Exam 2: Consumer Segmentation and Positioning

_____ is the measurement of lifestyle, typically defined in terms of activities, interests, and opinions.

According to your readings, 7Up Soda has successfully competed in the soft drink product category by pursuing a "turn a disadvantage into an advantage" positioning strategy.

_____ is when products offered by the same firm are so similar they compete among themselves.

Market segmentation allows a company to efficiently focus resources and efforts by avoiding those parts of the market it cannot satisfy well, thereby avoiding unwieldy competition.

Market size is a key factor that is overlooked when a manager commits the majority fallacy.

Retail operations, such as Pottery Barn Outlet Store, Williams-Sonoma Outlet Store, Designer's Store Warehouse, and Overstock.com, that aim at appealing to the "value segment" are segmenting the market based on price.

Demographic bases for segmenting consumer markets include customers' vital population statistics, such as age, gender, income, and education.

If all humans were the same in their preferences and behaviors, market segmentation would not be needed.

Cannibalization is the phenomenon that as market segmentation increases, sales increase; but as market segmentation increases, costs also increase.

The four elements of the marketing mix are:

Cindy, Bob, and Tina are all college students. Cindy is a music major. While she enjoys composing and playing her own music, she doesn't have strong ambitions toward having a career. Ideally, she would like to find a nice guy (but not a business major), get married, move out to the country so she can have a garden and maybe even a horse, and teach piano lessons out of her home. Bob is currently a finance major, after recently changing from management. (He has also been a political science major and an engineering major - they all seem cool, but none of the majors seem to be able to hold his interest.) Besides changing majors, Bob loves to play club sports, really enjoys going to bars and socializing with his fraternity brothers, and considers himself to be fairly "hip" and "cool." Tina is an education major. Like Cindy, she eventually wants to settle down, get married, and have children, although she wants to work with children as a school teacher. Ideally, she would like to move back to her small-town home, where the rest of her family lives. She often goes home on the weekends because her strong Christian religion doesn't condone drinking and "partying." Based on the descriptions provided above and according to the VALS segments, which student most likely belongs to the "makers" segment?

Identify and describe 3 examples of segmentation based on demographics.

The first brand to enter a new market often enjoys a long-term consumer preference advantage over follower brands. This phenomenon is known as what?

Procter and Gamble offers a $1.00 coupon when consumers purchase three bottles of Pantene brand shampoo. This strategy represents segments based on geo-demographics.

A target market is simply the segment(s) toward which a firm's marketing efforts are directed.

The four elements of the marketing mix are product, price, position, and place.

Targeting is the process of communicating with our market segments through the use of marketing mix variables in such a way as to help consumers differentiate our product from our competition.

Home Depot, a home-improvement retail chain, sells scorpion traps in its stores in New Mexico, Texas, Arizona, and California. This is an example of geographic segmentation.

People that live near one another often become more alike over time.

Market aggregation is the process of dividing the large and diverse market into subsets of consumers who share common needs, characteristics, or behaviors.