QUIZ (10 %)

Answer the following questions:

1. How does market segmentation differ from market targeting? (5 marks)

Answer:
Market segmentation involves dividing a market into smaller groups of buyers with distinct
needs, characteristics, or behaviors that might require separate marketing strategies or mixes.
The company identifies different ways to segment the market and develops profiles of the
resulting market segments. Market targeting (or targeting) consists of evaluating each
market segments attractiveness and selecting one or more market segments to enter.

2. Name and describe the four major sets of variables that might be used in segmenting
consumer markets. (8 marks)
Answer:
Consumer markets are typically segmented using four major variables: geographic,
demographic, psychographic, and behavioral variables.
Geographic segmentation calls for dividing the market into different geographical units
such as nations, regions, states, counties, cities, or even neighborhoods.
Demographic segmentation divides the market into groups based on variables such as age,
gender, family size, family life cycle, income, occupation, education, religion, race,
generation, and nationality.
Psychographic segmentation divides buyers into different groups based on social class,
lifestyle, or personality characteristics. People in the same demographic group can have very
different psychographic makeups.
Behavioral segmentation divides buyers into groups based on their knowledge, attitudes,
uses, or responses to a product. Buyers can be grouped according to (1) occasions when they
get the idea to buy, actually make their purchase, or use the purchased item, (2) the benefits
people look for in the product class, (3) user status (nonusers, ex-users, potential users, first-
time users, and regular users of a product), (4) usage rate (light, medium, and heavy product
users), and (5) loyalty status.

3. Name and describe the levels at which market targeting can be carried out. Give an
example of a company using each. (12 marks)
Market targeting can be carried out at several different levels. Companies can target very
broadly (undifferentiated marketing), very narrowly (micromarketing), or somewhere in
between (differentiated or concentrated marketing). Using an undifferentiated marketing (or
mass marketing) strategy, a firm might decide to ignore market segment differences and
target the whole market with one offer. Such a strategy focuses on what is common in the
needs of consumers rather than on what is different. The company designs a product and a
marketing program that will appeal to the largest number of buyers. Using a differentiated
marketing (or segmented marketing) strategy, a firm decides to target several market
segments and designs separate offers for each. Toyota Corporation produces several different
brands of carsfrom Scion to Toyota to Lexuseach targeting its own segments of car
buyers. And P&G markets six different laundry detergent brands in the United States, which
compete with each other on supermarket shelves. Using a concentrated marketing (or niche
marketing) strategy, instead of going after a small share of a large market, a firm goes after a
large share of one or a few smaller segments or niches.
(The examples may vary)