Segmentation Basics
Targeting Strategies
Differentiation
Positioning
Effective Segmentation Criteria
Value Proposition
100
What is market segmentation, and why is it used in marketing?
Segmentation is dividing a market into distinct groups with similar needs or behaviours so marketers can better target and serve them.
100
1. What is market targeting, and what are the four main targeting strategies?
2. What is mass customization?
Targeting involves evaluating segments and deciding which to serve. Mass Customization - https://www.nike.com/w/new-nike-by-you-shoes-3n82yz6ealhzy7ok
100
What is differentiation, and how does it help companies gain competitive advantage?
Differentiation is designing a product to stand out by delivering unique value.
It helps a brand attract and retain customers.
100
What is positioning, and what is a positioning statement?
Positioning is how a brand is perceived in the consumer's mind. A positioning statement summarizes the brand’s intended position.
100
What makes a market segment effective or useful?
|It must be measurable, accessible, substantial, differentiable, and actionable (MASDA).
100
What is a value proposition, and what are the five winning types shown in Figure 6.4?
A value proposition is the full positioning of a brand—the full mix of benefits on which it is positioned. The five winning types are: More for More, More for the Same, More for Less, The Same for Less, and Less for Much Less.
200
Which segmentation base divides consumers by location?
Geographic segmentation
200
Why would a company use a concentrated strategy instead of a mass-market one?
To focus resources and serve a specific niche better
200
How does product differentiation work?
|By varying features, design, or performance
200
What is value positioning?
Positioning based on the benefits received for the price paid
200
What does “measurable” mean in segmentation?
|The segment’s size and purchasing power can be quantified
200
Which value proposition offers the highest benefits at a premium price?
More for More
300
Which base divides the market by age, gender, income, or education?
|Demographic segmentation
300
What is undifferentiated marketing?
A strategy where the same offer is presented to the entire market
300
What is service differentiation?
Providing superior delivery, support, or customer experience
300
What tool helps visualize a product’s position compared to competitors?
A perceptual map
300
What does “accessible” mean?
|The segment can be effectively reached and served
300
A company introduces a high-end vacuum cleaner with smart sensors, self-cleaning technology, and a lifetime guarantee, priced 20% higher than competitors. Which value proposition is this?
More for More
400
How does psychographic segmentation group consumers?
|By lifestyle, values, and personality
400
What is differentiated marketing?
Creating separate offers for different market segments
400
How can companies differentiate through people?
By hiring and training better staff for stronger customer interaction
400
What is a value proposition?
|The set of benefits a brand promises to deliver
400
What does “differentiable” mean?
|Segments respond differently to different marketing efforts
400
A brand offers the same smartphone features as a top-tier competitor but at a lower price. Which value proposition are they using?
The same for less
500
What is behavioural segmentation based on?
|Knowledge, attitudes, usage, or responses to a product
500
What is concentrated (niche) marketing?
Targeting one or a few small segments with specialized offerings
500
What is image differentiation?
Using symbols, branding, and media to create a distinct image
500
What makes a good positioning statement?
|Clarity, relevance, and differentiation
500
What does “substantial” mean?
|The segment is large or profitable enough to serve
500
Which value proposition promises minimal benefits at a low price and is typically used for basic, budget-conscious products like dollar-store items?
The same for much less
600
What segmentation base groups buyers by occasions or benefits sought?
Behavioural (occasion and benefit segmentation)
600
What is micromarketing?
Tailoring products and marketing to specific individuals or local groups
600
Give an example of a company known for differentiation.
|Apple (design), Starbucks (service), Tesla (innovation)
600
Why is clear positioning important in competitive markets?
It helps consumers understand the unique value of a brand
600
What does “actionable” mean?
|You can develop effective programs to serve the segment
600
Why might “More for Less” be an attractive but difficult value proposition to sustain long-term?
Because it promises higher benefits at a lower price, which can attract customers quickly but is hard to maintain profitably due to high costs and pricing pressure. Only companies with a strong cost advantage or innovation can pull it off successfully.
700
Identify the segment - Fast-casual restaurant Panera caters to a lifestyle segment of people who want more than just good-tasting food—they want food that’s good for them, too. To better meet the needs of this healthy-living lifestyle segment, Panera recently announced that it would soon banish more than 150 artificial preservatives, sweeteners, colours, and flavors from its food
Psychographic
700
When a company interacts one-on-one with large numbers of customers to create customer-unique value by designing products and services tailor-made to individual needs, it is engaging in ________.
A) concentrated marketing
B) mass marketing
C) mass customization
D) differentiated marketing
E) local marketing
C) mass customization
700
Argonaut Food Stores, a retail giant, hires better-skilled employees than its competitors by employing strategic recruitment practices. It also conducts highly specialized training programs for its employees. In this case, Argonaut has focused on gaining a strong competitive advantage through ________ differentiation.
A) image
B) people
C) services
D) product
E) channel
B) people
700
Which of the following is the best example of a clear positioning statement?
A. "We offer the most advanced AI-powered coffee machines on the market."
B. "For busy professionals who need a quick energy boost, ZipBlend offers a portable protein smoothie with double the nutrients of leading brands—so you stay energized all day."
C. "Our product is innovative, stylish, and market-leading."
B. "For busy professionals who need a quick energy boost, ZipBlend offers a portable protein smoothie with double the nutrients of leading brands—so you stay energized all day."
700
Scenario:
A new fitness brand, CoreFit, is trying to segment the market for its virtual reality (VR) workout platform. They’re exploring the following potential market segments:
Segment A: Gamers aged 14–18 who enjoy fitness games but do not have purchasing power.
Segment B: Urban professionals aged 25–35 with high income, who value home fitness but already use competitors.
Segment C: Remote-working millennials aged 30–40 in mid-size cities who have shown interest in digital wellness but are not currently served by VR fitness platforms.
Question:
Based on the MASDA criteria, which of the following statements best explains which segment is the most effective to target?
A. Segment A is ideal because teenagers are a large group and love gaming.
B. Segment B is best because they are easy to reach and already buy fitness products.
C. Segment C is most effective because it is measurable, accessible, substantial, differentiable, and actionable.
D. All three segments are equally effective if the company advertises well.
C. Segment C is most effective because it satisfies all MASDA criteria: it is clearly defined, reachable, large enough to be profitable, has different needs, and the company can develop targeted strategies for them.
700
Why is “Less for More” considered a losing value proposition?
Because it offers fewer benefits at a higher price, which is unattractive to consumers and provides no value justification, customers feel they are overpaying for less.