3.3.3. Making marketing decisions Flashcards
Market Segmentation
-Splitting the market into different groups
-Allows your marketing department to focus on the subset of customers that are most likely to purchase your products/services
Demographic segmentation
-Identifies subgroups
~Age
~Gender
~Level of education
Geographic segmentation
-Based on where people live
-People in different geographical areas display different characteristics and needs
~South East of England is generally warmer than Scotland
Income segmentation
-Based on income, using socio-economic groupings
Behavioural segmentation
-Based on behavioural patterns of the customer rather than characteristics
~Reason for making a purchase (e.g needs/rewards
~Brand loyalty
~Method of purchase (e.g online/in-store)
Benefits of segmentation
-Narrows down the market
-Easier to sell relevant products
-Expect to lead to more sales revenue
-Improve promotion
Drawbacks of segmentation
-Stereotypes
-Doesn’t guarantee sales
-Needs to be up to date
-Markets are forever changing
Targeting
Mass–> try to sell to as many people as possible
Niche–> smaller subset of the mass market
Positioning
-Uses market mapping
-Influenced by size of the gap, marketing conditions, internal constraints
Mass market advantages
-Reach a wide range of people
-Large market
-Highest rate of success
-More potential customers
-More likely to make higher sales revenue
Mass market disadvantages
-More competition
-Less opportunity for USP
-Higher production costs
-Higher advertising costs
Niche market advantages
-Less competition
-More opportunity for USP
-Better relationship with customers
-Potential for higher profits/salves revenue
Niche Market disadvantages
-Less people to target to/customers
-Find out who to target to
-Spend more on market research
