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Chapter 8 ♦ Segmenting and Targeting Markets 1
CHAPTER 8 Segmenting and Targeting Markets
This chapter begins with the learning outcome summaries, followed by a set of lesson plans for you to use to
deliver the content in Chapter 8.
• Lecture (for large sections) on page 3
• Company Clips (video) on page 5
• Group Work (for smaller sections) on page 6
Review and Assignments begin on page 7
Review questions
Application questions
Application exercise
Ethics exercise
Video Assignment
Case assignment
Great Ideas for Teaching Marketing from faculty around the country begin on page 17
2 Chapter 8 ♦ Segmenting and Targeting Markets
LEARNING OUTCOMES
8-1 Describe the characteristics of markets and market segments
A market is composed of individuals or organizations with the ability and willingness to make purchases to fulfill their
needs or wants. A market segment is a group of individuals or organizations with similar product needs as a result of one
or more common characteristics.
8-2 Explain the importance of market segmentation
Before the 1960s, few businesses targeted specific market segments. Today, segmentation is a crucial marketing strategy
for nearly all successful organizations. Market segmentation enables marketers to tailor marketing mixes to meet the
needs of particular population segments. Segmentation helps marketers identify consumer needs and preferences, areas
of declining demand, and new marketing opportunities.
8-3 Discuss criteria for successful market segmentation
Successful market segmentation depends on four basic criteria: 1) a market segment must be substantial and have enough
potential customers to be viable, 2) a market segment must be identifiable and measurable, 3) members of a market
segment must be accessible to marketing efforts, and 4) a market segment must respond to particular marketing efforts in
a way that distinguishes it from other segments.
8-4 Describe the bases commonly used to segment consumer markets
Five bases are commonly used for segmenting consumer markets. Geographic segmentation is based on region, size,
density, and climate characteristics. Demographic segmentation is based on age, gender, income level, ethnicity, and
family life cycle characteristics. Psychographic segmentation includes personality, motives, and lifestyle characteristics.
Benefits sought is a type of segmentation that identifies customers according to the benefits they seek in a product.
Finally, usage segmentation divides a market by the amount of product purchased or consumed.
8-5 Describe the bases for segmenting business markets
Business markets can be segmented on two general bases. First, businesses segment markets based on company
characteristics, such as customers’ geographic location, type of company, company size, and product use. Second,
companies may segment customers based on the buying processes those customers use.
8-6 List the steps involved in segmenting markets
Six steps are involved when segmenting markets: 1) selecting a market or product category for study; 2) choosing a basis
or bases for segmenting the market; 3) selecting segmentation descriptors; 4) profiling and evaluating segments; 5)
selecting target markets; and 6) designing, implementing, and maintaining appropriate marketing mixes.
8-7 Discuss alternative strategies for selecting target markets
Marketers select target markets using three different strategies: undifferentiated targeting, concentrated targeting, and
multisegment targeting. An undifferentiated targeting strategy assumes that all members of a market have similar needs
that can be met with a single marketing mix. A concentrated targeting strategy focuses all marketing efforts on a single
market segment. Multisegment targeting is a strategy that uses two or more marketing mixes to target two or more
market segments.
8-8 Explain how CRM can be used as a targeting tool
Companies that successfully implement CRM tend to customize the goods and services offered to their customers based
on data generated through interactions between carefully defined groups of customers and the company. CRM relies on
four things to be successful: personalization, time savings, loyalty, and technology. Although mass marketing will
probably continue to be used, the advantage of CRM cannot be ignored.
Chapter 8 ♦ Segmenting and Targeting Markets 3
8-9 Explain how and why firms implement positioning strategies and how product differentiation
plays a role
Positioning is used to influence consumer perceptions of a particular brand, product line, or organization in relation to
competitors. The term position refers to the place that the offering occupies in consumers’ minds. To establish a unique
position, many firms use product differentiation, emphasizing the real or perceived differences between competing
offerings. Products may be differentiated on the basis of attribute, price and quality, use or application, product user,
product class, or competitor.
TERMS
benefit segmentation
market segment
product differentiation
cannibalization
market segmentation
psychographic segmentation
concentrated targeting strategy
multisegment targeting strategy
repositioning
demographic segmentation
niche
satisficers
80/20 principle
optimizers
segmentation bases (variables)
family life cycle (FLC)
perceptual mapping
target market
geodemographic segmentation
position
undifferentiated targeting strategy
geographic segmentation
positioning
usage-rate segmentation
market
LESSON PLAN FOR LECTURE
Brief Outline and Suggested PowerPoint Slides:
Learning Outcomes and Topics
PowerPoint Slides
LO1 Describe the characteristics of markets and market
segments
8-1 Markets and Market Segments
1: Segmenting and Targeting Markets
2: Learning Outcomes
3: Learning Outcomes
4: Markets and Market Segments
5: Characteristics of a Market
6: Market Segmentation
7: The Concept of Market Segmentation
LO2 Explain the importance of market segmentation
8-2 The Importance of Market Segmentation
8: The Importance of Market Segmentation
9: The Importance of Market Segmentation
LO3 Discuss criteria for successful market segmentation
8-3 Criteria for Successful Segmentation
10: Criteria for Successful Segmentation
11: Criteria for Segmentation
4 Chapter 8 ♦ Segmenting and Targeting Markets
Learning Outcomes and Topics
PowerPoint Slides
LO4 Describe the bases commonly used to segment
consumer markets
8-4 Bases for Segmenting Consumer Markets
12: Bases for Segmenting Consumer Markets
13: Bases for Segmentation
14: Geographic Segmentation
15: Benefits of Regional Segmentation
16: Demographic Segmentation
17: Age Segmentation
18: Gender Segmentation
19: Income Segmentation
20: Ethnic Segmentation
21: Family Life Cycle
22: Exhibit 8.1: Family Life Cycle
23: Psychographic Segmentation
24: Bases for Psychographic Segmentation
25: Personality and Motive Segmentation
26: Lifestyle Segmentation
27: Geodemographic Segmentation
28: Benefit Segmentation
29: Usage-Rate Segmentation
LO5 Describe the bases for segmenting business
markets
8-5 Bases for Segmenting Business Markets
30: Bases for Segmenting Business Markets
31: Bases for Segmenting Business Markets
32: Company Characteristics
33: Buying Processes
34: Buyer Characteristics
LO6 List the steps involved in segmenting markets
8-6 Steps in Segmenting a Market
35: Steps in Segmenting a Market
36: Steps in Segmenting Markets
LO7 Discuss alternative strategies for selecting target
markets
8-7 Strategies for Selecting Target Markets
37: Strategies for Selecting Target Markets
38: Target Market
39: Strategies for Selecting Target Markets
40: Undifferentiated Targeting Strategy
41: Undifferentiated Targeting Strategy
42: Concentrated Targeting Strategy
43: Concentrated Targeting Strategy
44: Multisegment Targeting Strategy
45: Multisegment Targeting Strategy
46: Costs of Multisegment Targeting Strategy
LO8 Explain how CRM can be used as a targeting tool
8-8 CRM as a Targeting Tool
47: CRM as A Targeting Tool
48: CRM
49: CRM Trends
LO9 Explain how and why firms implement positioning
strategies and how product differentiation plays a
role
8-9 Positioning
50: Positioning
51: Positioning
52: Positioning of Procter & Gamble Detergents
53: Effective Positioning
54: Product Differentiation
55: Perceptual Mapping
56: Positioning Bases
57: Repositioning
58: Chapter 8 Video
Suggested Homework:
• The end of this chapter contains assignments for the Numi Organic Tea video and the Harley Davidson case.
• This chapter’s online study tools include flashcards, visual summaries, practice quizzes, and other resources that can
be assigned or used as the basis for longer investigations into marketing.
Chapter 8 ♦ Segmenting and Targeting Markets 5
LESSON PLAN FOR VIDEO
Company Clips
Segment Summary: Numi Organic Tea
Numi Organic Tea describes how its sampling program helps position the brand with its target markets. Its premium
position ties naturally into the customer outlined in the film, but Numi is also interested in expanding outside of the
major tea drinker into more casual tea drinkers.
PRE-CLASS PREP FOR YOU:
PRE-CLASS PREP FOR YOUR STUDENTS:
• Preview the Company Clips video segment for
Chapter 8. This exercise reviews concepts for LO1,
LO2, LO3, LO4, and LO5.
• Review your lesson plan.
• Make sure you have all of the equipment needed to
show the video to the class, including the DVD and a
way to project the video.
• Or you can stream the video HERE
• Have students take notes on the following terms and
concepts: market segment, market segmentation,
segmentation criteria, bases for segmenting consumer
markets, steps in segmenting a market, target strategy,
and positioning.
• Assign students to locate a couple of premium coffee/tea
stores in their area, and using either the phone or the
Internet, have them research how they position
themselves in their market.
VIDEO REVIEW EXERCISE
ACTIVITY
Warm Up
• Begin class with a review of the criteria for successful segmentation. Ask students to brainstorm to
anticipate Numi’s segmentation scheme, given its premium tea products.
In-class
Preview
• On the board, copy the top-level details of the map of consumer market segments. Do not fill in
the entire map. Review the five bases with the class, if needed.
• Have students copy your work onto a sheet of paper that they can use to take notes while watching
the video.
• Tell students that they may use any notes they made when they were familiarizing themselves
with the key terms and concepts from their pre-class work.
• Explain that they are to gather data from the video to “map” Numi’s segmentation variables.
Viewing
(Solutions
below.)
1. In the first part of the video, Jen Mullin, the vice president of Marketing for Numi Organic
Tea, clearly describes their typical customer. Who is that customer and how did the Numi
marketing team figure that out?
2. What is Numi's principle marketing plan? In what way does Numi's marketing team use
what they know about their target demographic to implement their marketing plan?
Follow-up
• Have students research and prepare a one-page report on Numi Organic Tea market strategies and
positioning. Students must cite their work and print out or copy a page that clearly advertises to
this market segment with labels identifying marketing bases or variables evident in the ad.
6 Chapter 8 ♦ Segmenting and Targeting Markets
Solutions for Viewing Activities:
1. In the first part of the video, Jen Mullin, the vice president of Marketing for Numi Organic Tea, clearly
describes their typical customer. Who is that customer and how did the Numi marketing team figure that
out?
2. What is Numi's principle marketing plan? In what way does Numi's marketing team use what they
know about their target demographic to implement their marketing plan?
Numi’s marketing plan includes providing opportunities for potential customers to sample their teas, rather than
LESSON PLAN FOR GROUP WORK
In most cases, group activities should be completed after some chapter content has been covered, probably in the second
or third session of the chapter coverage. (See “Lesson Plan for Lecture” above.)
Class Activity – Bank Marketing
Give students the following statistics about the identity of depositors at banks in the United States.
Age Group
Percent of
Households
Percent of
Deposits
15-24
6
Less than 1
25-34
23
6
35-44
21
14
45-54
15
14
55 and over
35
66
Ask students who they think the banks should be targeting and why. Who should the banks be targeting for the future?
What can the banks do to appeal to their chosen market or markets? How do the segments differ in their needs for
services?
Have your class brainstorm ideas of services to offer. Possible services include:
✓ Free checking accounts
✓ Safety-deposit boxes
✓ Free credit cards
✓ Low interest rates on installment loans
✓ High interest rates on checking and savings accounts
✓ High-interest certificates of deposit
✓ Pre-approved car loans
✓ Aid in formulating budget and savings plans
✓ Lines of credit
✓ Seminars on financial planning, health, and travel
✓ Traveler’s checks
Chapter 8 ♦ Segmenting and Targeting Markets 7
Can the students think of other services to offer? Banks have selected and bundled these services into packages to appeal
to certain market segments. How would the class bundle these services for the different segments?
Factors to remember: The “30-something” consumer is in the prime borrowing years, and customers will inevitably
move from being borrowers to being savers and investors with time.
REVIEW AND ASSIGNMENTS FOR CHAPTER 8
REVIEW QUESTIONS
1. You are the marketing manager for a specialty retailer that sells customized handbags. Write a memo to your
boss describing how the company could benefit from implementing a CRM system and some ideas for
collecting data from customers in an innovative way.
Students’ answers will vary. Possible reasons include stocking styles customers like and managing databases to send
2. Choose a product category (e.g., blue jeans) and identify at least three different brands and their respective
positioning strategies. How is each position communicated to the target audience?
APPLICATION QUESTIONS
1. Mercedes is thinking about advertising its cars to college students. Do you think that college students are a
viable potential market for Mercedes? Why or why not?
Why college students WOULD be a viable market: A large percentage of college students today work full- or part-
time and make a lot more money than college students of yesteryear. Thus, they have more disposable income and
2. How are visitors to the following Web site segmented when seeking relevant job openings? Try this search
engine and report your results: http://www.careermag.com/.
The Web site uses both consumer and business target markets and segments the market in several different ways,
3. As a marketing consultant for a chain of hair salons, you have been asked to evaluate the kids’ market as a
potential segment for the chain to target. Write a memo to your client showing your evaluation of the kids’
segment against the four criteria for successful market segmentation.
The criteria for successful market segmentation that should appear in students’ answers are: 1) substantiality (Is the
4. Choose magazine ads for five different consumer products. For each ad, write a description of what you think
the demographic characteristics of the targeted market are.
5. Investigate how Delta Airlines uses its Web site, http://www.delta-air.com/, to cater to its market segments.
Delta uses usage-rate and benefit segmentation in its Web site. The market segments that are obvious in Delta’s
6. Choose five ads from business publications such as the Wall Street Journal, Fortune, or Bloomberg
BusinessWeek. For each ad, write a description of how you think the company has segmented the business
market.
Students’ answers should contain the bases on which segmentation was done: the bases for segmenting business
7. Write a letter to the president of your bank suggesting ideas for increasing profits and enhancing customer
service by improving segmentation and targeting strategies. Make your suggestions specific.
8. Form a team with two or three other students. Create an idea for a new product. Describe the segment (or
segments) you are going to target with the product and explain why you chose the targeting strategy you did.
Students should clearly describe a market segment as a subgroup of people or organizations sharing one or more
Chapter 8 ♦ Segmenting and Targeting Markets 9
9. Go to the Web sites of JCPenney, http://www.jcpenney.com, and Target, http://www.target.com. Compare
which is more product-focused and which is more brand focused. Which company’s approach do you think
will appeal more to the “Holy Grail” target market of 25- to 35-year-old women?
Students’ answers will vary widely.
10. Is it possible to identify a single market for two distinctly different products? For example, how substantial
is the market comprised of consumers who use Apple and who drive Volkswagens? Can you think of other
product combinations that would interest a single market? (Do not use products that are complementary, like
a bike and a bike helmet. Think of products, like the iPod and the car, that are very different.) Complete the
following sentences and describe the market for each set of products you pair together.
Consumers of:
Propel fitness water could also be a target market for ______________.
Proactiv Solution skin care products could also be a target market for ______________.
Alienware computers could also be a target market for ______________.
Specialty luggage tags could also be a target market for _______________.
Students’ answers will vary.
APPLICATION EXERCISE
How tightly do you fit into a particular market segment? Do you think you can be neatly classified? If you think your
purchasing habits make you an enigma to marketers, you may need to think again.
Activities
1. Have students visit the following website: http://geography.about.com/od/obtainpopulationdata/a/claritas.htm. Click on the
“You Are Where You Live” link and type in your zip code.. The database will generate many cluster descriptions
based on your ZIP code. Depending on the functionality of the Web site at the time you access the database,
you may need to reenter your ZIP code multiple times if you want to read all the cluster descriptions.
2. Now pick a product category, such as automobiles, athletic shoes, beverages, or health and beauty products.
Then think about which products in that category would appeal to each of the clusters generated by your ZIP
code search. For example, a car that appeals to a cluster titled “Young Bohemians” may not be the car of choice
for the cluster “Pools and Patios.” If your search generated only one cluster type, you may wish to enter other
ZIP codes for your area of town or for your region.
3. Create a perceptual map for the product you chose. Write a short statement that describes the overall position of
each product with an explanation of why you located it where you did on the perceptual map.
Purpose: This exercise quickly shows students the limitations of using only demographics to describe their customers,
and really clarifies the process of segmentation and positioning for them.
Setting It Up: Form groups of five to eight persons. Instruct each group to pick a product category, preferably
something they are familiar with (see suggestions below). Plan about 15 minutes for the exercise.
10 Chapter 8 ♦ Segmenting and Targeting Markets
This exercise was inspired by the following Great Idea in Teaching Marketing:
Kim McKeage
University of Maine
STUDENTS PRACTICE MAKING MARKET/PRODUCT GRIDS ON THEMSELVES
This in-class project has students use a segmentation scheme that they have already studied. This could include:
• VALS
• Lifestyle
• Price Sensitivity
• Quality Sensitivity
• Attributes/Features Desired
• Involvement
• Demographics
• Geographic Region
• Product Usage (heavy vs. light users)
If students wish to use VALS, I instruct them ahead of time to get on the internet and access the VALS survey online so
that they can determine their type.
On the day when we do this exercise, students form groups of five to eight persons. The group is instructed to pick a
product category. I recommend the following categories to them as items they might be familiar with:
• Automobiles (cars, trucks, SUVs, etc.)
• Athletic Shoes
• Recreational Products (sports equipment, hiking gear, etc.)
• Entertainment Products (movies, CDs, etc.)
• Food (packaged, grocery, or restaurants)
• Computer Software/Hardware
• Clothing
Students then have to describe which market segments are represented in their group according to the segmentation
scheme(s) they chose to use. They must also develop a market/product grid to describe how to target different products
(within their chosen category) toward the different market segments represented within their group. The product
positions can be for existing products or imagined products (especially if no existing product fits a position they want).
Students must discuss the general overall “position” of the product and, for fantasy products, how they would
accomplish that positioning. For example, if they want to position an athletic shoe as a “performance” (overall position)
shoe, they might show advertisements with sports professionals using the shoe under demanding circumstances. To get
credit on the exercise, students must write up a complete market/product grid with their accompanying notes. Some of
the groups present their solution to the class.
This exercise quickly shows students the limitations of using only demographics to describe their customers, and really
clarifies the process of segmentation and positioning for them.
Chapter 8 ♦ Segmenting and Targeting Markets 11
ETHICS EXERCISE
Tobacco companies are frequently criticized for targeting potential customers below the legal age to purchase and use
their products. Critics cite Joe Camel and the Marlboro man as images meant to make smoking appealing to young
people. If tobacco companies are actually following this particular demographic targeting strategy, most would agree that
it is unethical if not illegal.
1. Is marketing tobacco products to younger consumers unethical?
Marketing tobacco products to younger consumers is unethical insofar as they are more susceptible to being swayed
2. Many are beginning to argue that fast-food companies, such as McDonald’s and Burger King, are knowingly
marketing unhealthy food to consumers. Is it unethical for fast-food companies to market kids’ meals to
children?
Marketing fast food to children is becoming an increasingly hot debate, as time-pressed parents are relying on
3. What does the AMA Statement of Ethics have to say about marketing unhealthy or harmful products to
consumers, particularly children and young adults? Go to the AMA Web site at
http://www.marketingpower.com to review the statement. Write a brief paragraph summarizing where the
AMA stands on this important issue.
The first rule mentioned in the AMA Statement of Ethics is this: The marketer must not knowingly do harm.
Additionally, the statement says that in the area of product development, the marketer must disclose all substantial
VIDEO ASSIGNMENT: Numi Organic Tea
1. Jen Mullin, the vice president of Marketing for Numi Organic Tea, describes their typical customer
as a female, college-educated tea lover, possibly an “eco-mom.” What type of market segmentation
has she used to identify this customer group?
a. Geographic segmentation
b. Demographic segmentation
c. Ethnic segmentation
d. Psychographic segmentation
2. Another way Numi Organic Tea identifies potential customers is through what they want from the
product; they are looking for organic, fair-trade, premium quality tea, according to the video. What
type of market segmentation is used to identify customers in this way?
a. Geographic segmentation
b. Demographic segmentation
c. Benefit segmentation
d. Usage-rate segmentation
3. True or False? Numi’s marketing plan includes providing opportunities for potential customers to
sample their teas, rather than the more traditional print and television advertising. Using this
method, Numi wants to get samples of their tea to a wide variety of different types of consumers, to
attract new customers from many different groups.
4. Because Numi Organic Tea has identified more than one target market, for example, “eco-moms,”
college students, and family travelers, they should be particularly aware of the
____________________, which helps explain how consumption patterns differ at different stages
determined by a combination of age, marital status, and the presence or absence of children.
a. Family life cycle
b. 80/20 principle
c. Undifferentiated targeting strategy
d. Concentrated targeting strategy
5. True or False? When Jen Mullin explains that her company’s tea is sought after as a product to
include in gift bags and other promotional giveaways by companies and other organizations, she is
recognizing the companies who ask Numi to provide tea samples as optimizers.
Chapter 8 ♦ Segmenting and Targeting Markets 13
6. Mullin talks about ___________________ the Numi brand, developing a specific marketing mix that
will influence potential customers’ overall perception of the brand, by targeting natural health food
stores, university coffee shops, and fine dining establishments.
a. Segmenting
b. Satisficing
c. Optimizing
d. Positioning
7. True or False? To graphically map the “channel conflict” between marketing Numi Tea to premium
spas, hotels, and restaurants and selling the same brand at mass market stores such as Target, the
company could employ perceptual mapping.
8. The demographic variable that Numi Tea marketers were examining when they recognized that
people who had discovered their product at a high-end spa or fine restaurant often shopped for
groceries at Costco was _________________________.
a. Age
b. Income
c. Ethnicity
d. Gender
9. Numi Tea uses premium ingredients to create a premium tea at an affordable price, according to Jen
Mullin. This is a form of ______________________ that the company uses to distinguish their
products from those of competitors.
a. Perceptual mapping
b. One-to-one marketing
c. Product differentiation
d. Market segmentation
10. Which of the following is the least likely targeting strategy that Numi Tea would select to market
their products?
a. Undifferentiated targeting
b. Concentrated targeting
c. Multisegment targeting
CASE ASSIGNMENT: Harley Davidson
Long associated with biker culture, Harley Davidson evokes images of carefree, rebellious, even lawless riders wearing
long beards and leather vests, cruising across the country while living by their own rules. The company’s typical
customer is a white, 47-year-old man, and while Harley Davidson has an extremely loyal customer base, its brand has
little cachet with people outside of this demographic. Such a limited (and rapidly aging) market does not bode well for
the company’s future.
In a bid to solidify its future, Harley Davidson is looking to expand its customer base. According to CEO Keith
Wandell, the company aims to boost the number of riders and consumers outside of the company’s core customer group
of white men over the age of 35 by marketing its motorcycles and accessories to women. This extended campaign
consists of numerous programs, social events, Web sites, and design changes, all expressly aimed at making the Harley
Davidson experience seem like an attractive and thrilling hobby for women. For example, the company hosts a series of
garage parties throughout its nationwide network of dealers. The parties are a social gathering for women, where they
can sip on wine and enjoy appetizers while motorcycle enthusiasts share about the thrills of riding a Harley.
Even as it expands its customer base to a new market segment, Harley is taking care not to alienate its core male
customer base or to dilute its rebellious image. To maintain its appeal to white, middle-aged riders, Harley recently
introduced the three-wheel Ultra Classic Trike, which was designed to be easier to control for older people who may
have a reduced sense of balance. In a similar vein, Harley’s marketing chief Mark-Hans Richer says "We're trying to be
our thing to more people."
Alexandra Straub, “Harley Party Helps Introduce Women to Bikes,” The Gazette, February 24, 2013,
www.montrealgazette.com/Harley+party+helps+introduce+women+bikes/8009187/story.html (Accessed March 26,
2013); Barbara Vilacis, “Harley Celebrates Women Riders,” Ultimate Motorcycling, May 3, 2012,
www.ultimatemotorcycling.com/2012/harley-celebrates-women-riders (Accessed March 26, 2013); Rich Rovito,
“Harley-Davidson Launches Women Riders Month,” The Business Journal, May 4, 2012,
www.bizjournals.com/milwaukee/blog/2012/05/harley-davidson-launches-women-riders.html (Accessed March 26,
2013).
TRUE/FALSE
1. Harley Davidson’s new Ultra Classic Trike is part of a market.
Chapter 8 ♦ Segmenting and Targeting Markets 15
PTS: 1 OBJ: LO: 8-1 TOP: AACSB: Reflective Thinking
KEY: CB&E Model: Customer MSC: BLOOMS: Level I Knowledge
2. Garage parties and other forms of marketing aimed at women suggest that Harley Davidson has begun engaging in
market segmentation.
3. Based on the case, Harley Davidson has focused primarily on geographic segmentation.
4. A satisficer would likely look up the closest Harley Davidson dealership and buy from there without visiting other
dealerships in the area.
5. Harley Davidson’s effort to expand its customer base by marketing its motorcycles and accessories to women is an
example of repositioning.
MULTIPLE CHOICE
1. Which of the following is not a likely demographic factor of Harley Davidson’s traditional market?
a.
Middle-income.
b.
Caucasian.
c.
Married with children.
d.
Easygoing personality.
e.
All of these are demographic factors.
2. Which of the following steps should Harley Davidson not have taken when segmenting its market?
a.
Choose a basis or bases for segmenting the market.
b.
Design, implement, and maintain appropriate marketing mixes.
c.
Profile and analyze segments.
d.
Select a market or product category for study.
e.
None of these are appropriate steps.
16 Chapter 8 ♦ Segmenting and Targeting Markets
All of these are important steps to the segmentation of a market.
PTS: 1 OBJ: LO: 8-6 TOP: AACSB: Reflective Thinking
KEY: CB&E Model: Strategy MSC: BLOOMS: Level II Comprehension
3. The average Harley Davidson rider is a member of which age segment?
a.
Teens.
b.
Generation Y.
c.
Generation X.
d.
Baby boomers.
e.
The silent generation.
4. Harley Davidson’s Ultra Classic Trike has the potential to do this—to cut into the sales of the company’s existing
motorcycle options:
a.
Reposition.
b.
Cannibalize.
c.
Optimize.
d.
Segment.
e.
Differentiate.
5. “Harley Davidson evokes images of carefree, rebellious, even lawless riders wearing long beards and leather vests,
cruising across the country while living by their own rules.” This exemplifies the company’s:
a.
Position.
b.
Perceptual map.
c.
Benefit segmentation.
d.
Family life cycle.
e.
None of these.
Chapter 8 ♦ Segmenting and Targeting Markets 17
GREAT IDEAS FOR TEACHING CHAPTER 8
James S. Cleveland, Sage College of Albany
DISCUSSION BOARD TOPICS TO ENCOURAGE PARTICIPATION
Discussion board questions provided to students to encourage them to engage in thinking and writing about the content
of the Principles of Marketing course usually take the form of a provocative statement to which students are asked to
respond. An example of this would be “All PR is good PR.”
Discussion topics such as this one are abstract and often require that the instructor provide an initial reply to show
students what is expected of them in their own replies. For students with limited work experience, this approach may be
quite appropriate. For adult students with extensive experience as employees and consumers, however, the abstract
nature of such topics can be frustrating.
I have developed, therefore, a series of discussion board questions to use with experienced, adult students. These
questions are designed to encourage them to use their experiences as employees and consumers as doorways to better
understand the course material, and to make their own responses more interesting to themselves and to the other students
in the class who will read and comment on them.
Each question has three parts:
1. First, there is a sentence or two from the students’ textbook introducing the topic. By using the text author’s
own words, students are enabled to locate relevant material in the text more easily, the text content is
reinforced, and confusion resulting from use of variant terms or expressions is minimized.
2. Second, there is a reference to text pages the students should review before proceeding. Since the goal of the
exercise is for students to apply the course content to their own experiences, reviewing the content first is
important.
3. Third, there is a request for the students to think about or remember some specific situation in their experience
to which they can apply the text material, and a question or questions for them to address in their replies.
Here are additional such discussion board questions developed for Chapter 8 of MKTG10. Each is written to fit the same
text cited above but could easily be rewritten and revised to fit another text.
Series A
1. Marketers use segmentation bases, or variables, which are characteristics of individuals, groups, or
organizations, to divide a total market into segments.
2. Review the five general segmentation bases in section 8-4 of your text.
3. Then describe what base or bases your employer uses to segment its market. Be as specific as you can. For
example, a company selling women’s clothes is obviously segmented by gender but it probably also segments
by age or profession as well.
Series B
1. The development of any marketing mix depends on positioning, a process that influences potential customers’
overall perception of a brand, product line, or organization in general. Position is the place a product, brand, or
group of products occupies in consumers’ minds relative to competing offering.
2. Review positioning in section 8-9 of your text.
3. Then describe the position of the products marketed by your employer. Do you think this is a good position?
Why or why not?
18 Chapter 8 ♦ Segmenting and Targeting Markets
Barbara Coleman, Augusta College
UNITY IN DIVERSITY
Whenever I teach a unit on multiculturalism, I begin with the following exercise. Sometimes it uncovers interesting
differences based on gender or ethnicity, but just as often it identifies common values and lifestyle characteristics.
Note your race, ethnic group or country of origin:
_____Male
_____Female
What is your favorite
television program:
radio station:
leisure activity:
food:
drink:
restaurant:
What do you see yourself doing 5 years from now?
What is your attitude toward marriage and children?
After this form is completed, students discuss it in class. You may also use small group discussions first and then general
class presentations or discussions.
Marcel L. Berard, Community College of Rhode Island
MARKETING STARTS WITH STP: SEGMENTING, TARGETING AND POSITIONING
This project should be started at the beginning of the semester so as to provide students immediately with a target date
for oral and written completion. It is highly recommended that this project start early and finish toward the end of the
semester utilizing a team approach. Team members should not exceed five students to each group—two, three, or four
are preferred. A professor may want to choose and assign students in particular groups, or students may choose
members. Also, professors might provide class or library research time to complete the project, although most work will
be completed out of class. A final note to the professor: Contingent on semester duration, the required marketing strategy
project outline can be lengthened or shortened with no loss of importance to the marketing plan.
Students’ Product Instructions and Outline
(Students must choose only one topic below!!!)
Marketing Strategy Project STP choice topics:
#1 – New Musical Group
#2 – New Feature Movie
#3 – New Television Show
Note to Students: Conduct a “Brainstorming” session in which your group chooses a topic from those listed above. In
your session, you should answer all statements and questions in all three sections of the Marketing Strategy Project
outline below. Good Luck!!!
Chapter 8 ♦ Segmenting and Targeting Markets 19
Marketing Strategy Project Outline
Section #1. Segmenting Your Product Market
a. Current product identification and information (name, location, size logo, symbols, insignias, models, etc.)
b. Product’s philosophy, climate, and culture (mission statement)
c. Short-term and long-term goals
d. Demographics (age, sex, income, occupation, lifestyle factors, activities, interest, values, etc.)
e. Present market size (where are your customers—percentage of market you want to capture—and why?)
f. How to increase market share (describe your market growth potential)
Section #2. Targeting Your Product Market
a. Primary target market (main consuming group)
Secondary target market (additional sales potential
b. Product life cycle (describe anticipated adjustments in the marketing mix – changes through the stages)
c. Supply five different and potential promotional vehicles
d. Advertising detail schedules
e. How are you going to generate publicity?
Section #3. Positioning Your Product Market
a. What is special about this product?
b. List and describe its features and benefits.
c. Explain the image and character you would like your customer to see.
d. Describe and provide your three closest competitors’ activities.
e. Analyze your product’s opportunities and threats in the market.
Reminder: Marketing strategy starts with “STP”!!!
