3.3 Making marketing decisions : segmentation, targeting, positioning Flashcards
1
Q
What is market segmentation
A
The process of dividing potential customers into different groups based on characteristics like age, gender, income and much more
2
Q
Reasons businesses use market segmentation
A
- Choosing market mix
- Choosing promotion
- Market mapping
3
Q
Choosing market mix
A
Choosing the product, geographic, promotional and price segmentation can help a business to understand its customers’ needs and wants
4
Q
Choosing promotion
A
- Advertising in a newspaper probably is not the best way to target teenage girls, but a teenage magazine might be
- Segmenting a market can give businesses ideas about how best to promote their products
5
Q
Market mapping
A
A process to identify a gap in the market by looking at what competitors offer
6
Q
Methods of market segmentation
A
- Gender
- Income
- Age
- Location
7
Q
Mass market
A
- Tries to make products / services for all customers
- Larger and the types of products will be more generalised
8
Q
Niche market
A
- Smaller
- Products / services focus on a specialist want or need
9
Q
Examples of mass markets
A
Mcdonalds, Burger King, Subway
10
Q
Benefits of mass markets
A
- More customers
- Economies of scale
- Strong market presence
11
Q
Disadvantages of mass markets
A
- More competition
- Lower profit margins
12
Q
Benefits of Niche markets
A
- Less competition
- Specific market
- Can develop specific expertise
- Higher profit margins
- Customer loyalty
13
Q
Disadvantages of niche markets
A
- No economies of scale
- Vulnerability (undiverse product portfolio)
