MKTG 3340 Exam 2 Questions with Complete Answers Rated A+

Market Segmentation - aggregate consumers into groups (segments) that have similar needs and will react similarly to a marketing action Segmentation Strategies - - 1 product w/ multiple target segments (Johnson shampoo for dogs or babies, tums for calcium or antacid) - multiple products/ multiple segments (utility mini van vs. excitement sports car) - mass customization (dell built to order laptop) Criteria for effective market segmentation - 1. similarity of needs of potential buyers w/in a segment 2. difference of needs of potential buyers among segments 3. simplicity and cost of assigning potential buyers to segments 4. segment must have enough potential for increased profit and ROI 5. feasibility of reaching a chosen segment w/ a particular marketing action Variables for market segmentation - * marketers often use more than 1 of these variables in segmentation (MULTIVARIABLE SEGMENTATION) 1. Geography 2. Psychographics- how we live our lives 3. Usage/ Commitment Patterns (Behavioral)- how much we use a product/service 4. Benefits (Behavioral)- tumbler keeps water cold 5. Demographics Demographic Segmentation - * most used - Age (or head of household)- can't use in some cultures w/ multigenerational homes (dog food, puppy chow, active dos, senior dog) - Gender (Faith Popcorn says that the future society will be genderless; deodorant advertised by sex) - Family Size - Marital Status - Income (Rolex vs. timex) - Education - Occupation Geographic Segmentation - - Country - Region (ex. raid segmented country by bugs indigenous to that area) - City vs. Rural ( food manufacturers; Olive Garden found ppl in n.e. like smooth sauce; some areas like more spice) - Climate (ex. subaru popular in mountains b/c 4 wheel drive; trying to penetrate new markets) - Population Density Psychographics Segmentation - -- understanding consumer activities, interest, opinions; deals with personality Lifestyle segmentation provides insight into CONSUMER'S MOTIVATIONS - often used w/ demographics - seeing multi-tasking rise in pop (ex. supermarket w/ starbucks & atm) -Lifestyle impacted by Activites, Interests, Opinions(lexus- sophisticated, patagonia- sustainable) Usage/Commitment Patterns (Behavioral Segmentation) - 1. Usage - heavy/medium/light users (80/20 RUlE-- 20% of consumers make up 80% sales/complaints, etc; season tix, 87% beer consumer by heavy users "miller light-tastes great, less filling", "Schaefer- the one beer to have when your'e having more than 1") - Nonusers 2. Commitment - Brand-Loyal Users (keep coming back; starbucks) - Switchers/Variety Seekers (hard to keep b/c switch a lot (get bored); influenced by price & mktg activities) - Emergent Consumers (gradual influx of 1st time buyers; having baby- strollers, diapers; 1st job- apparel, desk supplies; college- dorm stuff, laptop) Benefits (Behavioral Segmentation) - * one of the MOST POWERFUL b/c hits in your gut * often combine w/ demographics, lifestyle, usage What consumers value; often focus on results of using product/service (prestige? passenger? safety?) Target Market - - a specific group of potential consumers to direct marketing actions; b/c a firm can't satisfy all consumers' needs - may select more than 1 target market - packaging, ads, catch phrases (Coke Zero, Dr. Pepper 10 to young men) Criteria for selecting target markets - * where we have highest chance of success