Market Segmentation and Targeting Strategies
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Questions and Answers

What is a key characteristic that segments must possess for effective segmentation?

  • Strictly homogeneous behaviors
  • Large enough to be profitable (correct)
  • High level of complexity
  • Ability to dictate terms

Which factor is NOT considered a primary segmentation variable for business markets?

  • Brand reputation (correct)
  • Situational factors
  • Operating variables
  • Demographics

What might a loyalty program offer to encourage user retention?

  • Limited customer service options
  • Access to lower quality products
  • Exclusive access to certain products (correct)
  • Higher prices for loyal customers

When evaluating market segments, which aspect is important to determine segment growth?

<p>Segment size and potential future importance (A)</p> Signup and view all the answers

Which of the following is a condition for a segment to be actionable?

<p>Effective programs can be designed to serve the segments (D)</p> Signup and view all the answers

What does the term 'segment structural attractiveness' refer to?

<p>Number of competitors and customer power in the segment (C)</p> Signup and view all the answers

Which of the following best describes the 'target market'?

<p>A set of buyers who share common needs or characteristics (D)</p> Signup and view all the answers

What is the role of 'purchasing criteria' in market segmentation?

<p>To assess product quality, price, and service (C)</p> Signup and view all the answers

What is the primary purpose of market segmentation?

<p>To divide a market into more manageable, distinct segments (A)</p> Signup and view all the answers

Which of the following is NOT a common basis for segmenting consumer markets?

<p>Competitive (C)</p> Signup and view all the answers

Which example illustrates geographic segmentation?

<p>Targeting specific neighborhoods for a product (A)</p> Signup and view all the answers

What type of segmentation involves grouping consumers based on their income and education levels?

<p>Demographic (C)</p> Signup and view all the answers

Which of the following is an example of behavioral segmentation?

<p>Identifying non-users and regular users of a product (A)</p> Signup and view all the answers

What is a key benefit of effective market segmentation?

<p>It allows for more efficient and effective marketing strategies (A)</p> Signup and view all the answers

Which factor is least likely to be considered in psychographic segmentation?

<p>Field of employment (A)</p> Signup and view all the answers

Which segmentation strategy might a company use to understand the buying behavior of different age groups?

<p>Demographic segmentation (A)</p> Signup and view all the answers

What is a key disadvantage of undifferentiated marketing?

<p>It can lead to less competitiveness against focused firms. (B)</p> Signup and view all the answers

Which targeting strategy is best suited for companies with limited resources?

<p>Concentrated marketing (B)</p> Signup and view all the answers

Under what market condition is undifferentiated marketing most appropriate?

<p>When consumer needs are uniform. (A)</p> Signup and view all the answers

What does micromarketing focus on?

<p>Specific needs of small groups or individuals. (D)</p> Signup and view all the answers

What is a scenario where differentiated marketing is most beneficial?

<p>When products in the market have high variability. (C)</p> Signup and view all the answers

Why is concentrated marketing often viable for niche markets?

<p>It focuses on fulfilling specific consumer needs. (C)</p> Signup and view all the answers

What is a primary benefit of differentiation in branding?

<p>It helps brands stand out from competitors. (C)</p> Signup and view all the answers

Which of the following factors influences the choice of a targeting strategy?

<p>Product life cycle stage. (C)</p> Signup and view all the answers

What is the worst situation for a brand in terms of market competition?

<p>Perfect competition with many buyers and sellers (C)</p> Signup and view all the answers

What does product positioning refer to?

<p>The way the product is defined by consumers at important attributes (B)</p> Signup and view all the answers

Which of the following is NOT a characteristic of effective competitive advantages?

<p>Easily imitated (C)</p> Signup and view all the answers

What does the term 'Unique Selling Proposition' imply?

<p>A single characteristic that differentiates the brand (D)</p> Signup and view all the answers

Which market positioning strategy involves offering a basic product at a very low price?

<p>Less for much less (C)</p> Signup and view all the answers

What is a key principle of becoming a luxury brand over time?

<p>Building tradition and heritage (D)</p> Signup and view all the answers

Which positioning strategy is exemplified by Lexus, according to the content?

<p>More for the same (D)</p> Signup and view all the answers

What is the main element required for a successful positioning statement?

<p>Clear target segment and point of difference (A)</p> Signup and view all the answers

Flashcards

Market Segmentation

Dividing a large market into smaller groups with unique needs, characteristics, or behavior that require different marketing approaches.

Geographic Segmentation

Targeting customers based on their location, such as countries, regions, cities, or neighborhoods.

Demographic Segmentation

Grouping customers by factors like age, gender, family size, income, occupation, education, or religion.

Psychographic Segmentation

Categorizing customers based on their social class, lifestyle, or personality traits.

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Behavioral Segmentation

Grouping customers based on their knowledge, attitudes, usage, or responses to a product.

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Segmentation Strategy

Targeting different subgroups of customers with tailored marketing strategies and product offerings.

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Positioning

The process of creating a clear and compelling image of your product or service in the minds of your target customers.

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Brand Positioning

A distinct and memorable position for your brand in the market that differentiates it from competitors and appeals to your target audience.

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Undifferentiated Marketing

Focusing on what is common amongst consumers and targeting the entire market with a single marketing mix.

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Differentiated Marketing

Identifying and serving several market segments with different needs and wants using multiple marketing plans, research, and brand strategies.

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Concentrated Marketing

Focuses on a specific, small, and well-defined market segment with unique needs.

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Micromarketing

Tailoring offers to individual customers and locations.

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Trade-off in Market Segmentation

The trade-off between economies of scale (cost savings with large production) and value creation (meeting specific customer needs).

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Value Creation through Segmentation

Creating value by targeting and segmenting the market, instead of addressing every buyer as an individual.

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Choosing a Targeting Strategy

Choosing a targeting strategy based on company resources, product variability, product life cycle, market variability and competitor strategies.

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Purpose of Branding

Brands exist to differentiate themselves from competitors, creating unique value propositions.

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Product Position

The way consumers perceive a product based on its key attributes, relative to competitors.

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Brand Meaning

A brand is only what it means to consumers, compared to competitors.

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Sources of Differentiation

Identifying factors that make your brand stand out (product, service, distribution, staff, image).

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Competitive Advantages

Choosing the best competitive advantage, focusing on what makes your brand truly special.

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Positioning Statement

Positioning your brand with a distinct proposition compared to competitors.

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Less for much less

Targeting customers seeking the lowest price, even if the product is basic.

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The same for less

Providing the same product or service as competitors, but at a lower price.

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More for less

Offering more features or quality at a lower price compared to premium brands.

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Target market

A group of customers with similar needs or characteristics that a company decides to focus on.

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Operating variable segmentation

A division of a market based on factors like technology used, customer capabilities, or user/non-user status.

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Purchasing approach segmentation

A division of a market based on factors like purchase criteria (price, quality, service), purchasing policies, or existing supplier relationships.

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Personal characteristic segmentation

A division of a market based on factors like loyalty to suppliers, buyer-seller similarities, and attitude towards risk.

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Situational factor segmentation

A division of a market based on factors like urgency of demand, size of order, or purchase situation.

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Niche marketing

A segmentation strategy where a company focuses on a specific group of customers within a larger market, often with customized marketing efforts.

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Study Notes

Segmentation and Positioning

  • Difficult to serve a whole market due to numerous, varied, and dispersed buyers
  • Companies must identify profitable segments
  • Segmentation: dividing a market into smaller segments with distinct needs, characteristics, or behaviors requiring separate marketing strategies
  • Segmentation Variables:
    • Geographic (nations, regions, cities)
    • Demographic (age, gender, family, income, occupation, lifestyle, etc.)
    • Psychographic (social class, lifestyle, personality)
    • Behavioral (usage rate, loyalty, buying attitudes)
    • Business markets (industry, company size, location, purchasing approaches)

Market Targeting

  • Target market: set of buyers with shared needs the company decides to serve
  • Evaluate segments for size, growth, structural attractiveness, and alignment with company objectives and resources
  • Strategies:
    • Undifferentiated (mass marketing): targeting the whole market with one offer
    • Differentiated (segmented marketing): targeting different segments with different offers
    • Concentrated (niche marketing): focusing on one or a few segments
    • Micromarketing: tailoring offers to specific individuals or locations

Differentiation and Positioning

  • Brands differentiate themselves
  • Differentiation: creating real or perceived differences in products or services, to make them stand out from competitors.
  • Positioning: the way consumers perceive a brand's offering compared to competitors' offerings. It is how consumers define brands by considering attributes, beliefs, and ideas.
  • Product Positioning: way consumers define products in terms of attributes and relationships to competing products.
  • Differentiation Steps:
    • Identify sources of differentiation
    • Choose the right competitive advantage
    • Select an overall positioning strategy
  • Developing a positioning statement: To (target segment and need) our (brand) is (concept) that (point of difference).

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Related Documents

Unit 5: Segmentation and Positioning PDF

Description

This quiz explores the key concepts of market segmentation and targeting. It covers the various segmentation variables and strategies that companies can adopt to effectively serve distinct market segments. Test your knowledge on how to identify profitable segments and evaluate target markets.

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