Session 4

Question 1

How do you create value for targeted customers?

Answer 1

1. Segmentation: dividing the total market into smaller segments
2. Targeting: Select the segment or segments to enter
3. Differentiation: differentiate the product in the minds of target customers
4. Positioning: Position the market offering in the minds of target customers

Question 2

What is the STP Process?

Answer 2

Market segmentation:
1) Identify segmentation variables; 2) Develop profiles of segments

Market Targeting: 3) Evaluate attractiveness of segments; 4) Choose the target segment(s)

Market positioning: 5) Develop positioning concepts for each target segment; 6) Develop the marketing mix for the chosen positioning concept

Question 3

Why do companies segment?

Answer 3

Only certain groups or segments want to buy products or services

Question 4

What is market segmentation?

Answer 4

Dividing the total market for a product into several groups using factors such as demographics, psychographics and geography

Question 5

What are the two factors that segmentation helps increase?

Answer 5

Promotion: avoid wasting money on unprofitable segments

Product develoption: Procter and gamble has identified nine laundry detergent segments and have developed products to meet each segment’s needs

Question 6

What are the criteria for a segment to be effective?

Answer 6

Segment is: measurable, reachable through promotion and distribution, profitable, relevant or able to be served effectively by the firm

Question 7

What are the steps in segmentating and targeting the market?

Answer 7

1. Define the market (describe all possible customers)
2. Use variables aka bases (demographics, age, gender, etc) to divide market into segments
3. Select segments to target
4. Use 4Ps to position and built performnace

Question 8

What are examples of a base?

Answer 8

• Geography: divide based n geography, most product derive majority of sales from small number of regions. this is usually couples with other bases
• Demographic: seperate by generation (Baby boomers, generation x, generation y, etc), income, gender, family size, life cycle, etc
• Psychographic: Lifetyle (values, attitudes and behaviors exhibited by customers) or poersonality
• Behavioral: Benefits sought (price, quality), user status (first-time, ex-user), Usage rates (light, heavy), loyalty (none, medium)

Question 9

What is the 80-20 rules

Answer 9

80% of something is done by 20% of people.

E.g. 88% of Beer is drunk by 16% of consumers