3.3 Decision Making To Improve Marketing Performance Flashcards
What are the five types of segmentation?
Geographic
Demographic
Income Behavioural
Socioeconomic
What is segmentation?
The identification of similar groups with similar needs and wants
What is demographic segmentation?
Characteristics of the people in the target population - age, gender etc
What is geographic segmentation?
Areas where the customers are based, differing tastes and preferences
What is income segmentation?
Split into high and low income, high income may be more interested in saving and investing whereas low income borrowing
What is socioeconomic segmentation?
Segmentation on income and professions and can be split into the following categories:
Higher managerial, administrative or professionals
Intermediate managerial administrative or professional
Supervisors, clerical and junior managerial, administrative or professional
Skilled manual workers
Semi and unskilled manual workers
Casual labour
What is behavioural segmentation?
Focuses on what consumers actually do- When they buy, how much they buy, brand loyalty, the benefit they want from the product
Why is segmentation useful?
Understand what different groups want rather than treat all customers the same
More focussed and efficient marketing - more segments focussed on the more complexed this would get
Adapting products to meet the needs of different customers may mean that customers are more satisfied but could be making the potential market smaller
What determines which segments businesses target?
There is sufficient demand and potential profit to justify the investment
It has the ability to be competitive and gain sales
What is a niche market?
Niche market is a smaller specific segment of the market with clearly identifiable needs and wants such as tall people
What is a mass market?
A mass market is the whole of the market, where a business doesn’t try and match the needs of a specific segment precisely but aims to provide products that will meet some of the needs of most of the people
What are the positives of a niche market?
Can compete in a bigger market, without directly challenging the bigger businesses and not be seen as a threat by them
Not perceived as such a threat by larger competitors
Gap in the market with limited competition
What are the negatives of a niche market?
Small market which may be vulnerable to losing a few customers
Profits may be relatively low
If the business grows it will attract the attention of larger businesses
What are the positives of mass marketing?
More customers and more potential revenue and returns
What are the negatives of mass marketing
Large amount of investment needed
Competition
Can lose demand to niche markets
What is needed to be a successful mass market?
Larger volumes (therefore investment and capacity) to fulfill orders
Promotional techniques to reach more customers
Positioning in the market
The positioning of a business can be shown using what?
A market map
E.g. Expensive + Cheap
Classic + Modern
The positioning of a product relative to competitors depends on which factors?
Product
Image
Price
Sevices
What influences the positioning of a product?
The strengths of the business - an efficient business may aim to be a low price provider
Innovative business - providing greater benefits than rivals
Competitors - what are established firms already offering
Market conditions - PEST- C factors
What are confidence intervals?
A confidence interval gives the percentage probability that an estimated range of possible values in fact includes the actual value being estimated
Why are confidence intervals useful?
Businesses benefit from the use of statistics in estimating or predicting future events
A confidence interval helps a business evaluate the reliability of a particular estimate
Because no estimate can be 100% reliable, businesses need to know how confident they should be in their estimates and whether or not to act on them
What are marketing objectives?
Marketing objectives set out what a business wants to achieve from its marketing activities. They need to be consistent with overall aims and objectives of the business. They also provide an important focus for the marketing team
What are SMART objectives?
Specific Measurable Achievable Realistic Timed
What are the benefits of market objectives?
Ensure functional activities consistent with corporate objectives
Provide a focus for marketing decision-making and effort
Provide incentives for marketing team and a measure of success / failure
Establish priorities for marketing resources and effort
