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Chapter 8:
Segmentation, Targeting, Differentiation, and Positioning
Strategies
Review Questions
1. What are the three main markets of e-business, and how do they differ?
Exhibit 8-2 highlights three important markets that both sell and buy to each other:
Businesses, consumers, and governments.
The business market is huge because a higher proportion of firms are connected to
the Internet than consumers, especially in developing countries. Much of the B2B
online activity is transparent to consumers because it involves proprietary networks
that allow information and database sharing. Businesses that sell online face
increasing competition due to globalization and lower market entry barriers brought
The U. S. government is the world’s largest buyer, purchasing over $200 billion in
goods and services every year. Add to this the purchasing power of U.S. states,
counties, cities, and other municipal agencies, and this makes for a huge market. The
2. Define the four main segmentation bases and list at least two segmentation
variables for each.
Geographic — Although the geographic location of computers in cyberspace is not
important to users accessing Web sites, it is very important to organizations with an
3. Why are millennials and kids important market segments for e-marketers?
Millennials are an important market segment because they are the first generation to
control information quickly, use many technology gadgets at once, and totally ignore
4. Why do e-marketers need to measure attitude toward technology? What
measures are available?
5. What benefits do consumers seek online?
Marketers using benefit segmentation often form groups of consumers based on the
6. How do benefit segments differ from usage segments?
7. What are the three most important online engagement segmentation levels?
Describe Forrester’s Social Technographics segmentation scheme.
The categories of creators, conversationalists, and critics are widely recognized as the
three most highly engaged segments. Creators are those online clients who posted to
8. How does micromarketing differ from niche marketing?
Micromarketing, also known as individualized targeting, occurs when a firm tailors
all or part of the marketing mix to a very small number of people. Taken to its
extreme, this can be a target market of one person.
9. Why would an e-marketer want to create or nurture a Web site for building a
community?
10. How does differentiation differ from positioning?
Differentiation is the act of designing a set of meaningful differences to distinguish
Discussion Questions
11. 1-800-Flowers Story: Identify the types of consumer segments used by this
company to build revenue. What other segments might be profitable?
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12. 1-800-Flowers Story: What is this company’s competitive advantage, and thus
its differentiation and positioning basis?
1-800-Flowers’ competitive advantage lies in its ability to manage customer
relationships through SAS business analytics. It differentiates itself and creates its
13. Underdeveloped countries tend to have sharper class divisions than exist in the
United States. It is not uncommon for 2% of the population to control 80% of
the wealth. As a marketer, how would you use this knowledge to develop a
segmentation strategy for targeting consumers in these countries?
Marketers can base their segmentation of consumer markets on demographics,
geographic location, psychographics, and behavior with regard to the product.
14. Many parents are upset that some Web sites specifically target children and
young teens. Outline the arguments for and against a company using this
segmentation and targeting strategy. Which side do you support—and why?
By targeting children and young teens, websites are concentrating on a largely
untapped market that will inevitably be satisfied by market forces. Sites will sprout
15. Some company managers forbid employees from using the Internet for non-
work-related activities. What are the implications for e-marketers that segment
their markets using the variable of home and work access?
Many companies segment by whether users access the Net from home or work.
Access point is important because home and work segments tend to have different
16. Forrester Research suggests a segmentation scheme for online engagement.
Interview some of your classmates to see what proportion fall back into each
segment.
17. Looking at the list of 10 community types in Exhibit 8.7, name one Web
company that capitalizes on each for marketing purposes.
1. Entertainment communities: secondlife.com or Games.Yahoo.com
18. How can a company identify influentials that might affect its product sales or
branding efforts?
19. How can marketers use the data about smartphone use to build profitable target
market segments?
20. Why would an e-marketer choose to use competitor positioning? Integrator
positioning?
Many firms position by touting specific benefits that provide advantages over
competitive offerings. Online or offline companies often position themselves against
21. Which mobile or stationary market segment fits you the best? What kinds of
products would succeed in this segment?
22. How might an online company react if a rival embarks on competitor
positioning in an unflattering way?
Competitor positioning can used both in a positive or negative way. Both involve
23. Are customers likely to be confused by an integrator positioning that suggests a
Web site sells anything and everything? What are the advantages and
disadvantages of this positioning?
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Depending on customer attitudes toward technology and internet usage they may or
may not be confused toward integrator positioning. For example, those that browse