part 2.docx - Chapter 6 1 Market segmentation is the practice of splitting the market into groups based on one or more characteristics such as gender

part 2.docx - Chapter 6 1 Market segmentation is the...

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Chapter 6 1.Market segmentationis the practice of splitting the market into groups based onone or more characteristics such as gender, age range, income, ethnicity, types of leisure activities, and so forth. Only a few of these groups may be of interest. Although there are countless ways to segment a market, it is important to be aware that it is a means to an end. Why is the market being segmented? Are thefactors chosen for segmentation appropriate?For example, if both men and women want your product, it does not make senseto segment them and treat them as two separate groups. On the other hand, in some cases, a good segmentation may require a combination of several characteristics. For example, a marketer of a variety of beauty products may usegender and income to segment the market.2.Market targeting involves taking the identified segments and determining which are most attractive from the perspective of a given organization. Generally, a segment is attractive for an organization if the following conditions are met:oIt is compatible with the organization’s goals.oIt is big enough and there are signs of positive future growth.oThe organization can defend itself against the competition within the segment.A marketer may have identified seven groups of people segmented by age,for example, but realizes that only people aged 13 to 18 years are of interest to the organization.Figure 7.3 on page 261 of the textbook displays a positioning mapfor large luxury SUVs. How is such a map created? To obtain such a map, a survey has to be conducted, and the data collected have to be analyzed using advanced multivariate statistical techniques. The map is a visual display of respondents’ perceptions of products, brands, and companies.Market positioningrefers to actions taken by marketers to make sure their products appeal to the markets they want to target. If, for example, the target market for a product is teenagers, then the product or service (and its pricing, packaging, promotion, and distribution) should all be consistent with what appeals to teenagers. It would make no sense to offer a skin cream for teenage acne and try to sell it in a seniors' magazine or in retirement homes.To build an effective market position, an organization has to first understand what its target market values, then examine how the competitors position themselves, and finally determine how its offering may be presented both to appeal to the target market and to differentiate itself from the competition’s product. It is important to realize that a clear positioning has to indicate to customers why they should buy a specific product instead of others in the same product category.
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Lesson 7: Product, Branding, and Life-Cycle StrategiesLesson Review Suggested SolutionsChapter 9Question 1A brandis a name, term, sign, symbol, design, or a combination of these, that identifies the maker or seller of a product or service. Individual answers will vary; explaining it to the CEO
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