04 People

Question 1

What is the Segmentation, Targeting and Positioning process?

Answer 1

1. Strategy or Objectives.
2. Segmentation Methods.
   (1, 2: segmentation).
3. Evaluate Segment Attractiveness.
4. Select Target Market.
   (3, 4: targeting).
5. Identify and Develop Positioning Strategy.
   (5: positioning).

Question 2

What is Segmentation?

Answer 2

Market segmentation aggregates individuals into groups that:
• Have common needs (or problems).
• Will respond similarly to a marketing action.

Question 3

What are the types of segmentation methods?

Answer 3

• Geographic.
• Demographic.
• Behavioural.
• Psychographic.

Question 4

What is the geographic segmentation method?

Answer 4

Customers are sorted into groups on the basis of where they live.

Question 5

What is the demographic segmentation method?

Answer 5

Customers are grouped based on their age, gender, income, education etc.

Question 6

What is the behavioural segmentation method?

Answer 6

Customer knowledge, attitudes, uses and responses to the product. Based on actual buying behaviour.
- E.g. usage reason/occasion, benefits sought (convenience, prestige), lifestyle.

Question 7

What is the psychographic segmentation method?

Answer 7

Delves into how consumers describe themselves.

Question 8

What is the criteria for segmentation?

Answer 8

• Simplicity and cost-effectiveness.
• Potential for increased profit.
• Similarity of needs of potential buyers within a segment
(homogeneous).
• Difference of needs of potential buyers across segments
(heterogeneous).

Question 9

What is the criteria for targeting?

Answer 9

• Current market size
• Expected growth
• Cost of reaching
the target
segment(s)
• Compatibility with
the organization’s resources and objectives
• Compatibility with offering

Question 10

Why is Targeting important?

Answer 10

Targeting different market segments because of the existence of different market segments, companies use product variants.

Question 11

What are the different Targeting strategies?

Answer 11

• One product and multiple market segments
• Multiple products and multiple market segments (product differentiation/variants)
• Segments of one; mass customisation

Question 12

What is Positioning?

Answer 12

Refers to the place an offering occupies in target customers’ minds on important attributes relative to competitive products.

Question 13

What is used during the Positioning stage?

Answer 13

Product positioning by using perceptual map: a means of displaying or graphing the “location” of a product in target customers’ minds.

Question 14

What are the steps of Positioning?

Answer 14

1. Determine consumers’ perceptions and evaluations in relation to competitors.
2. Identify the market’s ideal points and size.
3. Identify competitors’ positions.
4. Determine consumer preferences.
5. Select the position.

Question 15

What can you learn from product positioning in a perceptual map?

Answer 15

• Competitive Market.
- Your position relative to competitors.
- Select the competitors you wish to compete against.
- Understand the consumers perceptions and how you fit relative to their preferences.
• Product.
- Perceptions of a new product concept in the context of
existing brands in the market.
- Where are there ‘gaps’ in the market?