Strategic Marketing U5: Segmentation & Positioning

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Questions and Answers

Which of the following variables is NOT a primary segmentation variable for business markets?

Personal characteristics

Behavioral patterns (correct)

Demographics

Operating variables

What type of segmentation focuses on dividing buyers based on their social class, lifestyle, and personality characteristics?

Demographic segmentation

Psychographic segmentation (correct)

Behavioral segmentation

Geographic segmentation

Which of the following factors is considered a situational variable in business market segmentation?

Company size

Buyer seller similarities

Technology

Urgency of demand (correct)

What characteristic distinguishes a target market?

Buyers who share common needs or characteristics Signup and view all the answers

In behavioral segmentation, which of the following describes 'user status'?

Identification as a first-time user, regular user, or ex-user Signup and view all the answers

Which of the following is NOT a requirement for effective segmentation?

Homogeneous Signup and view all the answers

Which option describes the 'nature of existing relationships' in business market segmentation?

Current supplier relationships Signup and view all the answers

What is the focus of behavioral segmentation?

Consumer knowledge, attitudes, and usage patterns Signup and view all the answers

What is a key characteristic of undifferentiated marketing?

Offering the same product to the entire market Signup and view all the answers

Why is differentiated marketing advantageous?

It caters to the distinct needs of various segments Signup and view all the answers

What is a major challenge of undifferentiated marketing?

Difficulty in competing with niche-focused firms Signup and view all the answers

What is a common feature of concentrated marketing?

Focusing on specific needs of a single market segment Signup and view all the answers

What distinguishes micromarketing from other types of market targeting?

It tailors offers to individuals and locations Signup and view all the answers

What trade-off is considered when selecting market segments?

Economies of scale versus value creation Signup and view all the answers

What is the primary benefit of differentiated marketing over undifferentiated marketing?

It can address varied consumer preferences more effectively Signup and view all the answers

Which marketing strategy is best suited for a company with limited resources looking to target a niche market?

Concentrated marketing Signup and view all the answers

Which of the following is NOT considered a source of differentiation?

Market Competition Signup and view all the answers

Which competitive advantage is characterized by being 'not easy to copy'?

Unique Selling Proposition Signup and view all the answers

What is the primary purpose of a positioning statement?

To clarify the brand's target segment and point of difference Signup and view all the answers

Which of the following should be considered when choosing competitive advantages?

If they are easily replicated Signup and view all the answers

In developing a positioning statement, which element is included to specify the target audience?

Target segment and need Signup and view all the answers

What is individual marketing also known as?

One-To-One Marketing Signup and view all the answers

Which factor primarily influences the choice of a targeting strategy when resources are low?

Concentrated strategy Signup and view all the answers

What does the product's life-cycle suggest for undifferentiation?

Undifferentiation during introduction Signup and view all the answers

What defines a product's position in the market?

The way it is defined by consumers on important attributes Signup and view all the answers

What can be a consequence of adopting an undifferentiated strategy in a competitive market?

Risk of being outperformed Signup and view all the answers

What is the primary purpose of market segmentation?

To identify distinct buyer needs Signup and view all the answers

Which of the following is NOT a type of market segmentation mentioned?

Functional segmentation Signup and view all the answers

Geographic segmentation can be defined as dividing the market based on which criterion?

Physical locations Signup and view all the answers

Why is dividing a market into segments considered beneficial?

It leads to more efficient and effective marketing practices. Signup and view all the answers

Which of the following examples is indicative of demographic segmentation?

Marketing products based on age and family size Signup and view all the answers

What characterizes the buying attitudes of consumers in market segmentation?

Their historical purchasing behavior Signup and view all the answers

In which market segmentation method would 'One Stop' store strategies likely align?

Geographic segmentation Signup and view all the answers

Which of the following best illustrates the concept of heterogeneity in a market?

Grouping consumers with varied needs and preferences Signup and view all the answers

Study Notes

Strategic Marketing - U5 - Segmentation and Positioning

Introduction:
- Difficult to serve an entire market.
- Buyers may be numerous, scattered, and varied in their needs/buying practices.
- Companies must select segments they can best serve profitably.
Market Segmentation (5.1):
- Dividing a market into smaller segments with distinct needs, characteristics or behaviors.
- Requires specific marketing strategies/mixes.
- Consumer differences include: wants, resources, locations, buying attitudes, buying practices.
- Market segmentation helps divide large, heterogeneous markets more effectively and efficiently.
Consumer Markets (5.1):
- Geographic: divides into nations, regions, cities, neighborhoods.
  - Examples: Tesco Metro (city centers, small towns), Tesco Express (neighborhood convenience stores), One Stop (small stores).
- Demographic: divides by age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, nationality.
  - Examples: Oral B (age/life-cycle stage), L'Oreal (gender), American Express (income).
- Psychographic: divides by social class, lifestyle, personality characteristics.
- Behavioral: divides by knowledge, attitudes, uses, or responses to a product.
  - Examples: Occasions (Samsonite), User status (non-users, ex-users), Usage rate (light, medium, heavy), Loyalty status (high, medium, low).
Business Markets (5.1):
- Demographics: include industry, company size, location.
- Operating variables: include technology used, user/non-user status, customer capabilities.
- Purchasing approaches: include nature of existing relationships, general purchase policies, purchasing criteria.
- Personal characteristics: include loyalty to suppliers, buyer-seller similarities, attitudes toward risk, situational factors (urgency of demand, size of order).

Market Targeting (5.2)

Target Market: a set of buyers who share common needs/characteristics the company chooses to serve.
Evaluating Market Segments:
- Consider segment size and growth, structural attractiveness, and company objectives/resources.
Selecting Market Segments
- Undifferentiated: targets the whole market with one offer (economies of scale).
- Differentiated: targets different segments with different products (greater financial risk).
- Concentrated: targets one or more small segments with tailored products (best suited for companies with limited resources).
- Micromarketing: targets individuals or local groups with tailored products (e.g., local marketing, individual marketing).

Differentiation and Positioning (5.3)

Product Positioning: the way the product is defined by consumers based on important attributes and the place it occupies in consumers' minds relative to competitors.
- "Products are created in the factory. Brands are created in the mind."
Positioning Map: a graphical representation of consumer perceptions of competing products, helpful in market research.
Differentiation: identifying sources of difference: product, services, channels, people, image.
Competitive Advantages: choosing the right advantageous differences.
- Key elements are importance, distinctiveness, superiority, communicability, and cost, profitability and sustainability.
Positioning Strategy: Selecting overall strategy (e.g., price/benefits).
Developing a Positioning Statement: A short, clear statement of the brand's position in the market (Example given of Blackberry).

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Description

This quiz focuses on Unit 5 of Strategic Marketing, discussing the concepts of market segmentation and positioning. It covers the importance of identifying distinct market segments based on geographical and demographic factors. Test your understanding of how companies can effectively serve diverse customer needs to maximize profitability.