Exam 9: Market Segmentation, Targeting and Positioning

John runs a small bottle shop in inner- city Sydney. To avoid the big price discounters he has developed relationships with local residents and provides a free delivery and pickup service when they hold parties. He has also developed a relationship with local boaties who operate cruises around the harbour. Each of these groups of customers require a slightly different product range and pricing strategy. John is engaging in:

The Modern Group provides customers with a diverse range of home improvement products including, roofing, shutters, roller blinds, solar panels, pergolas and carports. A distinctive feature of all Modern products is that they include free delivery and installation. This is an example of:

Virgin Galactic plans to conquer outer space as the new tourist frontier by taking travellers on a four hour flight some 110 km above the earth where they will be able to experience weightlessness and see the curvature of the earth's surface. Virgin intends to charge $200,000 per flight for this experience. Virgin has identified the market for space tourism as high net worth individuals living in Scandinavia, Europe, North America and Oceania. This is an example of which type of segmentation?

Which of the following customer profiles uses demographic descriptors exclusively?

A manufacturer of toothpaste has segmented the market and developed distinct product offerings designed to appeal to the three different segments. One product offers all day protection from tooth decay; a second product offers whiter, brighter teeth; the third product offers all day mouth freshness and yet another product offers protection for sensitive teeth. Which approach to segmentation is the company MOST likely to have used?

Geographic segmentation is not feasible for products that are used in all geographic areas of Australia.

Manufacturers of the up- market motor vehicle, Lexus, target wealthy consumers with similar needs and buying behaviours, even though the consumers are located in different countries. This is an example of:

When McDonalds restaurants develop different products for kids and adults and devises different advertising messages for each of its core market segments, it is practising which approach to segmentation?

Briefly explain the steps in market segmentation, target and positioning.

Which of the available segmentation approaches do you think is most compatible with the spirit of the marketing concept? Defend your choice.

Concentrated marketing allows a firm to develop a strong position in the segment it serves, but may also increase the risk faced by the seller.

If a marketing manager segments the market into culture- oriented, sports- oriented, or outdoor- oriented groups, he or she is segmenting on the basis of:

Most marketers refuse to use gender as a segmentation variable for fear of an adverse public reaction.

A technique that can be used to define important market segments more precisely and involves using more than one segmentation variable is known as:

Instant breakfast products are promoted as nutritional alternatives to traditional breakfasts for active people on- the- go. The producers of such products have apparently segmented on a lifestyle and/or benefits- sought basis.

Mini Case 9- 1 A group of investors are thinking of starting a for- profit institution to be called Heaven University. They have identified a small segment of society that is displeased with the high cost of HECS or upfront fees and is willing to forego all social and sporting extracurricular activities in order to get an inexpensive, quality education in three years. The university investors will advertise nationally. Its target audience is individuals between 18- 40 years of age, who have either never undertaken a University degree or who failed to complete a degree commenced within the last ten years. The investors want to attract students who are currently working at a job with which they are dissatisfied. Heaven will only offer three degree programmes, which cannot be modified to individual student needs. Research has shown that these are degrees that this market segment repeatedly seeks. Students can earn their degrees over the Internet and only have to attend a one- week seminar on campus twice a year. -Refer to Mini Case 9- 1. The investors discovered there was a segment of the population who was being passed over for promotions because they lacked a University degree. These people had always assumed getting a degree was impossible because they did not have the time to attend classes. What kind of segmentation variable BEST identifies this segment?

Benefit segmentation may well be the most powerful segmentation approach.

By segmenting the market, a firm can avoid the need for developing a variety of products and/or marketing mixes.

Which positioning strategy offers consumers a "good deal" by offering comparable quality products or services at a lower price?

Although the seller actively seeks to influence the process, the product's position is ultimately defined by the consumer.