Marketing Multiple Choice and Short Answer Questions

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Marketing & People

Learning Objectives

Explain market segmentation and its relevance to marketing
Describe and differentiate among the different forms of market segmentation
Outline the steps involved in segmenting a market
Create a target market profile
Position a product in the market and develop a positioning map

Segmentation and Targeting

Chapter

Segmentation and Targeting

LO 1

Market Segmentation

A single product cannot satisfy everyone
Focus on the consumers most likely to purchase
A market segment is a “piece of the market”
Aggregating prospective buyers into groups that share common needs and respond similarly to marketing programs
Competition for segments leads to product differentiation
Two main market segments

Consumer markets

Business markets

LO 1

“You cannot try to be all things, to all people …”

“… because you end up satisfying none.”

Imagine trying to market a running shoe that appealed to basketball stars, grandmothers, teen girls, and skateboarders!

You would make so many compromises, trying to bring something to market that wouldn’t OFFEND anyone … that’d you’d likely have something that interested NONE of them.

Entrepreneurs and marketers need to organize the marketplace into groups of people that are likely to want their good, service or idea.

These groups are called “segments.”

Just think of them as slices of the overall marketplace.

Later, this helps entrepreneurs and marketers to FOCUS their efforts one one or two very interested groups of people.

It doesn’t mean that if you’re focused on “male surfers between the ages of 18-25, who eat large portions of food, have a moderate income and love to support local businesses” … that you won’t let businessmen and women in your restaurant. It just means you’ve designed and/or positioned your restaurants to appeal to your chosen market segment. More about that later

Forms of Market Segmentation

Mass Marketing
Segment Marketing
Niche Marketing
Individualized Marketing

LO 2

Mass Marketing

Rarely seen today

Competitiveness of the market
Need to specifically address consumer needs

LO 2

Segment Marketing

Most common form of segmentation followed by large companies
Meeting the needs of target groups (chosen segments) with specific products and marketing programs

LO 2

Niche Marketing

Concentrate on a smaller area to be successful
Kashi targets ‘health enthusiasts’

LO 2

Individualized Marketing

Through the use of sophisticated tracking and statistical models, behaviour is predicted
Individual offers are developed
Product selection and products can be customized

LO 2

The Evolution of Segmentation

Segmentation divides the larger potential market into smaller pieces, or slices

A Market Niche is a small segment

Market Fragmentation: today, due to changes in media, the Internet, and brand proliferation, there are MANY different and very small consumer segments with distinct needs and wants

VIDEO: http://www.youtube.com/watch?v=ciSrNc1v17M

Market fragmentation:

Explosion in number of channels, therefore not a common brand/advertising experience in a family
Turning to customizable websites for entertainment and/or watching video on demand
Explosion in number of brands, features, versions, options … even “mass customization” for some products that individuals can customize

10 Steps In Market Segmentation

LO 3

Target Market Profiles

Created by considering:

Geographics
Demographics
Psychographics
Behaviouristics

LO 4

Target Market Profiles

LO 4

How did you "segment” in high school?

Glee photo source: http://www.fanpop.com/spots/glee/images/8088197/title/glee-wallpaper-wallpaper

What groups or segments of teens were there in your high school? What did you call segments in high school? (cliques? Or?)

What “factors” did you use to organize them into “virtual groups”? (what kinds of things did they have in common)

Could a student be in more than one group?

How about teachers? Where they segmented too? If so, how?

Let’s organize those high school “factors” into traditional segmentation factors that marketers use:

Geographic

Demographic

Behavioural/Benefits

Psychographic/Lifestyle

Market Segmentation Factors
(Start with one category, and add another.)

e.g. “T2P”

Usage & Commitment

Demographics

Psychographics

Geographics

Benefits

Heavy Users

Age

(Lifestyle)

Country

Reliability

Non-Users

Gender

Activities

Region

Speed

Brand-loyal Users

Marital Status

Interests

Province/State

Glamour

Switchers/Variety Seekers

Income

Opinions

City/Rural

Luxury

Emergent Customers

Education

Personality

Neighbourhood

Comfort

Stage in Adoption

Occupation

Prestige

80/20 Principle

Ethnicity

Safety

Religion

Affordability

Family Life-cycle

Etc.

Climate

Behaviour

Geodemographics

These are the 4 most common categories of Market Segmentation Factors.

Sometimes you’ll see Geographics added into Demographics.

Other textbooks will tell you that Benefits and Usage are separate categories.

But these 4 are the most common.

Here’s a way to remember them: “The 4 O’s” (Geo, Demo, Behavo, Psycho)

You would do MARKET RESEARCH to find out this information and decide on your segments.

Together, let’s use these factors describe a couple of possible segments featured here

Which Segmentation Factor/Category would you start with? Why?

1) Young Oil Rig Working Men

2) Active Senior Women

3) Social Second-Generation Grads

Target Market Profiles

All variables must be considered in the creation of the profile

The profile forms the basis of all aspects of the marketing program

LO 4

Product Positioning

Product image
Target Audience’s mind
Relative to competition

Positioning Statements include:

Product name

Category in which product competes

Why target buys the product

What sets product apart

“simple, clear and focused”

LO 5

Repositioning

As a result of changing consumer trends

McDonald’s

Physical changes
Menu changes
Product additions
Communication changes

LO 5

Repositioning

LO 5

Positioning Maps

LO 5

Positioning Maps

Also known as Perceptual Maps
Two most important attributes of your product that drive target group purchases in the category
Maps result in a visualization of opportunities and threats

In Practice:

Positioning drives the coordination of the marketing mix to meet targets’ expectations

LO 5

Developing a marketing strategy aimed at influencing how a particular market segment (Target Market) perceives a good/service in comparison to the competition

Brand concept
Brand image

Positioning

What WORDS would you use to describe the competitive POSITIONING of these coffee products?

Positioning

Let’s do a perceptual positioning map.

Any other coffee retailers you’d like to add?

Is this product consistent with the Starbucks brand positioning?

Would it be different in Europe?

Positioning

Shall we do a perceptual or factual positioning map for these automotive brands?

Why?

Continuously innovate
Hide in a niche market
Protect by erecting barriers:

Marketing expertise

Customer loyalty

Monopolization

Proprietary technology

Culture-based expertise

Legislation

Capital requirements

Ways to defend a positioning strategy:

Once you’ve staked out your product or brand’s unique positioning … how do you stop copycats?

Remember, people don’t always choose the least expensive product, they value other things.

Here’s a list of things you can do to protect your position.

Let’s think of products or brands that have done these things.

For example: Apple always innovates.

Who has a monopoly?

Etc. …