L7: Segmentation, Targeting and Positioning

Question 1

Segmentation

Answer 1

Identification of different groups in a market in order to develop different product/service offering for each segment.

Question 2

Benefits of segmentation

Answer 2

• Identify a cluster of similar consumers
  => More efficient use of resources and improve firm performance.
• Identify a profile of its typical desired customer.
  => Develop a product configuration, pricing scheme, promotional campaign, and distribution coverage plan to best meets the needs.

Question 3

Types of segmentation

Answer 3

Geography, Demography, Psychography, and Behaviour.

Cross-border segmentation and international challenge.

Question 4

Geographic bases for segmentation

Answer 4

• Ranging from local to global.
• Local segmentation: used by small firms in the beginning.
• Global segmentation: risk of cultural inappropriateness.
• Topography: includes elements like rivers, mountains, lakes, and valleys which may affect population movement.

Question 5

Psychographic bases for segmentation

Answer 5

Based upon similarity of value, attitude, lifestyle, personalities, and social class/status.

Question 6

Behaviouristic bases for segmentation

Answer 6

Built around similar understanding, use and responses to particular product/service.

Question 7

Framework for segmentation

Answer 7

• Customer characteristics:
  + soft - psychographic (value, lifestyle, attitudes)
  + hard (geography; socio-economic and demographic)
• Customer behaviour:
  + objective: loyalty/repeat purchase, price sensitivity, promotional response, usage
  + subjective: benefits, perceptions, preference trade-offs

Question 8

Cluster analysis

Answer 8

Classify objects so as to minimize within-group differences and maximize between-group difference.

Question 9

Conjoint analysis

Answer 9

The use of series of possible product/service attribute combinations to see which ones are preferred by respondents.
ex: Coca with lime, vanilla Coke or cherry Coke testing.

Question 10

Discriminant analysis

Answer 10

Identify a series of variables to discriminate the group membership from others.

Question 11

Multidimensional scaling

Answer 11

Visually demonstrates how particular consumers view various offerings in particular products/service. It’s used to determine which attributes are most distinctively associated with it.
ex: Perceptual mapping.

Question 12

Targeting

Answer 12

Actually deciding what the appropriate offer is for the aforementioned segments and develop a product/service offering to serve them.

Question 13

5 choices of coverage (Derek F. Abell, 1980)

Answer 13

1. Single-segment concentration: “a product per segment”
2. Selective specialization: some “a product per segment”
3. Product specialization: “a product per segments”
4. Market specialization: “products per segment”
5. Full market coverage: “products per segments”

Question 14

How attractive is the target segment?

Answer 14

• Market growth: Segment size, Growth rate, Market potential.
• Competitive intensity: Five forces + exit barriers.
• Company objectives: Fit with companies, Match with resources, Customer familiarity, Channel access.

Question 15

Criteria to evaluate the target segment:

Answer 15

• Measurable
• Accessible
• Substantial
• Differentiable
• Actionable

Question 16

Online targeting variable

Answer 16

• Relationship with company
• Demographic segmentation
• Psychographic or Attitude segmentation
• Value
• Lifecycle stage
• Behaviour

Question 17

Lifecycle stage in Online targeting variable

Answer 17

Position in lifecycle related to value and behaviour.

Ex: time since intial registration

Question 18

Value in Online targeting variable

Answer 18

Assessment of current and future value.

Question 19

Psychographic or Attitude segmentation in Online targeting variable

Answer 19

Attitude to risk and value when buying.

Ex: early adopter, brand loyal or price conscious.

Question 20

Relationship with company in Online targeting variable

Answer 20

Prospects, existing customers, lapsed customers.

Question 21

Demographic segmentation in Online targeting variable

Answer 21

B2C (age, gender, social group) and B2B (firm size, industry served, individual members).

Question 22

Online retargeting stages

Answer 22

1st-time visitor > Return visitor > Newly registered visitors > Registered visitor > Purchased once or n times > Purchase inactive > Purchase active

Question 23

Positioning

Answer 23

Understanding where our product/service offering stands in the minds of our customers and attempting to influence said position.

Question 24

Goal of positioning

Answer 24

• Ensure the target consumer has a clear and distinctive image in mind that is consistent and positive regarding the product/service.
• Keep brand name automatically at the top of the choice possibilities.

Question 25

Four criteria of the positioning statement (4C)

Answer 25

Clarity, Consistent, Credibility and Competitiveness.

Question 26

Three key components in the positioning statement

Answer 26

• The audience and context
• The value proposition
• The action to deliver

Question 27

The importance of Clear and Consistent criteria

Answer 27

Consumers might become confusing and create cognitive dissonance when messages are inconsistent over time.

Question 28

Repositioning model

Answer 28

According to Functional brand and Symbolic brand characteristics:
Brand positioning remained, Rational positioning, Emotional positioning, Complete positioning.

Question 29

Criticism of segmentation

Answer 29

• Dramatic change in preference and behaviour of consumers in a period of time.
• It’s difficult to define a segment for new product.

Question 30

Quantitative methods for research

Answer 30

Cluster analysis, Conjoint analysis, Discriminant analysis, and Multidimensional scaling.

Question 31

Perceptual mapping

Answer 31

Visual representation of the position our product/service offering and our competitors has in our customers minds.