12 Questions
What is market segmentation?
The process of dividing large heterogeneous markets into small markets based on unique needs
Which of the following is NOT a method of segmenting consumer markets?
Economic segmentation
What is the purpose of market targeting?
To reach large heterogeneous markets more efficiently and effectively
What is the objective of market differentiation?
To make a product or service appear distinct from its competitors in the eyes of the target market
Why is it important to segment international markets?
To tailor products and services to the unique needs of different countries and cultures
Which segmentation method categorizes consumers based on their lifestyles, values, and personality traits?
Psychographic segmentation
What is geographic segmentation in market segmentation?
Dividing the market into different geographical units such as nations, regions, states, counties, or cities
What is demographic segmentation based on?
Age and life-cycle stage
What is psychographic segmentation based on?
Social class, lifestyle, or personality traits
What does behavioral segmentation divide buyers into groups based on?
Usage rate and loyalty status
What is geodemographic segmentation an example of?
Psychographic segmentation
What does PRIZM NE classify every American household into?
66 unique segments organized into 14 different social groups
Study Notes
Market Segmentation
- Market segmentation is the process of dividing a larger market into smaller groups of consumers with similar needs, characteristics, or behaviors.
Methods of Market Segmentation
- Geographic segmentation: divides consumers based on their geographical location, climate, or region.
- Demographic segmentation: based on demographic variables such as age, sex, income, occupation, education, and family size.
- Psychographic segmentation: based on consumers' lifestyles, values, and personality traits.
- Behavioral segmentation: divides buyers into groups based on their knowledge, attitude, use, or response to a product.
- Geodemographic segmentation: combines geographic and demographic characteristics to segment consumers.
Market Targeting
- The purpose of market targeting is to select the most profitable segments and develop marketing mixes tailored to each segment.
Market Differentiation
- The objective of market differentiation is to create a unique identity for a product or service, distinguishing it from competitors.
International Market Segmentation
- It is important to segment international markets because consumer needs, preferences, and behaviors can vary significantly across different countries and regions.
PRIZM NE
- PRIZM NE is a geodemographic segmentation tool that classifies every American household into one of 66 distinct lifestyle types, based on demographics, lifestyle, and behavior.
Test your knowledge on market segmentation, market targeting, differentiation, and positioning in the context of customer-driven marketing strategy. Explore key concepts from Chapter 7 of 'Customer-Driven Marketing Strategy: Creating Value for Target Customers'.
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