MK 4

target segmentation selection

1. set objective/strategy

2. select key segmentation variables

3. create segmentation tree and grid

4. evaluate segment attractiveness

5. select target market

6. identify and develop positioning

set objective/strategy

informed by SWOT

select key segmentation variables

determine relevant characteristics

create segmentation tree and grid

estimate size, reachability of segments

evaluate segment attractiveness

assess segment potential

select target market

identify segment of focus

identify and develop positioning

establish value proposition

bases for segmentation

who- geographic, demographic

what- behavior

why- benefits, psychographic

who- geographic, demographic

location

age

income

education

profession

industry

marital status

what- behavior

usage

loyalty

deal proneness

responsiveness to marketing mix

why- benefits, psychographic

needs

preferences

decision processes

lifestyles

personality

social networks

types of targeting

undifferentiated/mass

differentiated/multimarket

concentrated

micromarketing

undifferentiated/mass targeting

no differentiation among segments

differentiated/multimarket

multiple segments simultaneously- design different products to meet the needs of different segments (sports cars, minivans, SUVs, etc.)

concentrated

single segment- small firm or firms with a unique product ie. porsche, ferrari

micromarketing

custom, one-to-one

positioning

set of strategies used to ensure that an offering occupies a distinct and valued place in the minds of the target segment

“how does my offering deliver value to my target customer better than the competition?”

perceptual map

shows positioning of product relative to competition in target segment’s mind

When evaluating the attractiveness of the segment, if a segment is expected to react positively to the firm’s offering, we say that the segment is

1. Option A

   reactive

2. Option B

   responsive

3. Option C

   substantial

4. Option D

   reachable

5. Option E

   identifiable

B. For a segmentation strategy to be successful, the customers in the segment must react similarly and positively to the firm’s offering. This is referred to as a responsive segment.

What would be used in calculating the profitability of a segment?

1. Option A

   segment size

2. Option B

   geographic segmentation

3. Option C

   product positioning

4. Option D

   demographics

5. Option E

   segment perceptions

A. A calculation of segment profitability uses segment size, estimated segment adoption percentage, purchase behavior (frequency and price), profit margin percentage, and fixed costs.

Marketers often employ a combination of segmentation methods, using________ to identify and target their customers, and________ to design products and messages to appeal to them.

1. Option A

   undifferentiated targeting; differentiated targeting

2. Option B

   lifestyle segmentation; geographic segmentation

3. Option C

   loyalty segmentation; demographics

4. Option D

   demographics and geography; lifestyle or benefit segmentation

5. Option E

   loyalty segmentation; geodemographics

D. Knowing what benefits customers are seeking or how the product or service fits a particular lifestyle is important for designing an overall marketing strategy, but such segmentation schemes present a problem for marketers attempting to identify specifically which customers are seeking these benefits. Firms often employ a combination of segmentation methods, using demographics and geography to identify and target marketing communications to their customers, then using benefits or lifestyles to design the product or service and the substance of the marketing message.

What is a key element of a value proposition statement?

1. Option A

   the ability to the mass market

2. Option B

   the financial state of the company

3. Option C

   the target market

4. Option D

   the price of the product or service being offered

5. Option E

   the location of the company headquarters

C. The value proposition statement consists of a target market, an offering or brand name, a product or service category or concept, and the unique point of difference or benefits.

Psychographics is the segmentation method that delves into how consumers

1. Option A

   describe themselves.

2. Option B

   allocate scarce incomes to a variety of goods and services.

3. Option C

   value their livelihoods.

4. Option D

   adjust to demographic changes.

5. Option E

   believe other people see them.

A. Psychographic segmentation is the one that delves into how consumers actually describe themselves. Usually marketers determine (through demographics, buying patterns, or usage) into which segment an individual consumer falls.