Study-Guide-for-Exam-2 - Study Guide for Exam 2 Chapter 7...

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Study Guide for Exam 2 Chapter 7 – Segmenting and Targeting Markets What are the terms, market, market segment, and segmentation? Market – People or organizations with needs or wants and the ability and willingness to buy Market Segment – A aubgroup of people or organizations sharing one or more characteristics that caused them to have similar product needs Segmentation – The process of dividing a market into meaningful relatively similar and identifiable segments or group (i.e. Geographic, demographic, benefits) Criteria for successful segmentation Substantiality – Segment must be large enough to warrant a special marketing mix identifiably/measurability – Segments must be identifiable and their size measurable Accessibility – Members of targeted segments must be reachable with marketing means Responsiveness – Unless segments responds to a marketing mix differently, no separate treatment is needed Bases (Variables) for Segmenting Consumer Markets Geography (i.e. Snowboards in Mountain regions) Demographics (focus more on family life cycle segmentation). Psychographics (focus more on geodemographic segmentation)(i.e. Personality – Porsche owners are over 40 making $200,000/year, Motives – Mercedes markets to status motive, life insurance markets emotional motives, Subaru markets to rational motives) Benefits – The process of grouping customers into market segments according to the benefits they seek from a product(i.e. Protein bars = People on low carb diet) Usage rate (What is the 80/20 principle?) – 20% of customers = 80% of demand Strategies for Selecting Target Markets Undifferentiated targeting – Marketing approach that vies the market as one big market with no individual markets. (i.e. Cokes initial product was a single size green bottle, or commodities such as sugar) Concentrated targeting – selects a market niche(i.e. AOL targeting internet newcomers by making it easy to use) Multi-segment targeting – Firm that chooses to serve two or more well defined market segments and develops a distinct marketing mix for each. (i.e. Pepsi targets CodeRed to African Americans and PepsiBlue to Teens) Terms you must know regarding positioning: Position – The place a product, brand, or group of products occupies in consumers minds relative to competing offerings(i.e. Proctor and Gamble offers 11 different types of laundry detergents) Product differentiation – A positioning strategy that firms use to distinguish their products from those of competitors. Distinction can be real or perceived (i.e. Tandem Created a computer w/ Two CPUs and 2 Memories for Companies that cant afford to ever go down like Airline companies. Or Soap offer distinct Smells or “secret additives”) Perceptual mapping –A means of displaying or graphing, in two or more dimensions, the locations of products, brands, or groups of products in customers minds.(i.e. After
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This note was uploaded on 12/04/2011 for the course MKT 3401 taught by Professor Jaber during the Spring '08 term at LSU.

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Study-Guide-for-Exam-2 - Study Guide for Exam 2 Chapter 7...

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