Chapter 4 Questions - Marketing management

1. How does a segment differ from a target? What are 4 key features of a good segment? Why does “pointless” segmentation occur? Why is it important to segment? How do you know when to stop? Market Segment: a relatively homogeneous group of customers who will respond to a marketing mix in a similar way. Segmenting: A aggregating process that clusters people with similar needs into a market segment. A segment further differentiates a target, it breaks down a target to smaller groups of people and uses different tools to appeal to them. For example, a new iphone could be targeted at the upper class. But then segmented into groups to market to children vs business men differently. Criteria are homogeneous within, heterogeneous between, substantial, operational. 2. When do you choose a single segment strategy vs. a multiple or a combined market strategy? What are the advantages and disadvantages of each strategy? When is the largest segment not always the best choice to pursue? Describe the relationship between segments and targets? Single: segmenting the market and picking one of the homogeneous segments as the firms target market. Multiple: segmenting the market and choosing 2 or more segments and then treating each as a target market needing a different marketing mix Combined: combining 2 or more submarkets into 1 larger target market as a basis for 1 strategy. Single segment strategy aims at 1 segment and looks at the specific details to try to appeal to them very well. Can really appeal to the entire small semgent, thus build loyal customers, and procuce bigger sales. Combiners try to increase their target markets by combining 2 or more segments, look at various submarkets for similarities and try to appeal to the combined customers with just 1 marketing mix. This approach may help achieve some economies of scale. It may also require less investment than developing marketing mixes for different segments- making it especially attractive for firms with limited resources. Chosing depends on the firms resources, nature of competition, and most importantly the similarity of customer needs, attitudes, and buying behavior. Usually safer to be a segmenter- to try to satisfy some customers very well instead of many just fairly well. (Quality over quantity, less is more). 3. What are three potential dimensions on which to segment consumer markets, and examples of each? What is the difference between a qualifying and determining dimension? Give an example of how they can change over time. Qualifying dimensions: those relevant to including a customer type in a product-market ex) age identification, drivers license, Determining dimensions: those that actually affect the customer’s purchase of a specific product or brand in a product-market. ex) what type of car they will want, the type of alcohol they will buy. Potential dimensions: 1. Behavior- needs, attitudes, and how present and potential goods and services fit into customers’ consumption patterns. a. Affects product and promotion. 2. Demographics- Urgency to get need satisfied and desire.. a. Affects placr and price 3. Geographic- location and other demographics a. Affects size of target markets, place, and promotion 4. What is the function of a product space map? T/F the marketer controls differentiation and positioning. How does a production mentality hinder meaningful differentiation? List three conditions where price would not work as a successful point of differentiation. Positioning: how customers think about proposed or present brands in a market (yours relative to your rivals) Differentiation: what does your brand do better than your rivals? False, these are based on the customer's views. 5. When might re-positioning be necessary? Why is it so difficult? Give a current example of a brand that is in need of repositioning. What is its current target, position and USP what should they be? Assess this statement: “No one else offers this in purple- so that is our USP!” When research shows that the target customers are not viewing the brand in the desired way.