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Chapter 7: Segmentation, Target Marketing, and Positioning
IV. END-OF-CHAPTER ANSWER GUIDE
Chapter Questions and Activities
CONCEPTS: TEST YOUR KNOWLEDGE
7-1 What is market fragmentation, and what are its consequences for marketers?
7-2 What is a target marketing strategy?
7-3 What is market segmentation, and why is it an important strategy in today’s marketplace?
Market segmentation is a process whereby marketers divide a large customer group into
7-4 List and explain the major demographic characteristics frequently used in segmenting
consumer markets.
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
Income and social class: the distribution of wealth has great interest to marketers
Race and ethnicity: membership in the various racial and ethnic groups within our
Geography: though not as dynamic as the other categories, geography does affect
7-5 Explain the process of consumer psychographic segmentation.
7-6 What is behavioral segmentation?
7-7 What are some of the ways marketers segment B2B markets?
7-8 List the criteria marketers use to determine whether a segment may be a good candidate for
targeting.
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
7-9 Explain the differences between undifferentiated, differentiated, concentrated, and customized
marketing strategies. What is mass customization?
Strategies include:
Undifferentiated marketing strategy: a marketing strategy that (1) assumes the majority
7-10 What is product positioning?
7-11 What do marketers mean by creating a brand personality? What examples can you come up
with of uses of brand anthropomorphism?
7-12 How do marketers use perceptual maps to help them develop effective positioning strategies?
ACTIVITIES: APPLY WHAT YOU’VE LEARNED
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
7-13 Creative Homework/Short Project You are an entrepreneur who is designing a new line of
boutique hotels located along Florida’s coastlines. Each of the 75 guest rooms in each hotel
will offer upscale decor, Wi-Fi, and iPod docks for a nightly rate of $299. The hotels will
have a spa, an on-site restaurant and a separate full-service bar that features local musicians.
Describe in detail the demographics—age, gender, family life cycle, income and social class,
ethnicity, and place of residence—of your target customer.
. MyMarketingLab for answers to Assisted Graded Questions
7-14 Creative Homework/Short Project As the marketing director for a company that is planning
to enter the B2B market for photocopy machines, you are attempting to develop an overall
marketing strategy. You have considered the possibility of using mass-marketing,
concentrated marketing, differentiated marketing, and custom marketing strategies.
7-15 In Class, 10–25 Minutes for Teams To better market the university to potential students, you
and your classmates have been asked to create a segment profile of the typical college
student at your school. Write up a descriptive segment profile, or “persona,” of the targeted
consumer. Share your description with the class.
7-16 In Class, 10–25 Minutes for Teams As an account executive for a marketing consulting firm,
your newest client is a university—your university. You have been asked to develop a
positioning strategy for the university. With your team, develop an outline of your ideas,
including the following:
a. Who are your competitors?
b. What are the competitors’ positions?
c. What target markets are most attractive to the university?
d. How will you position the university for those segments relative to the
competition?
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
7-17 For Further Research (Individual): A geographic information system (GIS) combines a
geographic map with digitally stored data about the consumers in a particular geographic
area. Using the web, find an example or case study of a business or nonprofit that is using a
GIS such as Google Earth to generate market information by location. Write a short summary
of this example or case study and present this summary to your class.
7-18 For Further Research (Individual) Select any consumer packaged goods company’s
product has been around for at least two decades and find at least five print advertisements from
throughout that time frame. From the marketing communication content, how has the product’s
target customers and positioning changed over time and why do you believe these changes have
occurred? If the product’s target customers or positioning have not changed, what might explain
the product’s ability remains the same in its targeting and positioning?
7-19 Creative Homework/Short Project Imagine you are the marketing director for a new soft
drink brand called Verve and that you have been charged with determining what kind of brand
personality the product should have in order for it to have broad appeal with members of
Generation Z. Describe the desired brand personality and identify specific elements of the
marketing mix (product, place, price, promotion) that should be implemented to assist in
establishing the desired brand personality.
APPLYING MARKETING METRICS
When it comes to metrics, good data about the characteristics of the various consumer
segments that you may wish to ultimately target is critical because target marketing is
ultimately a strategic investment of resources in the segments that appear to have the best
return on investment. In this chapter, you learned that VALSTM is a well-known approach to
psychographic segmentation.
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
7-20 To make the power of the psychographic technique and resulting information for decision
making come alive, let’s find out your own VALSTM category.
a. Go to the VALSTM website (either Google it or go directly to
www.strategicbusinessinsights.com
b. Click on “Take the VALSTM Survey.” Complete all the questions and click
SUBMIT to view your results.
c. What is your VALSTM type? Review the information on the website that describes
it (found under the tabs About VALSTM/VALSTM Types) along with the other
VALSTM types.
d. What is your reaction to learning your own VALSTM type? Are you surprised with
the result or was it what consistent with what you would have expected? Why or
why not?
e. What insights does the knowledge of your VALSTM type provide relative to your
own consumer behavior?
MyMarketingLab for answers to Assisted Graded Questions
CHOICES: WHAT DO YOU THINK?
7-21 Ethics Some critics of marketing have suggested that market segmentation and target
marketing lead to an unnecessary proliferation of product choices that wastes valuable
resources. These critics suggest that if marketers didn’t create so many different product
choices, there would be more resources to feed the hungry and house the homeless and
provide for the needs of people around the globe. Are the results of segmentation and target
marketing harmful or beneficial to society as a whole? Should firms be concerned about
these criticisms? Why or why not?
7-22 Critical Thinking One of the criteria for a usable market segment is its size. This chapter
suggested that to be usable, a segment must be large enough to be profitable now and in the
future and that some very small segments get ignored because they can never be profitable. So
how large should a segment be? How do you think a firm should go about determining if a
segment is profitable? Have technological advances made it possible for smaller segments to
be profitable? Do firms ever have a moral or ethical obligation to develop products for small,
unprofitable segments? When?
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
7-23 Ethics Marketers are in business to make a profit, but they also have an ethical obligation not
to take advantage of consumers, especially disadvantaged consumers like those at the bottom
of the pyramid. Would you consider it ethical to sell mosquito nets in Africa to prevent the
spread of malaria? Would you consider it ethical to sell Coca-Cola or Pepsi to consumers in
rural India? Why or why not? Is there a line between what is ethical to sell and what is not?
How would you describe that line?
7-24 Critical Thinking Sometimes marketers will develop strategies to target multiple social
class segments with the same product by offering it at different prices. What are some examples
of products or brands that use this strategy and how do they accomplish it? Are there any
potential risks to taking this approach with specific products or brands and what might make
some products or brands more susceptible to these kinds of risks?
7-25 Critical Thinking In this chapter, you learned about the use of geotargeting and its
capability to more precisely provide consumers with benefits such as promotions that are
especially relevant and impactful to a particular group. Could geotargetting backfire for a
company? What might be some examples where geotargetting has negative reactions or
onsequences and what might be the impact on the company’s image?
7-26 Critical Thinking A few years ago, Anheuser-Busch Inc. created a new division dedicated to
marketing to Hispanics and announced it would boost its ad spending in Hispanic media by
two-thirds to more than $60 million, while Miller Brewing Co. signed a $100 million,
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
three-year ad package with Spanish-language broadcaster Univision. But Hispanic activists
immediately raised public health concerns about the beer ad blitz on the grounds that it
targets a population that skews young and is disproportionately likely to abuse alcohol.
Surveys of Hispanic youth show that they are much more likely to drink alcohol, get drunk,
and engage in binge drinking than their white or black peers. A senior executive at
Anheuser-Busch responded, “We would disagree with anyone who suggests beer billboards
increase abuse among Latino or other minority communities. It would be poor business for us
in today’s world to ignore what is the fastest-growing segment of our population.”
a. Manufacturers of alcohol and tobacco products have been criticized for targeting
unwholesome products to certain segments of the market—the aged, ethnic minorities,
the disabled, and others. Do you view this as a problem? Should a firm use different
criteria in targeting such groups? Should the government oversee and control such
marketing activities?
7-27 Ethics Gamification was discussed in Chapter 6. For specific segments of a market, a
gamification approach might help elicit a desired behavior from consumers, and of course in
many cases the desired behavior is an increase in consumption of the related product. When a
product is generally associated with potential health problems if consumed in large quantities
(e.g., alcohol, sugar), should a marketer be allowed to engage the consumer in gamification
activities or similar “fun” approaches that encourage or induce excessive consumption of the
product?
7-28 Critical Thinking Marketers commonly ask celebrities to endorse products, but tying a
brand to a celebrity can come with risks if that celebrity falls out of favor with the public as the
result of a something they do or say that is perceived negatively. How would you determine if the
signing of a celebrity to an endorsement deal is worth the risk? What would you want to know to
make that determination and reduce the risk potential? Students can engage in a lively debate on
the pros and cons of tying celebrities to a brand.
MINIPROJECT: LEARN BY DOING
This miniproject will help you to develop a better understanding of how firms make target
marketing decisions. The project focuses on the market for men’s athletic shoes.
a. Gather ideas about different dimensions useful for segmenting the men’s athletic shoes
market. You may use your own ideas, but you probably will also want to examine advertising
and other marketing communications developed by different athletic shoe brands.
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
b. Based on the dimensions for market segmentation that you have identified, develop a
questionnaire and conduct a survey of consumers. You will have to decide which questions
should be asked and which consumers should be surveyed.
c. Analyze the data from your research and identify the different potential segments.
d. Develop segment profiles that describe each potential segment.
e. Generate several ideas for how the marketing strategy might be different for each segment
based on the profiles.
f. Define your competitive advantage.
7-29 Develop a presentation (or write a report) outlining your ideas, your research, your findings, and
your marketing strategy recommendations.
There are five specific questions individuals or marketing teams are asked to review: 1.
Different dimensions of segmenting the athletic shoes market: 2. Develop a questionnaire and
conduct a survey of consumers 3. Analyze data and identify potential segments 4. Develop
segment profiles that describe each potential segment, 5. Generate ideas on how marketing
strategy might be applied to each segment based on profiles.
Students (or student teams) should research this industry carefully before proceeding with the
mini-project. Before conducting any human subject research, students or teams should
familiarize themselves with the rules for interviewing and conducting research (see any
appropriate university or college guidelines).
Instructors may wish to extend the deadline for this assignment so students have many
opportunities to conduct the research and report the findings.
V. MARKETING IN ACTION CASE: REAL CHOICES AT
SPRIG
Summary of Case
Sprig is an on-demand delivery restaurant that offers balanced meals which are fully prepared
and delivered in 15 to 20 minutes. The company focuses on using the freshest ingredients to
create innovatively delicious food that supports a healthy lifestyle. Sprig gives the
health-conscious consumer better choices without compromising speed or convenience.
The on-demand delivery segment of the restaurant industry is developing. Munchery delivers
fresh, food entrees, sides, desserts, drinks, and kids’ meals in San Francisco, New York, Los
Angeles, and Seattle, delivered with directions on how to successfully complete a dish.
Postmates operates a network of local couriers to deliver meals through a service called Pop that
delivers in 15 minutes. Even Uber is in the market with Ubereats, its own on-demand meal
delivery service
So what’s next for Sprig? Are they on the right track targeting only the smaller health-conscious
segment of on-demand delivery? The on-demand delivery market is expected to experience a
shake-out among competitors with only a few competitors remaining. How does Sprig become
one of those few that survives?
Suggestions for Presentation
This case could be assigned for various out-of-class or in-class discussion activities.
Out-of-Class
Research Sprig via their website. Identify their current positioning and describe how they have
implemented the strategy.
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
Evaluate if there are expansion opportunities for the on-demand delivery segment of the healthy
food restaurant industry.
In-Class
Companies with competing interests in this market include Uber, Munchery, and Postmates.
Evaluate each of their strengths and weaknesses.
Discuss how targeted marketing can help identify the market segment that would be interested in
this market.
Conduct a brainstorming session to identify the key characteristics of potential customers that
would seek Sprig’s products.
You Make the Call
7-30 What is the decision facing Sprig?
Students may come up with a number of different decisions that Sprig might make such as:
7-31 What factors are important in understanding this decision situation?
The following factors are important in understand this decision situation:
What customer development strategies should Sprig use in increase market share?
Should Sprig use geotargeting to identify potential customers?
7-32 What are the alternatives?
Students might recommend a variety of different marketing strategies. Some possibilities are:
Conduct research to evaluate how Sprig is positioned against other competitors in the
on-demand restaurant industry.
7-33 What decision(s) do you recommend?
7-34 What are some ways to implement your recommendations?
MYMARKETINGLAB
Copyright © 2018 Pearson Education, Inc.
Chapter 7: Segmentation, Target Marketing, and Positioning
www.mymktlab.com for Auto-graded writing questions as well as the following assisted-graded
writing questions:
7-35 Creative Homework/Short Project Assume that a small regional microbrewery has hired you
to help them with their target marketing. They are pretty unsophisticated about marketing—you
will need to explain some things to them and provide ideas for their future. In the past, the
microbrewery has simply produced and sold a single beer brand to the entire market—a
mass-marketing strategy. As you begin work, you come to believe that the firm could be more
successful if it developed a target marketing strategy. Write a memo to the owner outlining the
following:
a. The basic reasons for doing target marketing in the first place
b. The specific advantages of a target marketing strategy for the microbrewery
c. An initial “short list” of possible target segment profiles
7-36 Creative Homework/Short Project You have been a contributing author to several
marketing newsletters, and you have been asked to submit a one-page article on market
Copyright © 2018 Pearson Education, Inc.
