However, northern states are now seeing more of them as more people of Hispanic descent move northward. The identification of demographic variables is more objective than the identification of psychographic variables, which is more subjective. A framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization is referred to as a __________. FOR COMPETITIVE ADVANTAGE MULTIPLE CHOICE QUESTIONS 1. When developing a new breakfast menu, Wendys had to consider not only the offerings of Burger King and McDonalds but also the. Different factors influence consumers to buy certain things. Americans over sixty-five now control nearly three-quarters of the net worth of U.S. households; this group spends $200 billion a year on major discretionary (optional) purchases such as luxury cars, alcohol, vacations, and financial products (Reisenwitz, 2007). This is an outside sales position responsible for promoting the company's products and services and for building relationships with new and existing accounts. Work with our consultant to learn what to alter. Imagine that the agency decided the singer would not perform at venues located in small town communities that have less than 100,000 people. Similarly, Glad, the company that makes plastic wrap and bags, found out customers were using its Pressn Seal wrap in ways the company could never have imagined. From this perceptual map, you conclude that mineral water is. Big-and-tall stores cater to the segment of population thats larger sized. link market needs of customers to the organizations marketing program. Which of the following is a disadvantage of employing a multiple products, multiple market segments strategy if NOT implemented well? The market segments should be significant in size and purchasing power. A market-product grid is a framework to relate. There are five steps involved in segmenting and targeting markets. \hline 2 & 5 \\ The way in which people use products is also be a basis for segmentation. Overview Advisory b. secures higher levels of customer satisfaction and loyalty. Contrast this with a recent meal deal ad served in the United States, where religious preferences differ and beef is commonly eaten. \hline 3 & 8 \\ A well-executed market segment strategy provides a firm with all of the following EXCEPT: a. develops a clearer focus on market strategy. At first glance, none looks any different from your basic old-fashioned shoe store, but the only boots on hand are display models. She is now thinking of trading him in for a hedgehog.). Casual dining restaurants usually have a full bar with separate bar staff, a larger beer menu and a limited wine menu. Companies are going to great lengths to court this once overlooked group. Products and services in the spa market used to be aimed squarely at adults, but not anymore. Later in the chapter, well look at the ways in which B2B markets can be segmented. 2023 Instapage, Inc. All Rights Reserved. This strategy is an example of. JOB SUMMARY. The Mahogany line is designed to appeal to African-Americans. This is an example of which criterion used to select target market segments? 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. Principles of Marketing by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted. Think of it as being similar to the way in which your professor builds up information on a PowerPoint slide to the point at which you are able to understand the material being presented. STP (Segmentation, Targeting, Positioning) is a three-step approach that combines each of the above practices to hone in and successfully market to consumers. the relatively homogeneous groups of prospective buyers that result from the market segmentation process. quick-serve breakfast items from gas stations and convenience stores. Although its hard to be all things to all people, many companies try to broaden their customer bases by appealing to multiple generations so they dont lose market share when demographics change. A marketing manager must be able to put a market segmentation plan into effect. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? The market segments should be consistent with the firm's marketing capabilities. Well discuss each of these categories in a moment. 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. Consequently, one obvious way to begin the segmentation process is to segment markets into these two types of groups. Buyers throughout the entire market have very similar wants and needs. Likewise, the Chrysler 300 looks more like a muscle car than the old Chrysler Fifth Avenue your great-grandpa might have driven. Pepsi Throwback and Mountain Dew Throwback, which are made with cane sugarlike they were back in the good old daysinstead of corn syrup, are examples (Schlacter, 2009). Some consumers might be interested in the fiber, some consumers (especially children) may be interested in the prize that comes in the box, other consumers may be interested in the added vitamins, and still other consumers may be interested in the type of grains. If 85% of your clients range from 20-35 years old, this is the segment youre going to target. This strongly affects their buying habits and your sales process. a need to devise a marketing program to win customers from McDonalds and Burger King. 45. hen compared to a multiple products, multiple market segments strategy, a one product, multiple market segment strategy, 45. A variety of pasta, seafood and beef dishes round out your options. The total cost included ninety-nine dollars in labor costs plus coffee and donuts. Segmentation bases are criteria used to classify buyers. The restaurant industry is approximately an $800 billion dollar industry. 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. For a fraction of the cost of attending a trade show to exhibit their products, B2B sellers are holding Webcasts and conducting online product demonstrations for potential customers. 2.2 Components of the Strategic Planning Process, 2.3 Developing Organizational Objectives and Formulating Strategies, 2.4 Where Strategic Planning Occurs within Firms, 2.5 Strategic Portfolio Planning Approaches, 3.1 Factors That Influence Consumers Buying Behavior, 3.2 Low-Involvement Versus High-Involvement Buying Decisions and the Consumers Decision-Making Process, 4.1 The Characteristics of Business-to-Business (B2B) Markets, 4.4 Stages in the B2B Buying Process and B2B Buying Situations, 4.5 International B2B Markets and E-commerce, 5.1 Targeted Marketing versus Mass Marketing, 5.3 Selecting Target Markets and Target-Market Strategies, 5.4 Positioning and Repositioning Offerings, 6.3 Types of Business-to-Business (B2B) Offerings, 7.2 Managing New Products: The Product Life Cycle, 8.1 Marketing Channels and Channel Partners, 8.3 Functions Performed by Channel Partners, 9.2 Demand Planning and Inventory Control, 9.4 Track and Trace Systems and Reverse Logistics, 10.2 Steps in the Marketing Research Process, 11.1 Integrated Marketing Communications (IMC), 11.3 Factors Influencing the Promotion Mix, Communication Process, and Message Problems, 12.1 Public Relations Activities and Tools, 13.1 The Role Professional Salespeople Play, 13.2 Customer Relationships and Selling Strategies, 13.4 Ethics in Sales and Sales Management, 14.4 Ethics, Laws, and Customer Empowerment, 15.1 The Pricing Framework and a Firms Pricing Objectives, 15.2 Factors That Affect Pricing Decisions, 16.4 Ongoing Marketing Planning and Evaluation. Next, we choose which of those segments to target. Which of the following statements best illustrates geographic segmentation? This is an example of multiple products aimed at multiple markets. Within a segment, the needs of potential buyers should be similar; among segments, the needs of buyers should be different. Term. As one of these adults, you are a heavy consumer of mineral water. For example, the group of potential consumers for cereal could be almost everyone although groups of people may have different needs with regard to their cereal. a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand. Rather than targeting individual leads, it targets the account level. Intuit, the company that makes the tax software Quicken, has a follow me home program. The purpose of the five key steps in segmenting and targeting markets is to. As an owner of a Wendy's fast-food restaurant, the information in Figure 9-6 above suggests The ultimate criterion for an organizations marketing success is that __________ as a result of increased synergies. In the sneaker market, Reebok and Nike practice __________ positioning since both manufacturers compete in the same target market with similar product attributes. 59. is incompatible with its companys goals or objectives. A framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization is referred to as a __________. This is an example of. Moreover, both the Asian and Hispanic market segments include new immigrants, people who immigrated to the United States years ago, and native-born Americans. Which of the following is a consumer demographic segmentation variable? The third step in segmenting and targeting markets that link customer needs to marketing actions is to __________. College dorm residents frequently want to keep and prepare their own food and snacks to save money or have a late night snack. Let X=X=X= be the number of pairs of sneakers owned. Many people who practice Hinduism (the predominant religion in India) observe a vegetarian diet because of their religious reverence for cows. The William Morris Agency represents country singer Trace Adkins in negotiations with various venues in which he could perform. Which of the following statements regarding market segmentation is most accurate? When a firm produces only a single product or service and attempts to sell it to two or more market segments, it avoids . The fourth step in segmenting and targeting markets that link customer needs to marketing actions is to __________. selecting target market segments to reach. When Ann Taylor, a well-known retailer of sophisticated women's clothing, started losing sales to its own LOFT outlets that feature moderately priced casual clothes, Ann Taylor was dealing with the marketing phenomenon known as . 8) Centrally located storage areas where food and supplies are received until they are requisitioned. Based on the targeted market, businesses can determine the location and type of stores where they want to sell their products. Retro brandsold brands or products that companies bring back for a period of timewere aimed at baby boomers during the recent economic downturn. Variables such as location, the North American Industry Classification System (NAICS) code, and number of employees are all examples of ways to, A market-product grid is a framework to relate. For instance, if your business is a high-end restaurant, should it be located near the local college or country club? Suppose marketers want to use product differentiation and market segmentation strategies. However, this is prime turf for the DQ because it doesnt have to compete with bigger franchises like McDonalds. Manufacturing a product only when there is an order from a customer is referred to as, Performing organizational functions more efficiently, "will our new products steal customers or sales from our older ones? Home Flashcards Marketing Exam 2 Chapter 9, A graph displaying consumers perceptions of product attributes in two dimensions is referred to as a. Four general categories used to segment consumer markets are geographic segmentation, demographic segmentation, , and behavioral segmentation. 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. For, example, did you know that more women in America than ever before (51 percent) now live without spouses? In addition to better ROI, by using demographic segmentation to define and target audiences, you can: Reaching your customers on a more human level with targeted, personalized marketing creates deeper customer loyalty. When expenses are greater than the potential increased sales from segmentation, the firm should. C. meeting customer needs but at the expense of higher prices, D. lower prices but with higher production costs. Watch the YouTube video to see a fun generational type of advertisement. The advertising message was that using applesauce in baking cuts calories and makes the resulting baked good healthier. Which of the following is a criterion used in forming market segments? The Walt Disney Company carefully markets two distinct Winnie-the-Poohssuch as the original line-drawn figures on fine china sold at Nordstrom and a cartoon-like Pooh on polyester bed sheets sold at Walmart. The place a product occupies in consumers' minds on important attributes relative to competitive products is referred to as. different variations of the same basic offering to high-end and low-end segments. 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). One of the most well-known psychographic surveys is VALS (which originally stood for Values, Attitudes, and Lifestyles) and was developed by a company called SRI International in the late 1980s. After quite a while of cleaning a gross wheel every morning, I got the tip to use Pressn Seal wrap on his wheel, making clean up much easier! " Where's the Beef" was a commercial catchphrase for Wendy's that came out in 1984 and was used to question other fast food companies for their lack of meat. \hline Demographic segmentation allows you to get more specific with your marketing strategies. Which of the following is a basis used to segment U.S. organizational markets? a marketing mix in terms of: -product -price -promotion -place. Many iconic commercials and catchphrases have existed over the years, but in the 1980s one rose above them all. What if your product crosses several market segments? Conversely, 85% of new product launches in the US fail to generate desired revenue due to poor segmentation. Small athletic shoe manufactures such as vans have targeted niche markets and make shoes designed to satisfy the needs of different specific groups of customers. When the coupons are redeemed, the store can find out where its customers are locatedor not located. 1 / 46. market segment. Companies are aware that many consumers want to be in higher income groups and behave like they are already part of them. Kellogg's has several cereals targeted at different types of users. The increased customer value achieved through performing organizational functions like marketing or manufacturing more efficiently is referred to as . The purpose of the five key steps in segmenting and targeting markets is to. ChoiceShirts is an online company that makes made-to-order T-shirts. the place a product offering occupies in consumers' minds on important attributes. In the early 1980s, Apple, Inc. was often called "Camp Runamok" because. Within a segment, the needs of potential buyers should be similar; among segments, the needs of buyers should be different. You wouldn't want to spend your time and money making sure your campaigns also make sense to seniorsthat would be a waste. As early as the 1970s, U.S. automakers found themselves in trouble because of changing demographic trends. Positioning that involves competing directly with competitors on similar product attributes in the same target market is referred to as __________. What two types of information do market researchers gather to develop consumer insight. 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. Learn more about how Pressbooks supports open publishing practices. 09/28/2016. For example, if you have no children, your demand for pediatric services (medical care for children) is likely to be slim to none, but if you have children, your demand might be very high because children frequently get sick. A market-product grid is a framework to relate the __________ to products offered or potential marketing actions by an organization. Which of the following is NOT a reason to segment a market? Your assignment at work is to divide buyers into different groups based on social class, lifestyle, and personality characteristics. Family makeup can be instrumental in segmentation because when a familys dynamic changes, its needs and desires often do too. Couples with several children have different needs than those who just had their first child. al., 1990). Other government Web sites you can tap include FedStats (http://www.fedstats.gov) and The World Factbook (http://www.cia.gov/cia/publications/factbook), which contains statistics about countries around the world. Thus, a country music event in eastern Canada is very likely to have lots of empty seats even though it is more populous than the western part of the country. Am I looking at life from their point of view? 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. There are five steps involved in segmenting and targeting markets. Which of the following is a consumer demographic segmentation variable? World-class advisory, implementation, and support services from industry experts and the XM Institute. Have you ever gone to their homes and been shocked by their lifestyles and how vastly different they are from yours? With the tremendous increase in international business and global advertising brings an increase in segmentation based on ethnicity, race, nationality, and religion. Check out a sample Q&A here See Solution star_border Students who've seen this question also like: Principles Of Marketing Why do firms often use more than one segmentation base? A market-product grid is a framework to relate the __________ to products offered or potential marketing actions by an organization. This is an example of __________ segmentation. For example, kitchenware and home-furnishings company Williams-Sonoma opened the Elm Street chain, a less-pricey version of the Pottery Barn franchise. Get Your Free Copy of Our 2020 Personalization Guide. a more adult-oriented beverage than sports drinks. For example, because women make many of the purchases for their households, market researchers sometimes try to further divide them into subsegments. Combo Italian grocery bar and restaurant serving Italian-American classics, including pasta, pizza and Italian sandwiches. Its market share has been steadily declining as consumers began associating it with something their grandfathers ate. Kelloggs different types of cereals are each targeted at a different type of user. Which of the following is the process of getting oxygen from the environment to the tissues of the body? How often the product is used (usage rate), Usage situation (daily use, holiday use, etc. Between 2 and 3 percent of the population have some degree of allergic reaction, usually mild, to preservatives used in salad bars. Large families might be more interested in low-cost household products, as compared to a couple with the same income, but without any children. Subsegmenting the markets could potentially help you. These groups have many individual cultures that come with conflicting interests, preferences, attitudes, and beliefs. Another great example is McDonald's. group products to be sold into categories. This is an example of a(n). Miller R. K. and Kelli Washington, The 2009 Entertainment, Media & Advertising Market Research Handbook, 10th ed. It is easy to forget to take the bowl that you brought to the dinner home with you. (a) Find the elasticity of the demand function 2p+3q=1502 p+3 q=1502p+3q=150 at the price p=15p=15p=15. Geocoding can help businesses see where prospective customers might be clustered and target them with various ad campaigns, including direct mail. 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. My hedgie can run all he wants, and I dont have to think about the cleanup. changing the place an offering occupies in consumers minds relative to competitive products. If the firm decides to expand to the U.S., it most likely will use which of the following strategies to segment its market? Have you ever noticed that in rural towns, McDonalds restaurants are hard to find, but Dairy Queens (DQ) are usually easy to locate? The trends toward larger cars and larger houses appear to be reversing. If people cant afford your product or service, there is no point in targeting them. Which of the following is a criterion used for selecting a target market? a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. Segmentation based on what product features are important to different customers is known as. Behavioral segmentation divides people and organization into groups according to how they behave with or toward products. (Incidentally, one rainy day, the author of this chapter made rain boots out of Press n Seal for her dog. 1) All of the following are restaurant market segments EXCEPT? VALS surveys have been adapted and used to study buying behavior in other countries, too. performing organizational functions more efficiently. John earns $50,000 per year. Ethnic Segments and Their Spending. Apple's iPhone has a feature known as Apple Pay that lets you use your phone to pay for credit purchases, meaning you could leave your wallet at home. Businesses can use advertising personalization to ensure the needs of the defined group are fulfilled: This customer segmentation method is one of the most commonly used because its easy to acquire through census data, analytics software, consumer insights, and more. identify the important attributes for the product or brand class. Which benefit is most important to you when you buy a toothpaste: The toothpastes price, ability to whiten your teeth, fight tooth decay, freshen your breath, or something else? Which of the following is a criterion used for selecting a target market? However, their dorm rooms are often woefully short of space. Men and women generally have different likes, dislikes, needs, and thought processes. Selling a product to a different market segment usually requires a different marketing action that in turn means greater costs. General Mills launches Chocolate Cheerios. c. secures better insight into strengths and weaknesses of the firm's internal resources. In the Apple market-product grid shown above for its personal computer line, the iMac is popular among all the segments Apple can target. The results are as follows: XFrequency1225384125126071\begin{array}{|l|l|} A The identification of demographic variables is more objective than the identification of psychographic. When compared to a multiple products, multiple market segments strategy, a one product, multiple market segment strategy. Ghelani is a senior sales engineer for Air2Web, a company that helps businesses promote their brands and conduct transactions with people via their mobile phones. Table 5.3 Major U.S. In market segmentation studies. These books have been marketed to preteen, teen, and adult readers around the world. Psychographic information is frequently gathered via extensive surveys that ask people about their activities, interests, opinion, attitudes, values, and lifestyles. So what language will you use to communicate your offerings to these people, and where? This variable can be viewed regarding specific age ranges or life cycle stages: babies, children, adolescents, adults, middle-age, and seniors. Which of the following is an example of a "Tiffany/Walmart" strategy? 3) Which of the following dishes was served at the first restaurant established by M. Boulanger in, 4) The system developed by Escoffier in which each position in the kitchen had an assigned station or. 1Generation Y Lacking Savings, Fort Worth Star-Telegram, September 13, 2009, 2D. Which of the following statements is most accurate? Donnelly, J. H., preface to Marketing Management, 9th ed., by J. Paul Peter (New York: McGraw-Hill Professional, 2002), 79. 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. 7 (2007): 40618. For women, those segments might include stay-at-home housewives, plan-to-work housewives, just-a-job working women, and career-oriented working women. 59. A key to effectively positioning a product or brand is discovering its perception in the minds of potential customers. This multiple product and multiple market segment strategy would have the greatest difficulty meeting which of the following criteria used to form market segments? Generations and Characteristics) in the United States. \end{array} the market segments of potential buyers to products offered or potential marketing actions by an organization. The fifth step in segmenting and targeting markets that link customer needs to marketing actions is to __________. Resorts also segment vacationers depending on where they are in their family life cycles. Figure 9-9 above shows the market-product grid for a Wendys restaurant next to a large urban university campus. As an owner of a Wendys fast-food restaurant located near a large urban university, you need to analyze your customers and determine which segmentation base and its associated variable(s) you will use to segment your target market. Sometime later, the same basic formula was given a fresh, minty flavor to appeal to adults. Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action is referred to as, aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action, A basic test of the usefulness of the market segmentation process is whether it leads to tangible marketing actions that can, Market segmentation involves aggregating prospective buyers into groups that __________ and will respond similarly to a marketing action, Market segmentation involves aggregating prospective buyers into groups that have common needs and will. Source: The Customer Under behavioral segmentation, you can categorize your customers and audience based on the following variables: Purchasing Habits Barry, T., Mary Gilly, and Lindley Doran, Advertising to Women with Different Career Orientations, Journal of Advertising Research 25 (AprilMay 1985): 2635. 59. Kelloggs different cereals are each targeted at a different type of user. Many people of Asian descent are known to be early adapters of new technology and have above-average incomes. 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. This is an example of, Segmentation that is based on some objective physical (gender, ethnicity), measurable (age, income), or other classification attribute (occupation) of prospective customers is referred to as. Likewise, B2B sellers often divide their customers by geographic areas and tailor their products to them accordingly. Single individuals tend to prioritize themselves, while newly married couples are likely prioritizing each other and their homes. Sales promotion. Schlacter, B., Sugar-Sweetened Soda Is Back in the Mainstream, Fort Worth Star-Telegram, April 22, 2009, 1C, 5C. But would you change your mind if you knew that baby boomers account for 50 percent of all consumer spending in the United States? group products to be sold into categories. One criterion management wants to use to evaluate potential new geographic market segments is whether new equipment must be bought to serve each new segment. maximizes the opportunity for future profit and ROI. Grouping potential buyers into meaningful segments involves meeting some specific criteria that answer the question, "Would segmentation be worth doing and is it possible?". Understanding these similarities and differences allows you to isolate the market into individual categories and create specific selling points accordingly. 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?
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