978-1337407588 Chapter 8 Solution Manual Part 1

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Chapter 8: Segmenting and Targeting Markets

Review and Assignments for Chapter 8

Review Quesons

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 that customers like

and managing databases to send out targeted marketing message. Ideas include sending

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?

Students should be able to determine positioning strategies for the individual products in

Applicaon Quesons

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

Chapter 8: Segmenting and Targeting Markets

Why college students would not be a viable market: Mercedes has always targeted an

upscale, established market. It has really never positioned itself as a car for youth but as a

2. How are visitors to the following website segmented when seeking relevant job

openings? Try this search engine and report your results:

http://www.careermag.com/.

The website uses both consumer and business target markets and segments the market in

several different ways, mostly by benefit and geographic segmentation. For benefit

segmentation, the website allows users to search for career information by profession

3. As a marketing consultant for a chain of hair salons, you have been asked to evaluate

children 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:

a. substantiality (Is the kids’ segment large enough to target?)

Chapter 8: Segmenting and Targeting Markets

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.

Students will choose a variety of ads but should clearly understand demographics and

5. Investigate how Delta Airlines uses its website, http://www.delta.com/, to cater to its

market segments.

Delta uses usage-rate and benefit segmentation in its website. The market segments that are

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

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.

Students’ answers should describe two or more variables that should be used to segment

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.

Chapter 8: Segmenting and Targeting Markets

Students should clearly describe a market segment as a subgroup of people or

organizations sharing one or more characteristics that cause them to have similar product

9. Go to the websites of JCPenney, http://www.jcpenney.com, and Target,

http://www.target.com/. Determine 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?

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 _____.

Consumers of Proactiv Solution skin care products could also be a target market for

_____.

Consumers of Alienware computers could also be a target market for _____.

Consumers of Specialty luggage tags could also be a target market for _____.

Students’ answers will vary.

Applicaon 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:

Chapter 8: Segmenting and Targeting Markets

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

3. Create a perceptual map for the product you chose. Write a short statement that describes

Purpose: This exercise quickly shows students the limitations of using only demographics to

Setting It Up: Form groups of five to eight persons. Instruct each group to pick a product

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 the following:

VALS

Lifestyle

Chapter 8: Segmenting and Targeting Markets

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

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

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

Chapter 8: Segmenting and Targeting Markets

1. Is marketing tobacco products to younger consumers unethical?

Students’ answers will vary. Marketing tobacco products to younger consumers is unethical

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

hot debate, as time-pressed parents are relying on companies like McDonald’s and Burger

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

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

Chapter 8: Segmenting and Targeting Markets