MKTG 3340 Exam 2
Market Segmentation - Answers -aggregate consumers into groups (segments) that
have similar needs and will react similarly to a marketing action
Segmentation Strategies - Answers -- 1 product w/ multiple target segments (Johnson
shampoo for dogs or babies, tums for calcium or antacid)
- multiple products/ multiple segments (utility mini van vs. excitement sports car)
- mass customization (dell built to order laptop)
Criteria for effective market segmentation - Answers -1. similarity of needs of potential
buyers w/in a segment
2. difference of needs of potential buyers among segments
3. simplicity and cost of assigning potential buyers to segments
4. segment must have enough potential for increased profit and ROI
5. feasibility of reaching a chosen segment w/ a particular marketing action
Variables for market segmentation - Answers -* marketers often use more than 1 of
these variables in segmentation (MULTIVARIABLE SEGMENTATION)
1. Geography
2. Psychographics- how we live our lives
3. Usage/ Commitment Patterns (Behavioral)- how much we use a product/service
4. Benefits (Behavioral)- tumbler keeps water cold
5. Demographics
Demographic Segmentation - Answers -* most used
- Age (or head of household)- can't use in some cultures w/ multigenerational homes
(dog food, puppy chow, active dos, senior dog)
- Gender (Faith Popcorn says that the future society will be genderless; deodorant
advertised by sex)
- Family Size
- Marital Status
- Income (Rolex vs. timex)
- Education
- Occupation
Geographic Segmentation - Answers -- Country
- Region (ex. raid segmented country by bugs indigenous to that area)
- City vs. Rural ( food manufacturers; Olive Garden found ppl in n.e. like smooth sauce;
some areas like more spice)
,- Climate (ex. subaru popular in mountains b/c 4 wheel drive; trying to penetrate new
markets)
- Population Density
Psychographics Segmentation - Answers ---> understanding consumer activities,
interest, opinions; deals with personality
Lifestyle segmentation provides insight into CONSUMER'S MOTIVATIONS
- often used w/ demographics
- seeing multi-tasking rise in pop (ex. supermarket w/ starbucks & atm)
-Lifestyle impacted by Activites, Interests, Opinions(lexus- sophisticated, patagonia-
sustainable)
Usage/Commitment Patterns (Behavioral Segmentation) - Answers -1. Usage
- heavy/medium/light users (80/20 RUlE--> 20% of consumers make up 80%
sales/complaints, etc; season tix, 87% beer consumer by heavy users "miller light-tastes
great, less filling", "Schaefer- the one beer to have when your'e having more than 1")
- Nonusers
2. Commitment
- Brand-Loyal Users (keep coming back; starbucks)
- Switchers/Variety Seekers (hard to keep b/c switch a lot (get bored); influenced by
price & mktg activities)
- Emergent Consumers (gradual influx of 1st time buyers; having baby- strollers,
diapers; 1st job- apparel, desk supplies; college- dorm stuff, laptop)
Benefits (Behavioral Segmentation) - Answers -* one of the MOST POWERFUL b/c hits
in your gut
* often combine w/ demographics, lifestyle, usage
What consumers value; often focus on results of using product/service (prestige?
passenger? safety?)
Target Market - Answers -- a specific group of potential consumers to direct marketing
actions; b/c a firm can't satisfy all consumers' needs
- may select more than 1 target market
- packaging, ads, catch phrases
(Coke Zero, Dr. Pepper 10 to young men)
Criteria for selecting target markets - Answers -* where we have highest chance of
success
, 1. Size of segment (relative to size of company (ex. Frito lay only if 60 mil. category;
small co might stay small don't want to be squashed by big co)
2. Expected growth of segment (risk of too many players; ex. streaming, self-driving
cars)
3. Competitive Position (do you have a strong one? protect your position; if competitors
are gaining traction in new area; ex. engineering school now teaching cyber security;
thermos must be able to hold hot & cold b/c yeti can)
4. Compatibility w/ the organization's objectives & resources (Co. DNA; McD's won't go
to find dining)
Positioning - Answers -- The place a product, group of products, and/or brand occupies
in consumers' minds on important attributes relative to competitive products (what
consumers think about your brand relative to control mind of consumers)
- based on substantive brand value (must fulfill customer value prop. ex. Walmart-low
prices)
- memorable and distinctive (simple things accessibly communicated (tagline-just do it;
characters- Flo)
****PRODUCT DIFFERENTIATION
- to test positioning; "when I say___ which brands come to mind? How do they
compare?" All about DIFFERENTIATION (how they compare) ex. cereals (cheerios v.
lucky charms v. fruit loops); ex. banks- harder to differentiate; don't want to become
commodity b/c not perceived as different
Goals of Positioning - Answers --Define the product for consumers (snack vs. meal
bars)
-Help consumers remember the product (w/ certain attributes: trustworthy, reliable,
fresh, non-antibiotic chicken)
-Must communicate product attributes that are relevant to consumers and that
DIFFERENTIATE it from competition (Baine v. BCG; Ralph Lauren v. Vineyard Vines);
don't want to be COMMODITY in price war; can be physical or non-physical (imagery
one has about a product)
**Positioning must be believable & sustainable!!!
Positioning continued - Answers -- Positioning is Perceptual
- what do customers think or feel? (how will a client perceive you)
- PERCEPTION IS REALITY!
Market Segmentation - Answers -aggregate consumers into groups (segments) that
have similar needs and will react similarly to a marketing action
Segmentation Strategies - Answers -- 1 product w/ multiple target segments (Johnson
shampoo for dogs or babies, tums for calcium or antacid)
- multiple products/ multiple segments (utility mini van vs. excitement sports car)
- mass customization (dell built to order laptop)
Criteria for effective market segmentation - Answers -1. similarity of needs of potential
buyers w/in a segment
2. difference of needs of potential buyers among segments
3. simplicity and cost of assigning potential buyers to segments
4. segment must have enough potential for increased profit and ROI
5. feasibility of reaching a chosen segment w/ a particular marketing action
Variables for market segmentation - Answers -* marketers often use more than 1 of
these variables in segmentation (MULTIVARIABLE SEGMENTATION)
1. Geography
2. Psychographics- how we live our lives
3. Usage/ Commitment Patterns (Behavioral)- how much we use a product/service
4. Benefits (Behavioral)- tumbler keeps water cold
5. Demographics
Demographic Segmentation - Answers -* most used
- Age (or head of household)- can't use in some cultures w/ multigenerational homes
(dog food, puppy chow, active dos, senior dog)
- Gender (Faith Popcorn says that the future society will be genderless; deodorant
advertised by sex)
- Family Size
- Marital Status
- Income (Rolex vs. timex)
- Education
- Occupation
Geographic Segmentation - Answers -- Country
- Region (ex. raid segmented country by bugs indigenous to that area)
- City vs. Rural ( food manufacturers; Olive Garden found ppl in n.e. like smooth sauce;
some areas like more spice)
,- Climate (ex. subaru popular in mountains b/c 4 wheel drive; trying to penetrate new
markets)
- Population Density
Psychographics Segmentation - Answers ---> understanding consumer activities,
interest, opinions; deals with personality
Lifestyle segmentation provides insight into CONSUMER'S MOTIVATIONS
- often used w/ demographics
- seeing multi-tasking rise in pop (ex. supermarket w/ starbucks & atm)
-Lifestyle impacted by Activites, Interests, Opinions(lexus- sophisticated, patagonia-
sustainable)
Usage/Commitment Patterns (Behavioral Segmentation) - Answers -1. Usage
- heavy/medium/light users (80/20 RUlE--> 20% of consumers make up 80%
sales/complaints, etc; season tix, 87% beer consumer by heavy users "miller light-tastes
great, less filling", "Schaefer- the one beer to have when your'e having more than 1")
- Nonusers
2. Commitment
- Brand-Loyal Users (keep coming back; starbucks)
- Switchers/Variety Seekers (hard to keep b/c switch a lot (get bored); influenced by
price & mktg activities)
- Emergent Consumers (gradual influx of 1st time buyers; having baby- strollers,
diapers; 1st job- apparel, desk supplies; college- dorm stuff, laptop)
Benefits (Behavioral Segmentation) - Answers -* one of the MOST POWERFUL b/c hits
in your gut
* often combine w/ demographics, lifestyle, usage
What consumers value; often focus on results of using product/service (prestige?
passenger? safety?)
Target Market - Answers -- a specific group of potential consumers to direct marketing
actions; b/c a firm can't satisfy all consumers' needs
- may select more than 1 target market
- packaging, ads, catch phrases
(Coke Zero, Dr. Pepper 10 to young men)
Criteria for selecting target markets - Answers -* where we have highest chance of
success
, 1. Size of segment (relative to size of company (ex. Frito lay only if 60 mil. category;
small co might stay small don't want to be squashed by big co)
2. Expected growth of segment (risk of too many players; ex. streaming, self-driving
cars)
3. Competitive Position (do you have a strong one? protect your position; if competitors
are gaining traction in new area; ex. engineering school now teaching cyber security;
thermos must be able to hold hot & cold b/c yeti can)
4. Compatibility w/ the organization's objectives & resources (Co. DNA; McD's won't go
to find dining)
Positioning - Answers -- The place a product, group of products, and/or brand occupies
in consumers' minds on important attributes relative to competitive products (what
consumers think about your brand relative to control mind of consumers)
- based on substantive brand value (must fulfill customer value prop. ex. Walmart-low
prices)
- memorable and distinctive (simple things accessibly communicated (tagline-just do it;
characters- Flo)
****PRODUCT DIFFERENTIATION
- to test positioning; "when I say___ which brands come to mind? How do they
compare?" All about DIFFERENTIATION (how they compare) ex. cereals (cheerios v.
lucky charms v. fruit loops); ex. banks- harder to differentiate; don't want to become
commodity b/c not perceived as different
Goals of Positioning - Answers --Define the product for consumers (snack vs. meal
bars)
-Help consumers remember the product (w/ certain attributes: trustworthy, reliable,
fresh, non-antibiotic chicken)
-Must communicate product attributes that are relevant to consumers and that
DIFFERENTIATE it from competition (Baine v. BCG; Ralph Lauren v. Vineyard Vines);
don't want to be COMMODITY in price war; can be physical or non-physical (imagery
one has about a product)
**Positioning must be believable & sustainable!!!
Positioning continued - Answers -- Positioning is Perceptual
- what do customers think or feel? (how will a client perceive you)
- PERCEPTION IS REALITY!
