Chapter 6

Question 1

segmentation-targeting-position process

Answer 1

1- Strategy or objectives
2- Segmentation bases
3- Evaluate segment attractiveness
4- Select target market
5- Identify and develop positioning strategy

Question 2

explain Step 1- Strategy or objectives

Answer 2

consistent with mission statement and derived from mission and current state

Question 3

explain Step 2- Segmentation bases

Answer 3

geographic, demographic, psychographic, behavioural

Question 4

explain Step 3- Evaluate segment attractiveness

Answer 4

identifiable : who’s is in their market?, are the segments unique?, does each segment require a unique marketing mix?

reachable: customer must: know the product exist, understand what it can do, recognize how to buy it

responsive : customer must: react positively to firm’s offering, move toward the firm’s products/services, accept the firm’s value proposition

substantial and profitable: too small & the segment is insignificant, & will not be profitable, growth potential equally important

Question 5

explain Step 4- Select target market

Answer 5

based on swot analysis

Question 6

explain Step 5- Identify and develop positioning strategy

Answer 6

value - price to quality
product attributes- What matters?
Benefits & symbolism - psychological meaning
competition and market leadership - against one competitor or against the product classification/ industry

Question 7

Describe the bases marketers use to segment a market

Answer 7

1. geographic or demographic segmentation: helps to identify customers easily.
2. lifestyle, benefits and loyalty segmentation: dig deeper into why customers might buy its offerings.
3. Geodemographic segmentation: blend of geographic, demographic, and psychographic approaches. Typically, a combination of several segmentation methods is most effective.

Question 8

Identify the criteria for determining the attractiveness of a segment and whether it is worth pursuing (targeting).

Answer 8

1. customers should be identifiable: companies must know what types of people are in the market so they can direct their efforts appropriately
2. market should be reachable: the firm must be able to reach the segment through effective communications and distribution.
3. firm must be responsive to the needs of customers in a segment : must be able to deliver a product or service that the segment will embrace
4. market must be substantial enough to be worth pursuing: if relatively few people appear in a segment, it is probably not cost-effective to direct special marketing mix efforts toward them.
5. segment must be profitable: both in the near term and over the lifetime of the customer.

Question 9

Explain the differences among targeting strategies: undifferentiated, differentiated, concentrated, or micromarketing

Answer 9

undifferentiated: no segmentation at all and works for only products or services that most consumers consider to be commodities.

differentiated: targets multiple segments (larger firms)
concentrated: targets only one segment (smaller firms)

micromarketing: tailor their product/service offering to each customer—that is, it is custom-made

Question 10

Define positioning and describe how firms do it

Answer 10

refers to how customers think about a product, service, or brand in the market relative to competitors’ offerings.

criteria:

value: customers get a lot for what the product or service costs.

important product attributes: position their offering on the basis of those attributes.

benefits and symbols: few products or services are associated with symbols that are compelling enough to drive people to buy.

market leadership: dominant position in their market to position their products or services.

competition: most common positioning methods and relies on the favourable comparison of the firm’s offerings with the products or services marketed by competitors.