A key to positioning a product or brand effectively is discovering the perceptions of its potential customers. Think about some of your friends who seem a lot like you. According to the Apple market-product grid above, Apple would most likely get the LEAST product synergies from the. Kelloggs different cereals are each targeted at a different type of user. Its online customers can order their shirts using any downloaded photo inserted into 600 templates or even design a shirt from scratch. When you think of family vacations, you probably think of Disney resorts. develop a market-product grid and estimate size of markets. Despite the challenges U.S. automakers face today, they have taken great pains to cater to the younger generationtodays baby boomers who dont think of themselves as being old. link market needs of customers to the organizations marketing program. A market-product grid is a framework to relate the __________ to products offered or potential marketing actions by an organization. Which of the following statements regarding when and how to segment markets is most accurate? Income is used as a segmentation variable because it indicates a groups buying power and may partially reflect their education levels, occupation, and social classes. The annual Sporting News Baseball Yearbook had exactly the same stories but with 17 different covers to appeal to baseball fans in 17 different regions of the U.S. What is the basis of its market segmentation strategy? Fell free get in touch with us via phone or send us a message. Associating these specific needs with consumers in a particular demographic group could be difficult. When compared to a multiple products, multiple market segments strategy, a one product, multiple market segment strategy. http://app.wistia.com/embed/medias/d0b89776be. Generations and Characteristics, Table 5.3 Major U.S. quantity consumed or patronage (store visits) during a specific period. 59. Shein has the right idea with their Facebook ad: They created this ad specifically for women (hence the womens swimsuits and the for women in the description). 1) one product and multiple market segments 2) multiple products and multiple market segments and 3) "segments of one" or mass customization. Barry, T., Mary Gilly, and Lindley Doran, Advertising to Women with Different Career Orientations, Journal of Advertising Research 25 (AprilMay 1985): 2635. The strategy most likely to exploit marketing synergies and efficiencies would be to target. In addition to segmenting by gender, market researchers might couple gender with marital status and other demographic characteristics. Consequently, one obvious way to begin the segmentation process is to segment markets into these two types of groups. For example, Goya Foods is a U.S. food company that sells different ethnic products to grocery stores, depending on the demographic groups the stores serveHispanic, Mexican, or Spanish. Although we doubt Glad will ever go to great lengths to segment the Press n Seal market by hedgehog owners, the firm has certainly gathered a lot of good consumer insight about the product and publicity from its 1000uses.com Web site. Frequency marketing is a strategy that focuses on usage rate. Which of the following is a disadvantage of employing a multiple products, multiple market segments strategy if NOT implemented well? Cox, B., GM Hopes Its New Managers Will Energize It, Fort Worth Star-Telegram, August 29, 2009, 1C4C. Changing the place an offering occupies in consumers' minds relative to competitive products is referred to as. Youre probably familiar with some of the age groups most commonly segmented (see Table 5.2 U.S. The personnel in Glads marketing department subsequently launched a Web site called 1000uses.com that contains both the companys and consumers use tips. The O3 technology refers to an innovative tennis racquet Prince Sports developed that simultaneously delivers faster racquet speed and a bigger "sweet spot" in the middle of the frame. B Marketers should use segmentation bases in this order to reduce potential costs: behavioral. make intelligent "guesstimates" of the market size for each cell using a simple scale from zero to three ("0" = no market; "1" = a small market; "2" = a medium market; and "3" = a large market). For example, Colgate 2-in-1 Toothpaste & Mouthwash, Whitening Icy Blast is aimed at people who want the benefits of both fresher breath and whiter teeth. Motts used an advertising campaign to change the way consumers thought about its applesauce from a dinnertime side dish to a replacement for cooking oil in baking. Perhaps its a combination of two or more benefits. (Loganville, GA: Richard K. Miller & Associates, 2009), 15766. Enjoy them all under the cozy glow of festoon lighting on . You'll want to make sure any cultural references in your advertising make sense to the age group. To know more please refer to our. Generations and Characteristics. World-class advisory, implementation, and support services from industry experts and the XM Institute. Want to create or adapt books like this? Segmentation based on some subjective mental or emotional attributes, aspirations, or needs of prospective customers is referred to as, Market segmentation involves aggregating prospective buyers into groups that (1) will respond similarly to a marketing action and (2), Lands End will custom fit a Marinac jacket and make it with additional features such as thumb loops, underarm ventilation slits, and a key clip when you order from LandsEnd.com. be similar in terms of their consumption behavior. What should a marketer do after he or she has grouped products to be sold into categories? 59. Figure 9-9 above shows the market-product grid for a Wendys restaurant next to a large urban university campus. Organizational synergy is the increased customer value achieved through. Targeting baby boomers and gen X with the same offer and marketing strategy is likely to produce undesirable results because they think and act differently. In the Apple market-product grid shown above for its computer line, the "individuals" consumer segment seems willing to purchase each item in Apples product line. For instance, few men apply makeup, and most women dont wear boxers. adds to the manufacturers sales revenues and profits. Perhaps they do so because some studies show that the market segment with greatest financial potential is married couples without children (Hill, et. The first step in segmenting and targeting markets that links customer needs to marketing actions is to, The second step in segmenting and targeting markets that link customer needs to marketing actions is to. The fourth step in segmenting and targeting markets that link customer needs to marketing actions is to __________. Variables such as location, the North American Industry Classification System (NAICS) code, and type of buy are all examples of ways to, The second step in segmenting and targeting markets that link customer needs to marketing actions is to. The segmenting techniques weve discussed so far in this section require gathering quantitative information and data. Marketing professionals know this. develop a market-product grid and estimate size of markets. Some vacation properties, such as Sandals, exclude children from some of their resorts. 59. (You probably know some baby boomers who own a Nintendo Wii.) Dividing the market into smaller segments, each with a common variable, allows companies to use their time and resources more efficiently. The total cost included ninety-nine dollars in labor costs plus coffee and donuts. 59. simplicity and cost-effectiveness of assigning potential buyers to segments, The best segmentation approach is the one that. The place a product occupies in consumers' minds on important attributes relative to competitive products is referred to as. Recently, U.S. dairies, struggling to increase milk sales, tried to change the way adults thought about chocolate milk. PRIZM NE uses zip codes and demographic information to classify the American population into segments. How much did it cost? This company is now struggling to stay in business. Reynolds responded to this problem by creating PotLux cookware, attractive and inexpensive disposable dishes for transporting food. You might see a snowboard shop in the same area but probably not a surfboard shop. how the sleeper sleeps: side, back, or stomach. 2023 Instapage, Inc. All Rights Reserved. take marketing actions to reach target markets. Ethnic Segments and Their Spending contains information about the number of people in these groups and their buying power. Home Flashcards Marketing Exam 2 Chapter 9, A graph displaying consumers perceptions of product attributes in two dimensions is referred to as a. Cannibalization would MOST LIKELY occur if. They tend to have distinct ways of speaking and often spend their time on separate platforms. Which of the following is NOT a reason to segment a market? Stephanie Mialki is a digital marketing professional with expertise in ecommerce trends, landing pages, journalism, and mass communication. They purposely targeted them on Facebook for the most engagement and click-throughs. 2Telecommunications Marketing Opportunities to Ethnic Groups: Segmenting Consumer Markets by Ethnicity, Age, Income and Household Buying Patterns, 19982003, The Insight Research Corporation, 2003, http://www.insight-corp.com/reports/ethnic.asp (accessed December 2, 2009). Watch the YouTube video to see a fun generational type of advertisement. Tornoe, J. G., Hispanic Marketing Basics: Segmentation of the Hispanic Market, January 18, 2008, http://learn.latpro.com/segmentation-of-the-hispanic-market/ (accessed December 2, 2009). Food service is a dominant segment of the hospitality industry that represents a significant proportion of the economy. Suppose your great new product or service idea involves opening a local store. Choose the one alternative that best completes the statement or answers the question. This is an example of. Can you think of any marketing opportunities this might present? Men and women have different needs and also shop differently. For example, over the past few decades U.S. families have been getting smaller. In the early 1980s, Apple, Inc. was often called "Camp Runamok" because. Some of the ways in which people use the product are pretty unusual, as evidenced by the following comment posted on the site: I have a hedgehog who likes to run on his wheel a lot. The market segments should be consistent with the firm's marketing capabilities. This feature sets the smartphone apart from its competitors and is part of Apple's strategy for. 216.Mott's used an advertising campaign to change the way consumers thought about its applesauce from a dinnertime side dish to a replacement for cooking oil in baking. All the buyers in the entire market have similar wants and needs. Market segmentation stresses __________ and relating them to specific marketing actions. Instead of reaching an entire market or broad customer base, a brand uses this method to speak directly to a defined subset of the market. is incompatible with its companys goals or objectives. Demographic segmentation is a precise form of audience identification based on data points like age, gender, marital status, family size, income, education, race, occupation, nationality, and/or religion. The Premier Road is made with extra cushioning for pavement runners. Segmenting buyers by personal characteristics such as age, income, ethnicity and nationality, education, occupation, religion, social class, and family size is called demographic segmentation. What two types of information do market researchers gather to develop consumer insight. Which of the following is an example of a multiple products and multiple markets strategy? Chapter 3: Consumer Behavior: How People Make Buying Decisions, Chapter 5: Market Segmenting, Targeting, and Positioning, Chapter 7: Developing and Managing Offerings, Chapter 8: Using Marketing Channels to Create Value for Customers, Chapter 9: Using Supply Chains to Create Value for Customers, Chapter 10: Gathering and Using Information: Marketing Research and Market Intelligence, Chapter 11: Integrated Marketing Communications and the Changing Media Landscape, Chapter 12: Public Relations, Social Media, and Sponsorships, Chapter 14: Customer Satisfaction, Loyalty, and Empowerment, Chapter 15: Price, the Only Revenue Generator, Table 5.1 Common Ways of Segmenting Buyers, http://www.cia.gov/cia/publications/factbook, Table 5.2 U.S. The messages are entirely different, based on local customs, religions, nationality, etc. e.type of buying situation. General Mills launches Chocolate Cheerios. Many iconic commercials and catchphrases have existed over the years, but in the 1980s one rose above them all. new menu items or promotional strategies may succeed in converting the prospects into users. Type in your zip code, and you will see customer profiles of the types of buyers who live in your area. High rollers, or people who spend a lot of money, are considered VIPs. VIPs get special treatment, including a personal host who looks after their needs during their casino visits. C. General Motors markets a motorcycle similar to the Can-Am Spyder Roadster 3-wheel bike. About 100 display boots provide style guidelines. Model E is a new type of car manufacturer that relies on the Internet to build new car designs from prototypes to marketable vehicles much faster than ever before. The territory for this opportunity is Scottsdale, AZ. This multiple product and multiple market segment strategy would have the greatest difficulty meeting which of the following criteria used to form market segments? Which of the following is a consumer demographic segmentation variable? Demographic segmentation allows you to get more specific with your marketing strategies. Building open and honest relationships with communication is an example of Zappos __________. offering the absolute best selection of shoes and the absolute best service. You wouldn't want to spend your time and money making sure your campaigns also make sense to seniorsthat would be a waste. According to Figure 9-5 above, people who currently do not use a firms product or service but who might become users in the future are referred to as. The way in which people use products is also be a basis for segmentation. True. See how technology & data enable you to personalize like never before. For more on how to personalize and make the most out of your landing page marketing efforts, sign up for an Instapage demo here. By contrast, the members of Generation Y have a lifetime of buying still ahead of them, which translates to a lot of potential customer lifetime value (CLV), the amount a customer will spend on a particular brand over his/her lifetime, for marketers if they can capture this group of buyers. By contrast, smaller customers are more likely to have to rely on a firms Web site, customer service people, and salespeople who call on them by telephone. Many companies use this data to sell different tiers of the same product, based on income level. A secondary segment of interested consumers might be grandparents who are likely to spend less on day-to-day childcare items but more on special-occasion gifts for children. In some areas, you can switch your mobile phone to a discoverable mode while youre shopping and, if you want, get ads and deals from stores as you pass by them, which is often less expensive than hiring people to hand you a flier as you walk by3. Definition. When a firm produces only a single product or service and attempts to sell it to two or more market segments, it avoids __________, which often results in extremely high research, engineering, and manufacturing expenses. The best segmentation approach is the one that. It's arguably one of the most important market segmentation techniques for hospitality venues (like restaurants, cafes, and hotels) because identifying customer groups based on where they live will give you a very good idea of how likely they are to visit you. Selling a product to a different market segment usually requires a different marketing action that in turn means greater costs. McDonalds generally wont put a store in a town of fewer than five thousand people. If youre going to appeal to my daughter, youre going to have to be in the digital world, explained one GM vice president (Cox, 2009). All of the following are market segmentation strategies EXCEPT: Which of the following statements regarding segmentation bases is most accurate? The Zappos segmentation strategy is based on. His taxes are $5,000 per year. All of the following are criterion used for selecting target market segments EXCEPT: simplicity and cost of assigning potential buyers to segments. A national car rental firm targets 50 percent of its advertising to salespeople who rent a car over 40 weeks per year. what is the first step in the market segmentation process? In the United States, the Harry Potter series of books were often at the top of The New York Times fiction bestseller list. The larger TVs can be outfitted with surround sound at a higher price than the smaller ones. Targeting is the act of providing specific, tailored content to an audience that meets a certain set of data criteria. Products and services in the spa market used to be aimed squarely at adults, but not anymore. The idea is that housing areas in different zip codes typically attract certain types of buyers with certain income levels. Post wanted to convince people either who had never tried the cereal or who were familiar with the product to use it in a variety of different ways. Why are their families so much different from yours? Donnelly, J. H., preface to Marketing Management, 9th ed., by J. Paul Peter (New York: McGraw-Hill Professional, 2002), 79. Hill, B. J., Carey McDonald, and Muzzafer Uysal, Resort Motivations for Different Family Life Cycle Stages, Visions in Leisure and Business Number 8, no. Australia-based Renewable Energy Ltd. sells a $10 million device that converts manure into energy. In general, Western Canadians much prefer country music while Eastern Canadians prefer rock. Companies have to develop new products designed to appeal to Generations X and Y and also find new ways to reach them. As a result, you can gauge what the buying habits of people in certain zip codes are, which can be helpful if you are trying to figure out where to locate stores and retail outlets. Instead, businesses are concerned solely with buying products that will ultimately increase their profits. Several companies have introduced lower-cost brands targeting Generation Xers, who have less spending power than boomers. All the buyers in the entire market have similar wants and needs. Two key types of synergies are __________. So, of course, McDonald's adapted, even though they are a burger chain, by advertising their non-red-meat and vegetarian options. For instance, if your business is a high-end restaurant, should it be located near the local college or country club? a marketing strategy that involves a firm using different marketing mix activities to help consumers perceive the product as being different and better than competing products. In the Apple market-product grid shown above for its personal computer line, the iMac is popular among all the segments Apple can target. Berkowitz, E. N., The Essentials of Health Care Marketing, 2nd ed. Click the card to flip . take marketing actions to reach target markets. Based on the targeted market, businesses can determine the location and type of stores where they want to sell their products. 216.Positioning that involves competing directly with competitors on similar product attributes in the same target market is referred to as . The bureau was also able to identify segments significantly different from the Chicago segment, including blue-collar adults in the Cleveland area who vacation without their children. Its also considered by many businesses to be the most cost-effective way to divide a target market. When expenses are greater than the potential increased sales from segmentation, the firm should. Its also why businesses print codes on coupons that correspond to zip codes. The William Morris Agency represents country singer Trace Adkins in negotiations with various venues in which he could perform. The company believes its target market consists of businesses that use a lot of energy like its first customer, a fertilizer manufacturer that was located in a rural area. What buyer characteristics do companies look at when they segment markets? And a personalized, targeted approach is essential to effectively manage your advertising spending. Manufacturing these different cereals is clearly more expensive than producing one but seems worthwhile if it adds to the manufacturers sales revenues and profits, doesnt reduce quality or increase price, and, A market-product grid relates the market segments to the products offered or potential marketing actions. Which of the following statements regarding market segmentation is most accurate? For example, many famous fashion designers have different collections to target other age groups. All of the following are geographic segmentation variables EXCEPT: Which of the following data are collected from consumers to develop a perceptual map for a particular product? In a marketing context, "promotion" includes all of the following, except: Advertising. grouping people according to similar needs. In determining its positioning in the minds of customers, companies take four steps: (1) identify the important attributes for the product or brand class; (2) discover how target customers rate competing products or brands with respect to these attributes; (3) ___________; and (4) reposition the companys product or brand in the minds of potential customers. Marketing professionals want to know why consumers behave the way they do, what is of high priority to them, or how they rank the importance of specific buying criteria. Conversely, 85% of new product launches in the US fail to generate desired revenue due to poor segmentation. Demographic segmentation is used for targeting specific audiences. group products to be sold into categories. If you capture enough of them, you can earn a profit (von Hoffman, 2006).

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