Business 102: Principles of Marketing Ch 7. Segmentation and Product Marketing

Market

people or organizations who have the ability to purchase a product or service

Market Segment

a subgroup of people or organizations that have one or more characteristics in common that cause them to have the same product needs

Market Segmentation

divide a market into similar and identifiable segments

No Market Segmentation

target everyone

Fully Segmented Market

target based on every individual factor available

Measurability, Substantiality,

• examine potential segments

• determine if these segments are worthy of spending money for marketing

What is the name of a segmentation criteria where a segment must be large enough to support developing a specific marketing mix?

1. Segmentation

2. Accessibility

3. Responsiveness

4. Measurability

5. Substantiality

Substantiality

If a company decides to pursue a senior citizen segment of the market and has difficulty creating a marketing mix that will reach this type of segment, this is an example of what type of criteria?

1. Accessibility

2. Measurability

3. Substantiality

4. Identifiability

5. Responsiveness

Accessibility

Which of the following is the best definition for a market segment ?

1. The place where a product/service is offered for sale

2. A subgroup of people or organizations that have similar characteristics.

3. The way marketers communicate with customers

4. A subgroup of people who will buy the product at a given price.

5. A method for determining the advertising mix.

A subgroup of people or organizations that have similar characteristics.

A company wants to find customers who would be interested in a drug and alcohol prevention residential program. They are having difficulty finding segments to target. What type of criteria issue would they be facing?

1. Identifiability

2. Integration

3. Accessibility

4. Substantiality

5. Responsiveness

Identifiability

Which of the following criteria can be used to segment a market?

1. Gender

2. All of these are correct

3. Ethnicity

4. Age group

5. Income

All of these are correct

Five Different Ways to Segment Consumer Markets

• Geography

• Demographics

• Psychographics

• Benefits sought

• Usage rate

Geographic

break the market into sections by climate, density, market size, world, states, etc

Demographic

Age, income, gender, ethnic background, and family life cycle

Family Life Cycle Segmentation

a series of stages determined by a combination of age, marital status, and number of children in a household

Tweens

between the ages of 9-12

Baby Boomers

people born between the years of 1946-1964

Generation X

• born after the baby boomers

• not loyal to brands and are turned off by most media advertising

Millenials

born from 1981 through 1996, are the emerging young parents who are building families, lives, and net worth

Gen Z

born from 1997 to 2012, may not yet have the income needed to afford the park

Gen A

born from 2013 until 2025 or so, although the endpoint will be defined by outside events and trends

Psychographics

personality, motives, values and lifestyles

behavioral

patterns of behavior displayed by customers

benefits sought

the benefit they get from using the product or service

Usage-Rate

• dividing the customers by how much of the product is used or consumed

• 20 percent of all customers generate 80 percent of the demand for a product or service

Which of the following demographic groups was born between 1946-1964?

1. Baby Boomers

2. Teenagers

3. Tweens

4. Generation X

Baby Boomers

Which of the following segmentation methods is a marketing team using if they segment the market based on examining potential customers' personalities, motives and lifestyles ?

1. Demographic

2. Personal

3. Geographic

4. Psychographic

Psychographic

Which of the following segmentation methods could involve a marketing team for an amusement park using an ad that showcases wild thrill rides for an exciting day out with friends?

1. Income

2. Demographic

3. Geographic

4. Benefits sought

Benefits sought

Age, gender, income, race, and family life cycle all are found in _____ segmentation?

1. Demographic

2. Psychology

3. Psychographic

4. Geographic

Demographic

What are four ways to segment a market?

1. Demographics, psychographics, behavior, and geography

2. Geography, benefits, demographics, and usage-rate

3. Age, income, gender, and personality

4. Usage-rate, psychographics, demographics, and personality

Demographics, psychographics, behavior, and geography

B2B

Business-to-Business Marketing

Business Market

• …where companies sell their products or services to other businesses

• Business markets can also be segmented into easily identifiable areas

Producer

Steel factories that produce materials for auto markers

Resellers

• …buy products to resell them to other businesses

• distributors

• food warehouses

• brokers

Government

• navy yard

• motor vehicle department

• defense contractors

Institutions

• hospitals

• prisons

• churches

• libraries

Company Characteristics

• company size

• product use

• geographic location

• type of company

Buying Processes

type of segmentation based on how the companies buy goods and services

• price

• quality

• service

Satisficers

• business customers who place an order with the first satisfactory supplier

• this type of business customer needs to be contacted quickly in order to get the sale

Optimizers

business customers who research all supplies through bid proposals and then make a careful decision

You want to find an efficient way to segment the business market. Which of the following is NOT an example of how you should segment a market according to company characteristics?

1. Length of time the company has been in business.

2. How large the company you are dealing with is.

3. Where the company is.

4. Which of the products the company you are in business with purchases.

Length of time the company has been in business.

What is a business market?

1. It is when consumers buy from businesses.

2. It is when a business sells to a consumer.

3. It is when a business decreases the amount of money their employees receive but increases the bonuses.

4. It is when a business markets products or services to companies.

It is when a business markets products or services to companies.

James segments his business customers by how much money they spend on his products and services. Which type of segmentation is this?

1. Company Type

2. Geographic Location

3. Company Size

4. Buying Processes

Buying Processes

What are the four broad segments of a business market?

1. Price, product, promotion and place

2. Producers, resellers, government markets and institutions

3. The government, infrastructure, revenue and forecasts

4. Hospitals, schools, churches and libraries

Producers, resellers, government markets and institutions

Robert's company produces gloves. They primarily sell these gloves to prisons and schools. What segment of the market is Robert's company targeting?

1. Institutions

2. The private sector

3. Retailers

4. Low-return investments

Institutions

Position

is the place a product, company, or brand occupies in consumers’ minds relative to the competition’s offerings

Perceptual Mapping

a graphical way of representing two or more dimensions or variables that are represented in consumers’ minds

Reposition

change consumers’ perceptions of their dinner in relation to the competition

A car company has forever been known as offering cheap, reliable cars. The new management group would like the marketing team to change consumer perception of the cars from cheap and reliable to high tech and cool. The marketing team's challenge is called _____.

1. positioning

2. consumer analysis

3. repositioning

4. psychological profiling

5. promotional persuasion

repositioning

What is positioning?

1. When a marketer creates a psychological profile of a product.

2. A process that influences potential consumers' perception of a product.

3. Part of the four Ps of marketing.

4. The spot a product takes up in the marketplace.

5. How the marketer views the product.

A process that influences potential consumers' perception of a product.

When a company uses a strategy to showcase why their product characteristics are superior to the competition, it is called:

1. Product Innovation

2. Product Position

3. Product Differentiation

4. Product Development

5. Product Discover

Product Differentiation

What is a graphical way of representing two or more dimensions or variables that are represented in consumers' minds?

1. Perceptual Mapping

2. Consumer Dynamics

3. Marketing Graph Analysis

4. Psychological Profiling

5. Marketing Graph

Perceptual Mapping

How would a company begin to change consumer perceptions about its products ?

1. By updating the products

2. By locating retail outlets closer to target customers

3. By offering products to all customers at a lower price

4. By identifying key characteristics that are important to the target market.

5. By creating new advertising designed for target customers.

By identifying key characteristics that are important to the target market.

Business Marketing

the marketing of goods and services to individuals and companies for reasons other than personal consumption

Producers

organizations that purchase goods and services to produce other products, to incorporate into other products or to facilitate the daily operation of the company

OEMs

“original equipment manufacturers”

Resellers

buy finished products and then resell them for a profit

Government Offices

• businesses rely heavily on government sales in order to maintain their revenue

• the different segments are country, municipal, state

Institutions

• churches

• libraries

• hospitals

• unions

• clubs

• foundations

Major Equipment

type of business product that includes capital goods, such as large machines, mainframe computers and buildings.

Major Equipment

type of business product that includes capital goods, such as large machines, mainframe computers and buildings

Personal Selling

• very expensive

• custom made

• high-risk purchase

Accessory Equipment

• products that are less expensive, and examples include copy machines or power tools

• the marketing of these types of products consists of a standardized product offering and good business advertising

Raw Materials

• examples of the product include unprocessed or agricultural products, such as corn, fruit, veggies and fish

• the marketing implication of selling raw materials is that there are few suppliers, so price is fixed

Component Parts

consists of finished items or products close to being finished that are used to make other products

Processed Materials

• products used in manufacturing other products but need to undergo some type of processing

• the marketing strategy of selling processed material consists of high quality, price and excellent service

Supplies

these products are usually inexpensive and need to be purchased frequently

• paper towels

• pencils

• paper

Business Services

expensive items that usually do not end up as part of the final product

• consulting

• marketing

• legal

• janitorial

Select the business product an automobile tire would be.

1. A processed material.

2. Major equipment

3. Raw material

4. A component part.

A component part.

What are the four types of business customer categories?

1. Reseller, institution, government, sales

2. Producer, supplier, institution government

3. Producer, reseller, institution, government

4. Producer, consumer, institution, government

Producer, reseller, institution, government

A union would be a(n) _____ business customer category.

1. Institution

2. Government

3. Reseller

4. Producer

Institution

Evaluate the type of business product corn is.

1. A raw material.

2. A business service.

3. A component part.

4. A processed material.

A raw material.

Explain what differentiates a business product from a consumer product.

1. The price of the product.

2. The type of product.

3. The location of the product.

4. The end user.

The end user.

Consumer Product

if the end user of the product is the consumer

Business Product

a product used to manufacture other goods or services to resell

Consumer Product

a product to satisfy individual wants or needs

Product

• follow-up material

• warranties

• packaging

Convenience Products

• a consumer product that takes little thought, is routine, purchased often, appeals to a large target market, and the consumer purchases it with little planning

• convenience products do not require much thought and are almost considered reflex reactions

• convenience products also do not require complicated information-based ads

• convenience stores

• drug stores

• supermarkets

• vending machines

• warehouse clubs

Shopping Products

a product that requires consumer research and comparison of brands

Homogeneous Shopping Products

product perceived by consumers as very similar in nature and the final purchase is usually determined on the lowest price

Heterogeneous Shopping Products

• shopping products that are viewed differently and consumers comparison shop, not just for the lowest price, but for the brand or image that works for them

• distribution for shopping products does not need to be as wide as for convenience products because there is a smaller target market

Specialty Products

• Products where consumers are concerned with the brand image and the quality of their purchases. Consumers do not want substitutes and are brand loyal

• These products are promoted to a small target market through limited distribution channels to add to the exclusiveness of the product

Unsought Products

products the buyer does not actively seek out to purchase

Which strategy would a marketer use to effectively sell unsought products?

1. Less television advertising

2. Aggressive couponing and price markdowns

3. Public relations campaigns

4. An aggressive direct sales force

An aggressive direct sales force

Based on the target end user, a computer is _____ product.

1. a consumer

2. an unsought

3. a business

4. a consumer or business

a consumer or business

Which of the following statements is MOSTLY TRUE of a specialty product?

1. Consumers do not have a brand preference

2. It has wide availability

3. Its price is relatively high

4. It generally has a large target market

Its price is relatively high

Which of the following would be classified as a convenience product?

1. a hairbrush

2. a pair of jeans

3. a Rolex watch

4. life insurance

a hairbrush

A consumer making a purchasing decision between two heterogeneous shopping products will most likely buy the one with _____.

1. the most availability

2. the lowest price

3. both a low price and favorable brand image

4. the best customer service

both a low price and favorable brand image

Product Development

the improvement of existing products or the introduction of new products into a market

Focus Groups

bring a group of customers into their offices and ask them questions about their products

Competitor Product Analysis

take a competitor’s product and bring it into their offices to directly compare it to the product they produce

Surveys

help companies to gather answers to specific questions about their product and the product segment so they can improve their products where needed

Increased Market Share

market share is the amount of the market a specific product has as it relates to units sold

Profitability

the amount of profit, or how profitable a product is, is called profitability

ROI (Return on Investment)

the performance measure used to evaluate the efficiency or attractiveness of an investment

How do focus groups help companies in developing new products?

1. They help determine the prices of their products.

2. They provide relevant and new feedback about their products.

3. They perform research for the company in real world setting.

4. They create surveys for the companies to gather answers to specific questions about their products.

5. They develop the marketing strategies with the company to promote their products.

They provide relevant and new feedback about their products.

Your company wants to ask questions in order to gain some specific answers about the product, such as: 'On a scale of 1 to 10, how would you rate this product?' In order to do so, your company has asked 100 people 20 questions and is assessing the data. Which of the following is this an example of?

1. An interview.

2. A theoretic contribution.

3. A survey.

4. A focus group

5. An expert analysis.

A survey.

How do companies perform competitor product analysis?

1. By matching the price of the competitor's product with theirs.

2. By bringing in a group of people to ask what they think of their product.

3. By taking a competitor's product, and directly comparing to it their product.

4. By reviewing sales figures.

5. By asking their competitor to share their product development secrets with them.

By taking a competitor's product, and directly comparing to it their product.

Which of the following will most likely result in the growth of your company?

1. Increasing the number of your employees from 500 to 600.

2. Lowering the interest rate.

3. Increasing the quality of your product.

4. Increasing your market share from 50% to 60%.

Increasing your market share from 50% to 60%.

Which of the following is an example of product development?

1. Changing how you do business so that you are more consumer orientated.

2. Increasing the quality of the camera on the phone your company sells.

3. Buying new products from another company.

4. Adding only new products to your line.

Increasing the quality of the camera on the phone your company sells.