Chapter 7. Customer Value-Driven Marketing Strategy

Question 1

What are the two halves of a Marketing Strategy?

Answer 1

1. Selecting customers to serve
2. Decide on the value proposition

Question 2

What activities occur under the first half of the Marketing Strategy?

Answer 2

1. Market Segmentation
2. Market Targeting

Question 3

Define Segmenting

Answer 3

Dividing the market into distinct groups of buyers that are more easily reached.

Question 4

Define Targeting

Answer 4

Evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Question 5

What activities occur under the second half of the Marketing Strategy?

Answer 5

1. Differentiation
2. Positioning

Question 6

Define Differentiation

Answer 6

Differentiate the market offering to create superior customer value

Question 7

Define Positioning

Answer 7

Adjusting the marketing mix to meet the needs of the segment.

Question 8

What are variables used in Segmentation?

Answer 8

1. Geographic
2. Demographic
3. Psychographic
4. Behavioral

Question 9

Define Geographic segmentation

Answer 9

Dividing the market into different geographical units such as nations, cities, or neighborhoods.

Question 10

Define Demographic segmentation

Answer 10

dividing the market into segments based on demographic variables (age & life-cycle, gender, income etc.)

Question 11

Define Psychographic segmentation

Answer 11

Dividing the market into different segments based on lifestyle or personal characteristics (Ex. Panera)

Question 12

What is the VALS model?

Answer 12

Stands for Values and Lifestyles. Identifies 8 segments based on a questionnaire. Relates segments based on high and low resources and primary motivation (Ideals, Achievement, Expression).

Question 13

What are the 8 segments in the VALS model?

Answer 13

At the top are the Innovators and at the bottom are the Survivors.
Ideals: Thinkers, Believers
Achievement: Achievers, Strivers
Expression: Experiencers, Makers

Question 14

What is the PRIZM model?

Answer 14

68 unique segments with descriptive names. Takes into account number of households and household income.

Question 15

What are the Brand personalities (Aaker, 1998)?

Answer 15

1. Sincerity
2. Excitement
3. Competence
4. Sophistication
5. Ruggedness

Question 16

What are the types of Brand relationships (Fournier, 1998)?

Answer 16

1. Arranged Marriages
2. Best Friendships
3. Kinships
4. Flings
5. Secret Affairs

Question 17

Define Behavioral segmentation

Answer 17

Dividing the market into segments based on consumer knowledge, attitudes, uses of or responses to a product.

Question 18

What are the ways Behavior can be segmented?

Answer 18

1. Occasions behavior
2. Benefits sought
3. User status and usage rate
4. Loyalty status

Question 19

In what additional ways can Businesses be segmented?

Answer 19

1. operating characteristics
2. purchasing approaches
3. situational factors
4. personal characteristics

Question 20

What are the requirements of an effective Segment?

Answer 20

1. Measurable. The segments can be measured.
2. Accessible. The segments can be reached and served.
3. Substantial. Large and profitable enough to serve.
4. Differentiable. Segments respond differently to different marketing strategies.
5. Actionable. Segments are possible to target.

Question 21

What three factors must first look at in evaluating different market segments?

Answer 21

1. Segment size and growth
2. Segment structural attractiveness
3. Company objectives and resources

Question 22

Define Undifferentiated Marketing

Answer 22

Also called “mass-marketing.” In this strategy, a firm ignores market segment differences and uses one offer for the whole market.

Focuses on the common needs of the consumer.

Question 23

Define Differentiated Marketing

Answer 23

A firm targets several market segments and designs specific offers for each.

This strategy increases the costs of doing business.

Question 24

Define Concentrated Marketing

Answer 24

Also called “niche marketing.” In this strategy, a firm goes after a large share of one or a few smaller segments.

Achieves a strong position for the firm but carries the risk of relying on small segments for all their business.

Question 25

Define Micromarketing

Answer 25

Tailoring products and marketing programs to suit the specific tastes of individuals and local customer segments. Includes local marketing and individual marketing.

Question 26

Define Product Position

Answer 26

The way a product is defined by consumers. It’s the place the product occupies in consumers’ minds relative to competing products.

Question 27

What are Positioning Maps?

Answer 27

Perceptual Positioning Maps show consumer perceptions of brands versus competitors on important buying dimensions (Ex. Price and Performance in SUVs)

Question 28

What three steps are necessary in the Differentiation and Positioning task?

Answer 28

1. Identify possible Value Differences and Competitive Advantages 2. Choose the right Competitive Advantages 3. Select an overall Positioning Strategy

Question 29

What is the Value Proposition Table>

Answer 29

Plots "Benefits" (Less, the Same, More) against "Price" (Less, the Same, More). Evaluates winning and losing value propositions.

Question 30

Define Value Proposition

Answer 30

The full positioning of a brand - the full mix of benefits on which it is positioned.

Question 31

What must a firm do once a Position is built?

Answer 31

It must maintain the position through consistent performance and communication. The company must deliver the position.