Chapter 5 ("Market Segmenting, Targeting, and Positioning") Flashcards Preview

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What is the difference between market segments and target markets?

market segmentation: The process of breaking down all consumers into groups of potential buyers with similar characteristics.

targeted marketing: Choosing select groups of people and organizations to sell to is called .


What is demographic segmentation? Name and explain at least 5 different ways to demographically segment customers?

Segmenting buyers by tangible, personal characteristics such as their ages, incomes, ethnicity, family sizes, and so forth.

Family life cycle
Family size
Social class


How would you describe psychographics? Name and explain at least 4 variables can you use to segment customers

Segmenting people by their activities, interests, opinions, attitudes, values, and lifestyles.



8 VAL types


Innovators. Innovators are successful, sophisticated, take-charge people with high self-esteem.

Thinkers. Thinkers are motivated by ideals. They are mature, satisfied, comfortable, and reflective people who value order, knowledge, and responsibility.

Achievers. Motivated by the desire for achievement, Achievers have goal-oriented lifestyles and a deep commitment to career and family.

Experiencers. Experiencers are motivated by self-expression. As young, enthusiastic, and impulsive consumers, Experiencers quickly become enthusiastic about new possibilities but are equally quick to cool.

Believers. Like Thinkers, Believers are motivated by ideals. They are conservative, conventional people with concrete beliefs based on traditional, established codes: family, religion, community, and the nation.

Strivers. Strivers are trendy and fun loving. Because they are motivated by achievement, Strivers are concerned about the opinions and approval of others.

Makers. Like Experiencers, Makers are motivated by self-expression. They express themselves and experience the world by working on it—building a house, raising children, fixing a car, or canning vegetables—and have enough skill and energy to carry out their projects successfully.

Survivors. Survivors live narrowly focused lives. With few resources with which to cope, they often believe that the world is changing too quickly.


How would you describe product-related (behavioral) segmentation? Name and explain three variables to segment customers

Behavioral segmentation divides people and organization into groups according to how they behave with or act toward products.

Benefits segmentation—segmenting buyers by the benefits they want from products. 例:歯磨き粉

Another way in which businesses segment buyers is by their usage rates—that is, how often, if ever, they use certain products. 例:カジノのhigh rollers.

The way in which people use products is also a basis for segmentation. 例:美容目的で発売されていた商品が一部の人たちの中で虫除けとして使われていたことが発覚。それ以来その会社は虫除け製品も発売。


Explain each of these criteria for market segments:

Measurable purchasing power and size

Match with marketing capabilities

Able to serve the segment

Good profit potential

Measurable purchasing power and size: The market should be sizeable enough to be profitable given your operating cost.

Match with marketing capabilities. You might have a great idea to market home electronics to a large number of smaller market segments, but this can be prohibitively expensive. Smaller companies may be better served to set up children's play areas equipped with the home electronics so parents could watch their children interacting with the devices, learn about the features and benefits of the devices in a more kinesthetic way, and envision how the items might appear in their own homes.

Able to serve the market segment: Either the market is already accessible or you can find a way to reach it. Accessibility, or the lack of it, could include geographic accessibility, political and legal barriers, technological barriers, or social barriers. 例)to overcome geographic barriers, the consumer products company Unilever hires women in third-world countries to distribute the company’s products to rural consumers who lack access to stores.

Good profit potential: The market should be growing and not saturated with competitors.
例)インドのmiddle classが急激に増え始めているのでconsumer products companiesにとっては美味しい国である。



Tailoring a product or its marketing so that it stands out from the competition and people want to buy it.


Explain each of these approaches to positioning:
1) attributes
2) price/quality
3) competitors
4) application
5)product user
6) product class

1) attributes
Highlighting a specific attribute of your product can also be compelling. For example, Ritz Carlton hotels focus on luxury; Motel 6 focuses on economy.

2) price/quality
Tiffany and Costco both sell diamonds. Tiffany wants us to believe that their diamonds are of the highest quality, while Costco tells us that diamonds are diamonds and that only a chump will pay Tiffany prices.

3) competitors
BMW and Mercedes often compare themselves to each other segmenting the market to just the crème de la crème of the automobile market. Ford and Chevy need not apply.

4) application
The users of Apple computers can design and use graphics more easily than with Windows or UNIX. Apple positions its computers based on how the computer will be used.

5)product user
Facebook is a social networking site used exclusively by college students. Facebook is too cool for MySpace and serves a smaller, more sophisticated cohort. Only college students may participate with their campus e-mail IDs.

6) product class
Margarine competes as an alternative to butter. Margarine is positioned as a lower cost and healthier alternative to butter, while butter provides better taste and wholesome ingredients.


How can a firm use a positioning map to help them develop marketing strategy?

A perceptual map is a two-dimensional graph that visually shows where your product stands, or should stand, relative to your competitors, based on criteria important to buyers.

To avoid head-to-head competition with your competitors, you want to position your product somewhere on the map where your competitors aren’t clustered.


Sherman Act
Federal Trade Commission (FTC)
Food and Drug Administration
Consumer Product Safety Commission

Sherman Act : prohibits U.S. firms from restraining trade by creating monopolies and cartels.

Federal Trade Commission (FTC): regulates deceptive advertising.

Food and Drug Administration: regulates the labeling of consumable products, such as food and medicine.

Consumer Product Safety Commission: the group that sets safety standards for consumer products.


4 Marketing Strategies For Deflationary Times

-Price your bundle of goods and services at the level of your fixed costs, which should result in a significant price reduction.

-A second strategy is to first unbundle all your goods and services, pricing them on an individual basis. Then provide some of the goods, features or services on a no-cost basis.

A third strategy is to offer financing terms, i.e., volume discounts, trade-in/trade up programs, delayed payments, etc. A working assumption is that you can afford to carry the cost of financing your sales.

A fourth strategy is to focus on the values delivered by your product, i.e., faster greater ROI, ease of installation, ease of use, etc. as compared to the lower priced competition. This differentiation strategy requires that your values can be quantified and easily understood.