Principles of Marketing Chapter 5: Market Segmenting, Targeting, and Positioning

Thirty question-and-answer flashcards covering the key concepts of segmentation, targeting, and positioning from Chapter 5 of Principles of Marketing v5.0 by Jeff Tanner and Mary Anne Raymond.

What is the primary difference between targeted (differentiated) marketing and mass (undifferentiated) marketing?

Targeted marketing tailors some aspect of the marketing mix to specific groups of customers, whereas mass marketing offers the same product to everyone without differentiation.

Why has the trend in recent years shifted toward more precise market targeting?

Advances in data collection (e.g., web browsing, social media) and analytics allow firms to identify and serve smaller, more profitable segments efficiently.

List two key benefits firms gain from segmenting and targeting their markets.

(1) Avoiding direct head-on competition by appealing to unique needs. (2) Developing new offerings or remarketing older products to specific segments.

Why is retaining current customers generally more cost-effective than acquiring new ones?

Existing customers are already aware of and engaged with the brand, so less promotional spending is needed to generate repeat purchases compared to attracting unfamiliar prospects.

What is one-to-one marketing?

A process in which firms identify their most valuable customers and customize products, services, and communications to form close, personal relationships with them.

Name the four main types of segmentation bases used in consumer markets.

Behavioral, Demographic, Geographic, and Psychographic.

In behavioral segmentation, what does segmenting by "benefits sought" mean?

Dividing buyers according to the specific value or advantages they want from a product (e.g., convenience, quality, economy).

Give an example of usage-rate segmentation.

Classifying customers as heavy, medium, light, or non-users of a product such as coffee or streaming services.

Why is demographic segmentation so popular among marketers?

Demographic data (age, gender, income, etc.) are widely available in public and commercial databases, making segmentation simpler and more cost-effective.

What is geocoding in geographic segmentation?

Plotting customer or market data on a map to visualize and target geographic clusters.

Define geodemographics.

A segmentation approach that combines geographic and demographic data to profile neighborhoods or micro-areas for marketing purposes.

What is proximity marketing?

Using wireless technologies (e.g., beacons, GPS) to send marketing messages to consumers who are within a few hundred feet of a business location.

Which psychographic tool segments consumers by values, attitudes, and lifestyles and includes categories like Innovators, Thinkers, and Strivers?

The VALS (Values, Attitudes, and Lifestyles) framework.

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

Business markets have fewer customers overall, and business buyers tend to be less fickle and more rational than consumers.

List the four common behavioral segments found in B2B markets.

Price-focused, Quality & Brand-focused, Service-focused, and Partnership-focused segments.

State two criteria a firm should consider when deciding if a market is attractive to target.

(1) Market size and growth potential. (2) Level of competitive saturation and the firm's ability to differentiate.

What is multisegment marketing?

A strategy in which a firm tailors different offerings to two or more distinct market segments.

Why can multisegment marketing help a company weather an economic downturn?

It allows customers to trade up or down among the firm's brands, keeping them within the company’s portfolio even as budgets change.

What is the key risk associated with concentrated (niche) marketing?

The firm places all its resources in one narrow segment, making it vulnerable if that segment declines or competitors enter.

Define microtargeting (narrowcasting).

Using detailed data (e.g., tax records, online behavior) to craft highly personalized messages for very small or individual customer segments.

When targeting global markets, what are two broad strategic options a firm can choose?

(1) Sell the same product worldwide (mass global marketing). (2) Adapt or tailor offerings to meet regional or country-specific needs (targeted global marketing).

What is positioning in marketing?

The process of shaping how consumers perceive a product relative to competing offerings.

How does a perceptual map assist marketers?

It visually displays consumer perceptions of brands on key attributes, revealing gaps or opportunities for repositioning.

What is a tagline, and give an example of its purpose.

A short, memorable phrase that sums up a product’s essence; it reinforces the brand’s desired position (e.g., Nike’s “Just Do It”).

Define repositioning.

Altering a product's position in consumers’ minds to gain a new or broader audience, often through changes in messaging, design, or target segment.

Give an example of a successful repositioning mentioned in the lecture notes.

Old Spice transformed from a dated after-shave brand to a top-selling deodorant popular with millennials and Gen Z.

What does the acronym STP stand for in marketing?

Segmentation, Targeting, and Positioning.

Which step of one-to-one marketing focuses on determining which customers are most and least valuable?

Differentiate among your customers.

In one-to-one marketing, why are short-term measures such as revenues or transactions important?

They provide feedback on whether customized marketing efforts are achieving desired financial or behavioral outcomes.

Why are firms increasingly interested in emerging markets such as China, India, and Brazil?

These countries have rapidly growing middle classes, offering large, profitable market opportunities for many product categories.