CHAPTER 4

Market segmentation is:

• the process of dividing a market of potential customers into groups, or segments, based on different characteristics.

• Classifying products into the customers who would most likely want to buy it

• the market for tangerines, oranges and lemons

What does it mean when we say that markets are dynamic?

• Markets are cool?

• Markets are always changing?

• Markets stay the same, but are still cool.

• Who knows?

Why do market segmentation?

• It is good business

• It allows a business to target it's advertising

• It creates economies of scale

• It helps to determine price elasticity

Which of the following is not a potential benefit to a business of market segmentation:

• Better matching of customer needs

• Target marketing communications

• Retain more customers

• Lost share of the market segment

Which of the following is not a behavioural base?

• Rate of usage

• Loyalty of customer

• Benefit sought by the customer

• Lifestyle

Which of the following is not a psycholographic base?

• Occupation

• Personality

• Lifestyle

• Attitude

Which of the following is not a Geographic base?

• ACORN

• Region

• Location

• Readiness to purchase

Which of these is NOT a common market segmentation mistake?

• Creating too small of segments

• Not updating your strategy as your customer base changes

• Targeting the segment instead of the money

• Identifying only one market segment

MicroFridge is a combination microwave, refrigerator, and freezer that is designed for people who are short on living space and need to make the best possible use of every inch of space they do have. MicroFridge uses a(n) ______________ segmentation strategy.

• user rate

• lifestyle

• family life cycle

• benefit

• occasion

Which of the following statements is true about positioning strategies?

• not all products can be differentiated.

• a product that is not positioned as superior, distinctive, preemptive, or affordable will succeed if it is implemented correctly.

• the end result of positioning is the successful creation of a market-focused value proposition.

• positioning strategies must stress real benefits or they will fail.

• all brand differentiation strategies are meaningful and worthwhile.