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Chapter 8: Segmenting and Targeting Markets
14
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 the following:
• 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 the following:
• 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,
Chapter 8: Segmenting and Targeting Markets
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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 clarifies the process of segmentation and positioning for them.
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?
Students’ answers will vary. Marketing tobacco products to younger consumers is
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?
Students’ answers will vary. Marketing fast food to children is becoming an increasingly
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 website at http://www.marketingpower.com to review the statement. Write a
brief paragraph summarizing where the AMA stands on this important issue.
Students’ answers will vary. 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 risks associated
Chapter 8: Segmenting and Targeting Markets
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© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
with product or service usage. In the past, however, even providing specific operating
instructions or instructions for use and clearly marking the product with warning labels has
not been enough to indemnify some companies in various lawsuits. Furthermore,
“unhealthy” can be a question of degree. For example, if someone eats at McDonald’s once
a month, it probably won’t detrimentally affect the person’s overall health. If, however,
someone eats there once a day, the person will probably experience obesity, hypertension,
and other health problems related to high consumption of fatty foods. To further
complicate matters, some people may consider some products healthy that others do not.
For example, most people consider meat a healthy source of complex proteins for brain and
muscle development; vegetarians disagree, finding meat to be an unhealthy source of fats
and fatty acids that are difficult for the body to digest.
In the area of marketing to adults, the question remains: Who should be responsible for
regulating the behavior—the person consuming the cigarettes or the fast food, or an
external body such as the government or industry trade association? As for the aggressive
marketing of unhealthy products to children, the practice could definitely be considered
irresponsible and unethical. (Consider having students discuss this issue in detail, and
make a list of pros and cons on the board as students raise various arguments.)
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
Chapter 8: Segmenting and Targeting Markets
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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.
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
Chapter 8: Segmenting and Targeting Markets
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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
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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
d. Customized targeting
Case Assignment: CEC Entertainment, Inc (Chuck E. Cheese’s)
For more than 35 years, Chuck E. Cheese’s has been one of the nation’s go-to venues for
children’s birthday parties and rainy afternoon outings. Operating under the slogan “Where a kid
can be a kid,” there are more than 575 Chuck E. Cheese’s locations in 47 states and 10 foreign
countries or territories. Their goal is to provide a fun and safe environment for children to play
and families to create memories, but in 2015 Chuck E. Cheese’s made improvements not for the
children, but for the parents.
“Your average kid who comes to Chuck E. wants to come 11 times a year; they come three
times a year. The difference between that and the 11 times a year they want to come is the mom
and dad veto,” said Tom Leverton, CEO of CEC Entertainment, Inc. “What we’ve been doing
over the past couple of years especially is trying to address the mom and dad needs.”
To that end, Chuck E. Cheese’s expanded their menu to include items geared to more
advanced culinary tastes. Two new signature pizzas have been added to the lineup. The Cali
Alfredo pizza is made with Alfredo sauce, fresh spinach, freshly grated mozzarella, chicken,
sliced mushrooms, and sausage. The BBQ Chicken Pizza features a smoky BBQ sauce topped
with strips of roasted chicken breast, red onions, green peppers, and crispy onions. In a blind
taste test of 308 respondents, 59 percent preferred thin and crispy Chuck E. Cheese's pizza to
Pizza Hut and Dominos combined.
The expanded menu also features Caesar and Club whole-wheat wraps, BBQ Chicken
Ciabatta sandwiches, BBQ and Sweet Chili boneless and bone-in chicken wings, soft parmesan
breadsticks, and Buffalo Chicken cheesy bread. Wraps and sandwiches are served with choice of
Chapter 8: Segmenting and Targeting Markets
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fresh fruit, oven-baked French fries, or carrot slims with lite ranch dressing. They also added
dessert churros served with salted caramel and white chocolate icing.
TRUE/FALSE
Chapter 8: Segmenting and Targeting Markets
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1. Parents with children under 10 are a market segment.
2. The purpose of market segmentation is to enable the marketer to tailor marketing mixes to
meet the needs of one or more specific segments.
3. Chuck E. Cheese’s new commercials are focused to a target market based on geographic
segmentation.
4. Chuck E. Cheese’s does not make an attempt to target people in certain parts of the FLC.
5. Chuck E. Cheese’s new BBQ Chicken pizza will cannibalize Domino’s BBQ Chicken pizza.
MULTIPLE CHOICE
1. Which of the following is NOT a demographic often used for segmentation?
a. age
b. income
c. ethnicity
d. gender
Chapter 8: Segmenting and Targeting Markets
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e. All of these are demographics often used.
2. Chuck E. Cheese’s new commercial uses a(n) __________ targeting strategy.
a. concentrated
b. multisegment
c. undifferentiated
d. None of these
3. Which of the following is NOT a trend that will lead to continuing growth of CRM?
a. loyalty
b. standardization
c. time saving
d. technology
4. Chuck E. Cheese’s is __________ itself to compete with pizza chains popular among adults.
a. positioning
b. targeting
c. differentiating
d. concentrating
5. Which of the following was NOT one of the changes made by Chuck E. Cheese’s in an
attempt to target the segment with a low usage-rate?
a. updating their menu to include more adult-friendly options
b. introducing a lunchtime all-you-can-eat buffet
c. adding an “adult’s night” for 18+ customers who do not have children
d. testing half-priced games on Tuesday evenings
Chapter 8: Segmenting and Targeting Markets
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© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
PTS: 1 OBJ: LO: 8-4 TOP: AACSB: Reflective Thinking
KEY: CB&E Model: Strategy MSC: BLOOMS: Level I Knowledge
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’ textbooks 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 similar discussion board questions developed for Chapter 8 of MKTG11.
Each is written to fit the same text cited above but could easily be rewritten and revised to fit
Chapter 8: Segmenting and Targeting Markets
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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?
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:
Chapter 8: Segmenting and Targeting Markets
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What do you see yourself doing five 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 Segmenting, Targeting, and Positioning (STP)
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!
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)
Chapter 8: Segmenting and Targeting Markets
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c. Short- 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)
b. Secondary target market (additional sales potential)
c. Product life cycle (changes through the stages)
d. Supply five different and potential promotional vehicles.
e. Advertising detail schedules
f. 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”!
