133) Compare and contrast four major segmenting strategies.
Answer: An undifferentiated marketing strategy ignores market segment differences and targets the whole market with one offer. This mass-marketing strategy focuses on what is common in the needs of consumers rather than what is different. In contrast, a differentiated strategy targets several market segments and designs separate offers for each. Companies hope for higher sales and a stronger position within each market segment. Concentrated or niche marketing goes after a large share of one or a few segments or niches instead of going after a share of a large market. These niches may be overlooked by or unimportant to other marketers. Niching offers smaller companies an opportunity to compete by focusing their limited resources more effectively. Using micromarketing, a company can tailor products and marketing programs to suit the tastes of specific individuals and locations. It includes local and individual marketing.
Diff: 2 Page Ref: 201-204
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 7-3
134) In what ways might a marketer engage in socially responsible target marketing?
Answer: Socially responsible marketers work to avoid purposefully targeting vulnerable or disadvantaged consumers with controversial or potentially harmful products. In addition, marketers may reconsider the marketing of adult products that may spill over into the child segment-either intentionally or unintentionally; primary examples include beer, cigarettes, and fast food. The growth of the Internet has also presented potential problemsnamely that makers of questionable products or deceptive advertisers may more readily victimize the most vulnerable audiences. Marketers can avoid becoming involved in these harmful situations as they attempt to reach vast numbers of consumers with such precise, refined targeting strategies.
Diff: 2 Page Ref: 206-207
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Critical Thinking
Objective: 7-3
135) Explain the concept of positioning for competitive advantage.
Answer: A product's position is the way the product is defined by consumers on important attributesthe place the product occupies in consumers' minds relative to competing products. Positioning involves implanting the brand's unique benefits and differentiation in customers' minds. To carry out effective positioning, a company must identify a set of possible competitive advantages upon which to build a problem, choose the right competitive advantages, and select an overall positioning strategy. The company must then effectively communicate and deliver the chosen position to the market.
Diff: 3 Page Ref: 208-211
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-4
136) Why do marketers segment the market?
Answer: Marketers divide heterogeneous markets into smaller groups that can be reached more efficiently with products and services that match their unique tastes; firms focus on buyers it can serve best and most profitably.
Diff: 2 Page Ref: 190
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-2
137) When might be the best time for a marketer to use geographic segmentation?
Answer: Geographic segmentation may be especially profitable when consumers in different regions, states, counties, and so forth have different buying behaviors and product or service preferences.
Diff: 2 Page Ref: 191
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 7-2
138) Why might demographic segmentation be the most common type of segmentation?
Answer: Demographic segmentation is often based on observable features, making demographic segmentation easier than other types.
Diff: 2 Page Ref: 191
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-2
139) Why must marketers guard against stereotypes when using age and life-cycle segmentation?
Answer: Not all consumers in the same age and life-cycle categories share the same abilities and interests; some 40-year-olds may have more in common with typical 20-year-olds, for example, than with other 40-year-olds.
Diff: 2 Page Ref: 193
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-2
140) If Kool-Aid promotes a year-round campaign that "Kool-Aid isn't just a summertime drink," what type of segmentation is being used?
Answer: Occasion segmentation is being used in this scenario.
Diff: 3 Page Ref: 196
AACSB: Analytic Skills
Skill: Application
Objective: 7-2
141) What is one way in which a marketer can attract nonloyal consumers?
Answer: Marketers can attract nonloyal consumers by putting the brand on sale or by altering price.
Diff: 2 Page Ref: 197
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 7-2
142) How might a marketer benefit from using PRIZM?
Answer: People and locations can be segmented into marketable groups of like-minded consumers, so marketers can more closely tailor their efforts to their target.
Diff: 3 Page Ref: 198
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-2
143) List three variables not applicable to the consumer market that may be used to segment business markets.
Answer: Operating characteristics, purchasing approaches, situational factors, and personal characteristics can all be used to segment business markets but not consumer markets.
Diff: 2 Page Ref: 198
AACSB: Analytic Skills
Skill: Application
Objective: 7-2
144) What factors may impact segment attractiveness?
Answer: The number of competitors, substitute products, power of buyers, and powerful suppliers may impact segment attractiveness.
Diff: 2 Page Ref: 201
AACSB: Analytic Skills
Skill: Application
Objective: 7-2
145) What is one major assumption made by marketers who choose to use an undifferentiated marketing strategy?
Answer: Such marketers assume that all consumers share something in common, regardless of how different the consumers may be.
Diff: 2 Page Ref: 201
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-3
146) XYZ Computers, Inc., a business with limited resources, is a market nicher. How might XYZ benefit from this?
Answer: XYZ Computers will have an opportunity to compete by focusing its limited resources on serving niches that may be unimportant to or overlooked by larger competitors.
Diff: 2 Page Ref: 203
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-3
147) BMW allows customers to design their own vehicle from a set of options at BMW's Web site. What is this called?
Answer: This is mass customization.
Diff: 2 Page Ref: 205
AACSB: Analytic Skills
Skill: Application
Objective: 7-3
148) Explain how market variability impacts the choice of a target-marketing strategy.
Answer: If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing may be appropriate, for example.
Diff: 3 Page Ref: 206
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-3
149) Why might a marketer of laundry detergent be interested in viewing a perceptual positioning map?
Answer: Perceptual positioning maps show consumer perceptions of a brand versus competing products on important buying dimensions. Laundry detergent, for example, may be placed on a perceptual map based on price and cleaning power; this allows a marketer to view how consumers perceive the product with respect to others' products along those dimensions.
Diff: 3 Page Ref: 208
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 7-4
150) In what ways might a marketer be able to gain competitive advantage through channel differentiation?
Answer: Firms that practice channel differentiation gain competitive advantage through the way they design their channel's coverage, expertise, and performance. Such factors as the level of customer service, speed of delivery, packaging, transportation type, and so on may play a role in channel differentiation.
Diff: 2 Page Ref: 211
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 7-4
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