MGT 103: Chapter 9 (STP) Questions And
Answers
Segmentation: Linking Needs to Actions The process of segmenting a market and
selecting specific segments as targets is the link between the various buyers' needs and the
organization's marketing program
- leads to tangible marketing actions that can increase sales and profitability
market-product grid a framework to relate the market segments of potential buyers to
products offered or potential marketing actions
When and How to Segment Markets - a business segments its markets *when* it expects
that this extra effort will increase its sales, profit, and return on investment
- when expenses > potentially increased sales from segmentation, a firm should *not* attempt to
segment its market
1. One Product and Multiple Market Segments
2. Multiple Products and Multiple Market Segments (Ford having multiple models)
3. Segments of One (Mass Customization)
, MGT 103: Chapter 9 (STP) Questions And
Answers
One Product and Multiple Market Segments Pros: Avoids the extra costs of developing
and producing additional versions of the product.
Example: Magazines/Books
- Although separate covers for magazines or separate advertisements for books (to attract the
different market segments) are expensive, these expenses are minor compared with the costs of
producing multiple versions of magazines or books for several different market segments
Multiple Products and Multiple Market Segments Example: Ford's different lines of cars,
SUVs, and pickup trucks are each targeted at a different type of customer
Pros: very effective if it meets customers' needs better, doesn't reduce quality/increase price, and
adds to sales revenues and profits
Cons: The proliferation of different models and options can reduce quality and raise prices—
especially in relation to foreign imports (this is why Ford reduce the number of models/options
they have)
Answers
Segmentation: Linking Needs to Actions The process of segmenting a market and
selecting specific segments as targets is the link between the various buyers' needs and the
organization's marketing program
- leads to tangible marketing actions that can increase sales and profitability
market-product grid a framework to relate the market segments of potential buyers to
products offered or potential marketing actions
When and How to Segment Markets - a business segments its markets *when* it expects
that this extra effort will increase its sales, profit, and return on investment
- when expenses > potentially increased sales from segmentation, a firm should *not* attempt to
segment its market
1. One Product and Multiple Market Segments
2. Multiple Products and Multiple Market Segments (Ford having multiple models)
3. Segments of One (Mass Customization)
, MGT 103: Chapter 9 (STP) Questions And
Answers
One Product and Multiple Market Segments Pros: Avoids the extra costs of developing
and producing additional versions of the product.
Example: Magazines/Books
- Although separate covers for magazines or separate advertisements for books (to attract the
different market segments) are expensive, these expenses are minor compared with the costs of
producing multiple versions of magazines or books for several different market segments
Multiple Products and Multiple Market Segments Example: Ford's different lines of cars,
SUVs, and pickup trucks are each targeted at a different type of customer
Pros: very effective if it meets customers' needs better, doesn't reduce quality/increase price, and
adds to sales revenues and profits
Cons: The proliferation of different models and options can reduce quality and raise prices—
especially in relation to foreign imports (this is why Ford reduce the number of models/options
they have)
