Chapter 5: Market Segmenting, Targeting, and Positioning

These flashcards review key concepts from Chapter 5, covering market segmentation, targeting strategies, positioning, and relevant tools and criteria used by marketers.

What is market segmentation in marketing?

Dividing people or organizations into groups of potential buyers with similar characteristics.

What is targeted (differentiated) marketing?

Selecting specific market segments to pursue with tailored marketing mixes.

What is mass (undifferentiated) marketing?

Selling the same product to everyone without tailoring the marketing mix.

Name two key reasons firms moved from mass marketing to targeted marketing.

1) Increased consumer diversity and varied needs, 2) Ability to collect detailed data and tailor offerings.

List three benefits of segmenting and targeting markets.

Avoid head-on competition, develop new offerings, focus on most profitable customers (others include remarket older products, identify early adopters, retain at-risk customers).

Why do companies differentiate among their customers?

To allocate resources to the most valuable customers and better meet differing needs.

Define one-to-one marketing.

A process where firms identify, differentiate, interact with, and customize offerings for their most valuable customers.

What are the four major categories of segmentation bases for consumer markets?

Behavioral, demographic, geographic, and psychographic.

Behavioral segmentation focuses on what two main questions?

1) What benefits do customers want? 2) How do they use the product?

Give two common variables used in demographic segmentation.

Age and income (others include gender, ethnicity, education, family size, occupation, religion).

What is geocoding in marketing?

Plotting geographic marketing information on a map to locate customers.

Define geodemographics.

Combining demographic and geographic data to segment markets, often at neighborhood level.

What is proximity marketing?

Using wireless technology to target buyers geographically within a few hundred feet of a business.

Psychographic segmentation seeks information about which customer aspects?

Activities, interests, opinions, attitudes, values, and lifestyles.

What does VALS stand for and measure?

Values, Attitudes, and Lifestyles; it classifies consumers into psychographic types.

Name two VALS types and a key trait of each.

Innovators—successful and sophisticated; Strivers—trendy and seek approval.

Why are there fewer behavioral segments in B2B markets than in B2C?

Business markets have fewer customers and businesses change needs less frequently than consumers.

List the four common behavioral segments in B2B markets.

Price-focused, quality/brand-focused, service-focused, partnership-focused.

State one criterion that makes a market attractive to target.

The market is large enough to be profitable (others: growing, accessible, not saturated, fits mission, firm has resources).

Why can mass marketing make a firm vulnerable to competition?

Competitors can tailor offerings to specific needs the mass marketer ignores.

What is multisegment marketing?

Tailoring offerings to meet the needs of two or more distinct market segments.

Give one advantage of multisegment marketing.

Reduced vulnerability to competition by spreading risk across segments (others: ability to adjust to demographic trends, cushion during downturns).

Define concentrated marketing.

Targeting a very select or single segment with all marketing efforts.

What is niche marketing?

Focusing on an even more narrowly defined segment, often with specialized needs (e.g., left-handed consumers).

Explain microtargeting (narrowcasting).

Collecting extensive data on individuals to create highly personalized marketing communications.

Name two targeting strategies firms may use in global markets.

Mass (undifferentiated) marketing and multisegment marketing (others: niche, concentrated, one-to-one, microtargeting).

What is positioning in marketing?

Creating a distinctive image of a product in consumers’ minds relative to competitors.

What tool visually displays how consumers perceive brands on key attributes?

A perceptual map.

Define a tagline.

A short, memorable phrase that sums up a product’s essence.

What is repositioning?

An effort to move a product to a new position in consumers’ minds, often to attract a new segment.

Provide an example of successful repositioning mentioned in the notes.

Old Spice shifting from an outdated brand to a top deodorant popular with millennials and Gen Z.

Why is retaining current customers often preferable to acquiring new ones?

It is generally less difficult and costly than finding and attracting new customers.

List the five one-to-one marketing steps in order.

Identify customers, differentiate among them, interact with best ones, customize products/messages, establish short-term measures to evaluate efforts.

What is the first question firms ask when evaluating whether to enter a market?

Is the market large enough to be profitable?

Why might a company deliberately “un-target” certain customers?

Some customers are unprofitable and cost more to serve than the revenue they generate.

How can social media aid in market targeting?

By tracking browsing patterns, conducting surveys, and fostering ongoing relationships for segmentation and retention.