Chapter 6 Segmentation, Targeting and Positioning

Question 1

PRIZM5 Grouped into 68 lifestyle segments based on

Answer 1

• Demographics
• Psychographics
• Media Preferences

Question 2

4 Marketing Strategies

Answer 2

• Mass Marketing
• Segment Marketing
• Niche Marketing
• Individualized Marketing

Question 3

Mass Marketing

Answer 3

Marketing to the entire market with no marketing or product differentiation (natural gas, vegetables)

Question 4

Segment Marketing

Answer 4

Potential customers put into groups and demographics that have common needs and respond to similar marketing programs (most common)

Question 5

Niche Marketing

Answer 5

marketing to a specific group or segment or a single demographic (Tesla only makes electric cars, sold through small numbers of tesla stores not dealerships)

Question 6

Individualized Marketing

Answer 6

One-to-One marketing involving customizing offers and products to fit individual needs.

Question 7

Key to successful product differentiation and market segmentation strategies

Answer 7

Satisfying customer’s individual wants and being able to make a profit

Question 8

Fundamental Concepts marketers use to run their business and market products

Answer 8

• Segmentation
• Targeting
• Positioning

Question 9

Fundamental Concepts are based on 3 important facts

Answer 9

1) Consumers have a range of different needs, a single product can not satisfy everyone
2) Companies have limited amounts of money, so spend it efficiently and effectively on consumers who are most likely to make purchase
3) Marketers need to have clear consumer insights in terms of product needs, price expectations, purchase habits, and communication tools most used

Question 10

Consumer Market

Answer 10

Consists of goods, services, and ideas that a person can purchase, use, or support for personal use

Question 11

Business Market

Answer 11

Products purchased used to run a business or to be used as a component in another product or service

Question 12

Product Differentiation

Answer 12

Making a product appear distinct from competitive offerings to a target group (so its unique and stands out)

Question 13

Target Market Profile

Answer 13

Description of the target market containing specific information about target groups in 4 areas

Question 14

4 Important Variables of Target Market

Answer 14

• Geographics
• Demographics
• Psychographics
• Behaviouristics

Question 15

Geographics

Answer 15

Looks at where a target market lives (country, region, province, city size, population density)

Question 16

Demographics

Answer 16

Identifying ages, gender, family composition, income, occupation, education, ethnic background, and home ownership

Question 17

Psychoraphics

Answer 17

Understanding consumers attitudes to life, values, personalities, interests, opinions, media usage, technology preferences, and activities (hardest to identify for marketers) Usually based on primary research

Question 18

Behaviouristics

Answer 18

How and why consumers buy and use products. How frequently they buy, where they buy, are they brand loyal. (one of the most important variables)

Question 19

Primary Research

Answer 19

Can help understand why consumer buy a product, what benefits are most important, and how its used

Question 20

Secondary Research

Answer 20

Provide industry data regarding where products are most frequently bought

Question 21

Brand Loyalty

Answer 21

favorable attitude that consumer has towards the brand and the commitment they have for it. Brands want brand loyal customers to help protect them from competition and changing marketing environments

Question 22

Personas

Answer 22

Character descriptions of a typical customer in the form of fictional character narratives with images that capture the personalities, values, attitudes, beliefs, demographics, and expected interactions with the brand (captured in one page or snapshot)

Question 23

Good Personas Include

Answer 23

Gender, age, interests, hobbies, education, goals, jobs, influencers, media usage, technology preferences, fears, concerns, drivers, and delights and interactions with brand

Question 24

Segmentation Analytics

Answer 24

Data that help marketers target specific groups with better accuracy (Environics, Nielsen, Euromonitors, PRIZM5)

Question 25

Steps in Market Segmentation

Answer 25

1) Identify consumer/customer needs and common characteristics in the market 2) Cluster common consumers/customer variables to create meaningful market segments 3) Estimate the size and feasibility of each segment 4) Identify the segment(s) to be targeted 5) Take actions with marketing programs to reach the segment(s) 6) Monitor and evaluate the success of these programs compared with objectives

Question 26

Identify consumer/customer needs and common characteristics in the market

Answer 26

Identify common interests and evolving trends by analyzing what products exist in the category, which areas in the market are shrinking or expanding, what customers/consumers are interested in. To use these data to clarify questions and see purchase patterns

Question 27

Cluster common consumer/customer variables to create meaningful market segments

Answer 27

look for clusters of products and gaps in the market that point out to common consumer/customer interests, and usage patterns to better identify a target segment. Don't overlook on new interests trends as they can be a evolving segment

Question 28

Estimate the size and feasibility of each segment

Answer 28

Estimate size of the segment based on external data or use of segmentation analytics data. This can help marketer estimate the sales potential of the segment and also predict competitive reactions

Question 29

Identify the segment(s) to be targeted by following the 5 criteria

Answer 29

Market Size: Size of market is important for deciding if its worth going for. Is segment large enough to generate expected sales? Expected Growth: Even if the market size is small, the growth growth rate might significant Competitive Position: Are there a lot of competition now or will there be a lot in the future? Compatibility with the organization's objectives and resources: will targeting this segment be consistent with the company's objective and goal? Cost of reaching this segment: if the cost of reaching this segment is too great, don't go for it

Question 30

Take actions with marketing programs to reach the segments

Answer 30

When segment is targeted, need to make a marketing plan and decisions has to be made regarding the marketing mix (product, price, place, and promotion) that are consistent with the wants and needs of the targeted segment

Question 31

Monitor and evaluate the success of these programs compared with objectives

Answer 31

determining the sales forecasts, costs, and profits and comparing it with the cost and sales projections

Question 32

Positioning

Answer 32

The impression of the product you want your customers to keep in mind relative to their needs and how its different from competitors

Question 33

3 Factors in product positioning

Answer 33

- Image - Product Attribute - Price

Question 34

Image

Answer 34

How the brand or product is is looked at by consumers. Products are often positioned as leaders, contenders, or rebels, also as trusted, and prestigious.

Question 35

Product Attribute

Answer 35

products with features that make them different and stand out from competitors.

Question 36

Price

Answer 36

Products with little product differentiation may position themselves on the price platform (Walmart: Everyday low prices)

Question 37

Positioning Statements

Answer 37

Used to clearly and simply outline the positioning of the product in the market and what sets it apart. Simple, clear, and focused. 1) The target market and need 2) The branded product name 3) Category in which the product competes 4) The brands unique attribute and benefits

Question 38

Repositioning

Answer 38

To change the consumer's attitude and opinion of the brand and shift in the brands image to more accurately meet their needs (Usually done overtime to refresh the brand and elements of its marketing mix)

Question 39

Positioning Maps (Perceptual Maps)

Answer 39

Visual representations of how products in a category is positioned in a consumer's mind

Question 40

3 steps to discover the perceptions in the mind of potential consumers

Answer 40

1) Identify the important attributes for a product or brand class: Important attributes might not be cash, but what they value and want in product like scent, taste, nutrition, etc 2) Discover how target customers rate competing products or brands with respect to these attributes 3) Discover where the company's product or brand is on these attributes in the minds of potential customers