CH 8 STUDY GUIDE Market Segmentation

A comprehensive set of vocabulary flashcards focused on key terms and definitions related to market segmentation, preparing students for their exam.

Market segmentation

Dividing a large market into smaller groups with similar wants and needs.

Market segments

Smaller groups identified through market segmentation.

Benefits of market segmentation

Helps marketers reach the right audience, improves efficiency, and increases profits.

Target segments

The specific market segments that a company decides to serve.

Marketing mix

The combination of product, price, promotion, and place to meet the needs of target segments.

Product

The goods or services offered to meet consumer needs.

Price

The amount charged for a product or service.

Promotion

Messaging strategies to communicate with target markets.

Place (distribution)

The methods and locations used to deliver products to consumers.

Vehicle market segmentation example

Car companies offer different models like trucks, SUVs, and sedans to meet diverse consumer needs.

Segmentation purpose

To give consumers exactly what they want, utilize resources efficiently, and achieve higher profitability.

Segmentation Process Step 1

Choose a market to study.

Segmentation Process Step 2

Gather data through surveys to understand consumer preferences.

Segmentation Process Step 3

Input data into software for analysis.

Segmentation Process Step 4

Identify clusters of consumers with shared needs.

Segmentation Process Step 5

Analyze clusters based on demographics, income, and shopping habits.

Segmentation Process Step 6

Select the most viable clusters as target segments.

Survey group for refrigerators

U.S. households including both owners and renters.

Geographic segmentation

Dividing the market based on location.

Demographic segmentation

Dividing the market by age, gender, income, and family life cycle.

Psychographic segmentation

Dividing the market based on values, lifestyles, and attitudes.

Behavioral segmentation

Divides consumers based on their behavior towards a product.

Benefits sought in behavioral segmentation

Focuses on the problems solved and benefits expected from a product.

Usage rate in behavioral segmentation

Groups consumers by how frequently they use a product.

Marketing to heavy users

Strategies aimed at consumers who frequently purchase a product.

Carl’s Jr. case study

Marketing targeted to young men aged 18–34 who are heavy eaters.

Psychographic segmentation focus

Understanding why people buy rather than just who they are.

Values and Lifestyles (VALS) Framework

A psychographic segmentation tool developed by Arnold Mitchell.

Innovators in VALS

Consumer group with the highest income and most actualized personalities.

Survivors in VALS

Consumer group characterized by the lowest income and cautious behavior.

Application of VALS

Helps marketers understand consumer motivations and refine strategies.

Family life cycle segmentation categories

Young single, young couples, young families, families with older children, empty nesters, retired seniors.

Criteria for choosing segments: Sustainability

Assessment of whether a segment will remain relevant long-term.

Criteria for choosing segments: Accessibility

Determining if the segment can be effectively reached.

Criteria for choosing segments: Differentiable

Evaluating if segments respond differently to marketing strategies.

Criteria for choosing segments: Actionable

Assessing if the company has resources to target segments.

Entertainment spending example

Analysis of family and demographic habits in entertainment spending.

Consumer lifestyle factors

Attributes considered in segment evaluation, including social behaviors.

Snack crackers segmentation findings

Identified nutritional snackers, weight watchers, and guilty snackers.

Nutritional Snackers market share

22% of the market focusing on healthy options.

Guilty Snackers market share

A heavy user segment making up 9% of the market.

Multiple segment targeting

Strategies allowing brands to appeal to various segments by adjusting messaging.

Cluster analysis in segmentation

Identifying consumer groups with shared preferences for effective targeting.

Demographic evaluation focus

Analyzing income, shopping habits, and demographic information.