episode 06 exercise answer 05

Part 5: Solution

CanGo now needs to determine how to position its product offerings in each segment. To do so, CanGo will need to assess the different wants and needs of customers in each segment, as well as how they perceive CanGo relative to competitors. As you may recall, positioning addresses how the customer perceives a firm's product and brand name, relative to those of the firm's competitors. To successfully position a product, the firm must understand what customers perceive its competitive advantage to be, as well as the competitive advantages of its competitors. In other words, the firm's marketers must discover their perceptions. To do so, marketers will often use multidimensional scaling, particularly perceptual maps. A firm that chooses to use these tools will conduct marketing research that would have customers rate brands on a number of scales according to certain characteristics or dimensions. Researchers would then graph the results to form a map depicting how customers perceive the brands.

Imagine that CanGo has found some market research information that determines which personal attributes customers found to be most influential when deciding which online entertainment products to purchase. The table below sets out the results of this research. Your job is to help the CanGo team make sense of this data to determine how to best position their products.

Utilize Charts 1 and 2 to answer the following questions.

Let's see how well you answered the questions.

	1.	In Chart 1, Point A would likely represent which segment?
		Your Answer:
		Correct Answer: Gen-X
		Point A represents the Gen-Xers. This group has indicated that they are moderately technologically savvy and value-oriented. This information means that they are moderately concerned about price, explaining why they appear in the middle of the chart.

	2.	In Chart 1, Point B would likely represent which segment?
		Your Answer:
		Correct Answer: Boomers
		Point B represents the Baby Boomers. This group is less price sensitive, as they are willing to pay top dollar for quality. They are also more apprehensive about technology. By process of elimination, Point C would then be the Gen-Yers who are more price conscious and more technologically savvy.

	3.	In Chart 2, Point A would likely represent which segment?
		Your Answer:
		Correct Answer: Gen-Y
		Point A represents Gen-Y. This group is more likely to conform, as they are driven by peer pressure. They also have a moderate aversion to risk.

	4.	In Chart 2, Point B would represent which segment?
		Your Answer:
		Correct Answer: Gen-X
		Point B represents Gen-X. This group is said to embrace risk and therefore have a low aversion to risk. In addition, they are moderately driven by conformity if it fits their personal style. By process of elimination, Point C would be the Baby Boomers who have a higher risk aversion and a relatively low need for conformity.

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