MCS*1000 - Marketplace (Ch. 1-7) UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Geographic segmentation organizes customers into groups on the basis of where they live
Step 1 of STP Establish Overall Strategy or Objectives
Step 2 of STP Segmentation Bases
Demographic Segmentation groups consumers according to who they are using easily measured, objective
characteristics such as age, gender, income, education, race, occupation, religion,
marital status, etc.
Psychographic Segmentation how consumers actually describe themselves or how they live
Psychographics include the following 3 components... self-values, self-concept, lifestyles
Self-values life goals; the overriding desires that drive how a person lives their life
Self-concept the image of people have of themselves
Lifestyles the ways that we live to achieve goals
Values and Lifestyle Survey (VALS) psychological tool developed by Strategic Business Insights that classifies
consumers into eight segments: Innovators, Thinkers, Believers, Achievers, Strivers,
Experiencers, Makers, and Survivors
Behavioral Segmentation groups consumers on the basis of why they buy, how often, and how they plan to
sue the products or services
Occasional segmentation groups consumers based on when they purchase or consume a product or
service
Benefit segmentation groups consumers based on the benefits they derive from products or services
loyalty segmentation strategy of investing in retention and loyalty initiatives to retain the firm's most
profitable customers
usage-rate segmentation how often a person uses the product or service: occasional, light, regular, or
heavy users
, Geodemographic segmentation the grouping of consumers on the basis of a combination of geographic,
demographic, and lifestyle characteristics
Consumers in the same neighbourhoods tend to buy the same; similarly
____ types of cars, appliances, and apparel; shop at the
same type of retailers; and respond _____ to media and
promotions
Step 3 of STP Evaluate Segment Attractiveness
To evaluate segment attractiveness, marketers must identifiable, reachable, responsive, substantial, profitable
determine is the segment _________, _______, ________, __ , and
_______
Identifiable segments must be unique and distinct
Researchable Consumers must know the product or service exists, understand what it can do for
them, and recognize how to buy it
Responsive customers must move towards the firm's products/services and accept the firm's
value proposition
Substantial and Profitable measures size and growth potential of potential target markets
Segment Profitability Formula (Segment size • segment adoption percentage • purchase behaviour • profit
margin percentage) - Fixed Costs
Segment size number of people in the segment
Segment adoption percentage percentage of customers in the segment who are likely to adopt the
product/service
Purchase Behaviour Formula purchase price • number of times the customer would buy the product or service
during a given time period
Profit Margin Percentage (selling price - variable costs)/selling price
Fixed Costs advertising expenditure, rent, utilities, insurance, administration, salaries
Step 4 of STP Select Target Market
ANSWERS
Geographic segmentation organizes customers into groups on the basis of where they live
Step 1 of STP Establish Overall Strategy or Objectives
Step 2 of STP Segmentation Bases
Demographic Segmentation groups consumers according to who they are using easily measured, objective
characteristics such as age, gender, income, education, race, occupation, religion,
marital status, etc.
Psychographic Segmentation how consumers actually describe themselves or how they live
Psychographics include the following 3 components... self-values, self-concept, lifestyles
Self-values life goals; the overriding desires that drive how a person lives their life
Self-concept the image of people have of themselves
Lifestyles the ways that we live to achieve goals
Values and Lifestyle Survey (VALS) psychological tool developed by Strategic Business Insights that classifies
consumers into eight segments: Innovators, Thinkers, Believers, Achievers, Strivers,
Experiencers, Makers, and Survivors
Behavioral Segmentation groups consumers on the basis of why they buy, how often, and how they plan to
sue the products or services
Occasional segmentation groups consumers based on when they purchase or consume a product or
service
Benefit segmentation groups consumers based on the benefits they derive from products or services
loyalty segmentation strategy of investing in retention and loyalty initiatives to retain the firm's most
profitable customers
usage-rate segmentation how often a person uses the product or service: occasional, light, regular, or
heavy users
, Geodemographic segmentation the grouping of consumers on the basis of a combination of geographic,
demographic, and lifestyle characteristics
Consumers in the same neighbourhoods tend to buy the same; similarly
____ types of cars, appliances, and apparel; shop at the
same type of retailers; and respond _____ to media and
promotions
Step 3 of STP Evaluate Segment Attractiveness
To evaluate segment attractiveness, marketers must identifiable, reachable, responsive, substantial, profitable
determine is the segment _________, _______, ________, __ , and
_______
Identifiable segments must be unique and distinct
Researchable Consumers must know the product or service exists, understand what it can do for
them, and recognize how to buy it
Responsive customers must move towards the firm's products/services and accept the firm's
value proposition
Substantial and Profitable measures size and growth potential of potential target markets
Segment Profitability Formula (Segment size • segment adoption percentage • purchase behaviour • profit
margin percentage) - Fixed Costs
Segment size number of people in the segment
Segment adoption percentage percentage of customers in the segment who are likely to adopt the
product/service
Purchase Behaviour Formula purchase price • number of times the customer would buy the product or service
during a given time period
Profit Margin Percentage (selling price - variable costs)/selling price
Fixed Costs advertising expenditure, rent, utilities, insurance, administration, salaries
Step 4 of STP Select Target Market
