3.3.3 - Making marketing decisions: segmentation, targeting, positioning Flashcards
What is market segmentation?
The process of dividing a market into smaller sections which contain customers with similar needs and wants.
What is market targeting?
The process of selecting market segments that are worth targeting.
What are market segments?
Groups of consumers with similar needs and wants within a market. Each require a unique and specific marketing mix.
Give some examples of how consumer markets may be segmented.
- Behavioural
- Demographical
- Geographical
- Income
What are some components of behavioural segmentation?
- Brand loyalty
- Use of products in market
- Attitudes
- Responses
- Price sensitivity
What are the components of demographical segmentation?
- Age
- Family size
- Occupation
- Ethnicity
- Education
What are the components of geographical segmentation?
- Towns/counties/countries
- Climate
- Population growth rate
What are the components of income segmentation?
- Life styles
- Tastes
What are the benefits of market segments for businesses?
- They can target potential customers
- They can recognise competitors
- They can measure market performance and anticipate future market trends.
What are the benefits of market segmentation?
- Businesses can focus resources on parts of a market where the business can succeed.
- Allows a business to grow share in markets of fast-growing segments.
- Helps with new product development (basic criteria of consumer needs).
- Helps making marketing mix more effective.
What are the potential drawbacks of market segmentation?
- Data used to segment the market is not always available, up-to-date or reliable.
- Market segments are increasingly dynamic.
What is niche marketing?
Where a business targets a smaller segment of a larger market, where customers have specific needs and want.
What are the benefits of successful niche marketing?
- Less competition.
- Builds up specialist skill and market expertise (knowledge).
- Can often charge a higher price so profit margins often higher.
- Customers tend to be more loyal/easier to retain.
What are the disadvantages of niche marketing?
- Lack of economies of scale.
- Risk of over dependence on a single product or market.
- Likely to attract competition if successful.
- Vulnerable to market changes.
What is mass marketing?
Where a business sells into the largest part of the market, where there are many similar products on offer.
