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Study questions

  1. Discuss the advantages of market seg­mentation.

  2. Choose a market that you are familiar with and use benefit segmentation to identify the market segments. What are the likely profiles of the resulting segments?

  3. Discuss the ethical implications of marketing to children.

  4. Many consumer goods companies have recently been experimenting with the possibilities of a customized target marketing strategy. What are the advantages and limitations of such a strategy?

  5. What is the difference between positioning and repositioning? Choose a brand that has been repositioned in the marketplace and describe both its old positioning and its new positioning. Is its repositioning strategy best described as image, product, intangible or tangible repositioning?

Key terms

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market segmentation

the process of identifying individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategy

psychographic segmentation

the grouping of people according to their lifestyle and personality characteristics

profile segmentation

the grouping of people in terms of profile variables such as age and socio-economic group so that marketers can communicate to them

benefit segmentation

the grouping of people based on the different benefits they seek from a product

lifestyle segmentation

the grouping of people according to their pattern of living as expressed in their activities, interests and opinions

geodemographics

the process of grouping households into geographic clusters based upon such information as type of accommodation, occupation, number and age of children, and ethnic background

target marketing

selecting a segment as the focus for a company's offering or communications

undifferentiated marketing

a market coverage strategy where a company decides to ignore market segment differences, and to develop a single marketing mix for the whole market

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differentiated marketing

a market coverage strategy where a company decides to target several market segments, and to develop separate marketing mixes for each

focused marketing

a market coverage strategy where a company decides to target one market segment with a single marketing mix

customized marketing

a market coverage strategy where a company decides to target individual customers, and to develop separate marketing mixes for each

mass customization

the opposite to mass production, which means that all products produced are customized to the predetermined needs of a specific customer

positioning

the choice of target market (where the company wishes to compete) and differential advantage (how the company wishes to compete)

repositioning

changing the target market or differential advantage, or both