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Questions and Answers
What is the main goal of positioning in marketing?
Why is it important for positioning statements to highlight unique and meaningful benefits?
What should marketers consider when choosing which market segments to target?
What is cannibalization in the context of product marketing?
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How is the '80/20 Rule' related to market segmentation in marketing?
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Which statement accurately describes the concept of a market?
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What is the purpose of market segmentation?
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Which statement is true regarding the sequence of segmentation, targeting, and positioning?
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Which statement best explains the concept of customer lifetime value?
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Which scenario illustrates effective positioning of a product?
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What is an incorrect statement about targeting market segments?
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Which statement is false regarding perceptual maps?
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What is an erroneous assumption about positioning products?
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Which statement about market segmentation is true?
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Which factor is considered a demographic variable for market segmentation?
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What is a primary reason for dividing markets into segments?
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Which option best describes an incorrect approach to market segmentation?
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Which statement about psychographic factors in segmentation is false?
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What should a marketer strive for when segmenting a market?
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Which is a true statement regarding B2B and consumer market segmentation?
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What is an essential characteristic of effective market segments?
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Study Notes
Market Segmentation
- Demographic factors are not always the best way to segment consumer markets.
- Psychographic/lifestyle factors are not always the best way to segment consumer markets.
- Psychographic/lifestyle factors are more applicable to segmenting consumer markets than B2B/Organizational markets.
- The best variable to segment a market is the one that most accounts for the heterogeneity of buyer needs, wants, and expectations.
- Demographic factors used to segment markets include age, income, occupation, marital status, and socioeconomic status.
- Demographic factors are less effectively used to segment B2B markets than consumer markets.
- Markets should be segmented so that potential buyers within each segment have similar needs, wants, and expectations.
- Segmentation is necessary because markets tend to be highly heterogeneous in terms of buyer needs, wants, and expectations.
- An initial goal of market segmentation is to break the heterogeneous market into homogeneous segments.
- Marketers need to produce multiple different products for members of a market segment that have highly homogenous needs, wants, and expectations for the product.
- A market is best defined as a group of customers that have similar needs, wants, and expectations for a given product.
- The “target market” for a product is the segment (or segments) of the market that the marketers focuses on with its marketing strategy.
- Marketers should target more than one segment of the market.
- The best segment to target is not necessarily the one with the highest sales/revenue potential.
- Segmentation should occur before targeting.
- Targeting should take place before positioning.
- Positioning should not be done before market segmentation.
Positioning
- The main goal of positioning is to have members of the target market perceive your product to possess and deliver unique and meaningful benefits to them.
- The concept of “positioning” suggests that a relatively small number of high usage rate consumers account for a disproportionately large percentage of overall product purchases and consumption of most products.
- "Customer lifetime value" suggests that customers should be viewed in terms of their potential financial value over the course of the relationship with the marketer rather than on a one-time transactional basis.
- “Perceptual maps” are most typically used to position or re-position products.
- Products should be positioned in “head-to-head” fashion.
- The highest “customer lifetime value” will be seen with high usage rate customers that are loyal to the marketer for long periods of time.
- The main goal of POSITIONING IS NOT to break the heterogeneous market into homogeneous segments.
- Positioning statements should be formulated to have members of the target market perceive your product to possess and deliver unique and meaningful benefits to them.
Target Market
- A marketer should consider the cost of reaching, marketing to, and serving the people or organizations in a given segment when choosing a target market.
- A marketer should consider the level of competition faced or high cost of serving a large, high usage rate segment of the market.
- Marketers should not engage in segmentation and targeting with the goal of "cannibalizing" sales of existing products.
- "Cannibalization" occurs when sales for a new product designed to cater to a new customer segment instead more significantly takes sales away from existing products.
- The main goal of "positioning” is NOT to convince all members of the market that they have highly similar needs, wants, and expectations.
- The concept of "customer lifetime value" is consistent with the practice of relationship marketing.
- The "80/20 Rule" is closely related to the segmentation variable of "usage rate".
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Description
This quiz covers the key concepts of market segmentation, focusing on demographic and psychographic factors. It discusses their effectiveness in both consumer and B2B markets and highlights the importance of understanding buyer needs and expectations. Test your knowledge on how to effectively segment markets for better targeting.