and golf. This strategy can lead to increased customer satisfaction and a potential for higher revenue overall. Unfortunately, offering multiple products can lead to higher production and promotion costs and may increase inventory costs as well.

Market Segmentation

The division of the total market into smaller, relatively homogeneous groups - allows companies to define consumer needs and develop products to meet those needs. Consider automakers—most offer several types of vehicles such as vans, sedans, sports coupes, and trucks. - attempts to isolate the traits that distinguish a certain group of consumers from the overall market.

Customer Relationship Management (CRM)

focuses on using information about customers to create marketing strategies that develop and sustain desirable customer relationships. - Personalization: Customers want personalized experiences and marketing messages directed to specifically to them. -Time savings: Direct and personalized messages can help consumers cut down the time spent making purchasing decisions. - Loyalty: Consumers are loyal to brands and companies that have earned their loyalty and rewarded them for it at every purchase. - Technology: Technology can enhance marketers' ability to collect information and reach customers.

Market Segment

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

psycographic segmentation

is market segmentation on the basis of personality, motives, lifestyles, and geodemographics. - Personality: Personality is based on a person's traits, attitudes, and habits. - Motives: Marketers may appeal to consumers' emotional status or rational motives. - Lifestyles: Lifestyles combine income, education, consumers' beliefs, and how they spend their time. - Geodemographics: Geodemographic segmentationcombines geographic, demographic, and lifestyle segmentations and clusters consumers into neighborhood lifestyle categories.

benefit segmentation

is the process of grouping customers into market segments according to the benefits they seek from the product. Benefit segmentation focuses on the attributes that consumers seek and the benefits they expect to receive from a good or service.