Exam 7: Customer-Driven Marketing Strategy: Creating Value for Target Customers

Why do companies opt for market segmentation?

Ferrari sports cars claim superior quality, performance, and style. Ferrari provides "perfection" at a premium price to keep its brand image intact. Which type of value proposition does Ferrari most likely position its products with?

Refer to the scenario below to answer the following question(s). Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind. With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business." Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers. "At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes." -A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.

Which of the following is a disadvantage of using a differentiated marketing strategy?

Calypso Motors recently rolled out its Proteus hatchback. Proteus combines the attractiveness of a luxury car with the excellent agility of a sports car. Calypso Motors is confident that Proteus will appeal to both sports car enthusiasts as well as the luxury segment. Which of the following types of market segmentation is evident here?

Chronos Inc. designs and markets different brands of cycling watches. Each brand has a single unique feature: the Chronos Cosmos has a heart rate monitor, the Chronos Acumen is designed for older cyclists who prefer a large display, and the Chronos Aegis has a GPS function. Which of the following is evident here?

Which of the following marketing strategies is most suitable for smaller firms with limited resources?

List three variables that are used in segmenting business markets.

Define psychographic segmentation.

Market segments that can be effectively reached and served are ________.

How do firms practicing channel differentiation gain competitive advantage?

Which of the following refers to a cultural factor in the context of segmenting international markets?

Explain the four major steps in designing a customer-driven marketing strategy.

Refer to the scenario below to answer the following question(s). Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind. With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business." Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers. "At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes." -Individual marketing is also known as one-to-one marketing, mass customization, and markets-of-one marketing.

When marketers at Fair & Leigh Inc. selected the Millennials, a demographic group that includes many college students, as an untapped group of potential customers for their new line of products, they were engaging in ________.

To the extent that a company can differentiate and position itself as providing superior customer value, it gains ________.

"Many companies today are localizing their products, advertising, promotion, and sales efforts to fit the needs of individual regions, cities, and neighborhoods." This is an example of ________.

A recent study conducted by Estelle Cosmetics Company showed that heavy users of Estelle's products comprise a small percentage of the market. The study indicated that less than 7 percent of all shoppers buy nearly 71 percent of Estelle's products in the United States. This is an example of ________.

Teen Mania Inc., a company marketing adventure sports merchandise for teenagers, targets the world's teenagers, who have similar needs and buying behavior even though they are located in different countries. Which of the following market segmentation is evident here?

Refer to the scenario below to answer the following question(s). Ruben Delgado was making wooden pens and pencils, which had unique engravings, as a hobby until Simon Yoder recognized Ruben's talent. Simon immediately ordered 250 pens and pencils of various styles to be displayed in his shop's showcase. Within three months, the wooden pencils were a hit with all students! Ruben Delgado had never thought of marketing his talent, but Simon's enthusiasm and the recent sales were enough to change his mind. With limited resources, Ruben contacted three additional specialty shops within 100 miles that were situated near schools. He explained his manufacturing processes and engraving options to each. All three shop owners placed a trial order. Within two months, just prior to the holiday season, each shop owner placed an additional order. Ruben was ecstatic! "I figured business would slow down after that," Ruben stated, "but in February I was contacted by Elmore Distributors. At that point, I had to make a huge decision about how far I wanted to go with this business." Elmore Distributors provides products for school fundraisers in a seven-state area. Ruben was offered a two-year contract and immediate inclusion in Elmore's promotional flyer. Ruben Delgado accepted the offer and, along with it, the responsibility to produce thousands of wooden pens and pencils. "I had to get a grip on the magnitude of this project," Ruben added. He decided to place his major focus on the large contract with Elmore. However, to avoid placing his total emphasis with one customer, Ruben continued nurturing his four previously established accounts without targeting any additional customers. "At this point, I had set up an assembly line in a rented building," Ruben explained. "I had to hire three full-time employees to work the line while I managed the customer orders and purchased materials." Ruben paused. "But I can't take the Elmore project for granted. It might not always be there. I'll have to have a good alternate plan if that day comes." -In evaluating different market segments, a firm should look at three factors: segment size and growth, segment structural attractiveness, and company objectives and resources.