Exam 2 | Chapters 8-12

Question 1

Market

Answer 1

people or organizations with needs or wants and the ability and willingness to buy

Question 2

Market Segment

Answer 2

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

Question 3

Market Segmentation

Answer 3

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

Question 4

Criteria for Successful Segmentation

Answer 4

1. Sustainability
2. Identifiability and Measurability
3. Accessibility
4. Responsiveness

Question 5

Segmentation Bases

Answer 5

characteristics of individuals, groups, or organizations

Question 6

Geographic Segmentation

Answer 6

segmenting markets by region of a country or the world, market size, market density, or climate

Question 7

Demographic Segmentation

Answer 7

segmenting markets by age, gender, income, ethnic background, and family life cycle

Question 8

Age Segmentation

Answer 8

Segment by age range or by generational cohort

Question 9

Ethnic Segmentation

Answer 9

Products geared towards ethnic groups

Question 10

Family Life Cycle (FLC)

Answer 10

a series of stages determined by a combination of age, marital status, and the presence or absence of children

Question 11

Psychographic Segmentation

Answer 11

Segmentation type made up of personality (traits and attitudes), motives (emotions/desires), and lifestyles (how people spend their time)

Question 12

Examples of Psychographics

Answer 12

• Donates to causes that support her local community
• Member of the school PTA
• Reads Cosmopolitan Magazine
• Motivated to purchase products that make life easier because she is very busy
• Loves yoga

Question 13

Benefit Segmentation

Answer 13

the process of grouping customers into market segments according to the benefits they seek from the product

Question 14

Usage-Rate Segmentation

Answer 14

dividing a market by the amount of product bought or consumed

Question 15

80/20 Principle

Answer 15

20 percent of all customers generate 80 percent of the demand

Question 16

Target Market

Answer 16

a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges

Question 17

Undifferentiated targeting strategy

Answer 17

views the market as one big market with no individual segments and thus uses a single marketing mix (example: Model T Ford)

Question 18

Concentrated targeting strategy

Answer 18

a strategy used to select one segment of a market for targeting marketing efforts

Question 19

Concentrated Targeting Strategy Pros and Cons

Answer 19

Pros: can understand one market, can concentrate resources

Cons: Risky if the segment is too small or shrinks

Question 20

Multi-segment targeting strategy

Answer 20

a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each

Question 21

Multi-segment targeting strategy Pros and Cons

Answer 21

Pros: Potential greater profits, sales, economies of scale, minimizing risk

Cons: Higher costs for all operations, cannibalization

Question 22

Positioning

Answer 22

developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general

Question 23

Position

Answer 23

the place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings