3.3.3 Segmentation Targeting Postionujg

Question 1

Define segmentation

Answer 1

Process of splitting up the market into different groups of people with similar characteristic

Question 2

What are the methods of segmentation?

Answer 2

Demographic I.E characteristics of the people in the target population for example age, gender, do they have children?

Geographic I.e where consumers are based

Income/socio economic groups

Behavioural I.E what customers do for example when they buy how much they buy brand loyalty what benefit do they want from products?

Question 3

Benefits of segmentation

Answer 3

By segmenting a market managers can understand what different groups want. Managers can then decide if they can meet needs and then all to the product to meet the needs of the segment

it enables more focused and efficient marketing – promotions can be made relevant to that segment. Money isn’t wasted promoting the wrong people investing in unwanted
features of the products.

Question 4

What are disadvantages of segmentation?

Answer 4

The most segments of business folks is on, the more complex and expensive it becomes trying to meet all their needs, both in terms of altering products and promotion for each segment

Question 5

Define targeting

Answer 5

When a business decides which segments it wants to focus on

Question 6

What segments are chosen when targeting ?

Answer 6

There’s a sufficient demand potential growth

There’s potential profit

It has the skills to compete and create a competitive advantage

Brand fits with the targets segment eg high end shops and high

Question 7

Benefits of targeting

Answer 7

Can focus resources on the most profitable segment

provides a better understanding of market

improve communication between buyer and seller

Question 8

What’s case study on targeting

Answer 8

Aston Martin – unveiled first SUV to compete in luxury SUV market it was for women wanted to reverse 75% slide share price always been targeted at men (94% of market). They are segmenting to target wealthy women.

Question 9

Define niche marketing

Answer 9

Fixing on particular segment of the market (usually very small) for example clothes shop for tall people

Question 10

Advantages on niche marketing

Answer 10

Less competition and doesn’t threaten other bigger businesses so they may not fight back

Clear focus- target particular customers

The firm builds up specialist skill and knowledge equals market expertise

Can often charge a higher price: customers are prepared to pay for expertise so profit margins are often higher

Customer tend to be more loyal

Question 11

Drawbacks of niche marketing

Answer 11

May be small and not provide big profits

If the niche grows then the bigger businesses will be attracted to it

Lack of economies of scale

Risk of over dependence in a single product or market

Question 12

Define a mass market

Answer 12

Mass market approach aims to provide products that meet some of the needs of a large proportion of the market

Customers wants/needs more general

Aims for volume and there’s potential for more revenue

Question 13

Risks of mass marketing

Answer 13

Investment required to be able to cater to fill these large volumes

Difficulties competing with other established businesses

Increasing number of niche provides means customers turn to them looking for something that meets their needs more precisely ,reducing demand in the mass market

Question 14

Describe a case study for niche markets

Answer 14

Taste for burgers are changing and consumers are starting to turn to niche premium burgers and increase market share

The experience of the products with the markets changing so McDonald’s are going through a 10 year revamp – higher grade burgers, et cetera

Question 15

What is positioning?

Answer 15

Having targeted a segment managers now consider the positioning of their business in the market for example how their products are perceived relative to their competitors

Question 16

What can market mapping show

Answer 16

Market mapping plots how a product is perceived and where it’s position

Question 17

What are the pros with market mapping ?

Answer 17

Helps spot gaps in the market

Useful for analysing competitors

Encourages use of market research

Question 18

Cons of market mapping

Answer 18

Just becuase there’s a gap doesn’t mean there’s demand

Not a guarantee of success

How reliable is the market research ?

Question 19

What does positioning depend on?

Answer 19

Firms price

Benefits it offers

Brand image

Level of service

Question 20

How do these factors affect a firms competitiveness?

Answer 20

Higher price than rivals for example and similar benefits make it un competitive but better benefits and service could mean the firm is competitive even if it’s prices higher

Question 21

How do the strengths of the business influence positioning?

Answer 21

If it’s very efficient or has bargaining power of suppliers and it will have low-cost to position itself as a low price firm for example Amazon

Or if innovation is it and the firm could focus on providing better benefits and competitive, e.g. Apple

Question 22

How do competitors influence positioning?

Answer 22

What’s they are offering will affect how a firm positions itself.

It produce a market map to identify a gap

Question 23

How do market conditions/external influences influence position?

Answer 23

If the economy is recovering, firms may decide to offer more benefits of their products as as incomes are rising so the positioning can change

Question 24

What is the case study on repositioning?

Answer 24

McVities’s in June 2020 they launched very important biscuits and earlier in 2020. They gave the classic digestives and upgrade by combining the normal flavours of new nostalgic ones.

Question 25

How does market research help businesses?

Answer 25

Market research enables businesses a better understanding of customers and the marketplace

Question 26

How does market mapping help businesses?

Answer 26

Market mapping shows the business their place in and potential opportunities within the market

Question 27

How does sampling help businesses?

Answer 27

It insures that sufficient data is gathered in a cost-effective manNer

Question 28

How does statistical techniques help a business?

Answer 28

Enable the business to analyse its market particularly with a view to forecasting sales. These techniques can also enable the business to assess the likely accuracy of its forecast.

Question 29

How does technology help businesses?

Answer 29

Allows businesses to gather a range of data and conduct more sophisticated analysis to support its marketing decision-making

Question 30

How does data on price elastic demand and income elastic demand help a business?

Answer 30

It gives businesses further insight into 2 critical factors that affect the demand for their product

Question 31

What’s your businesses support their marketing data with?

Answer 31

More qualitative judgement such as the personal opinions of experience marking staff these qualitative state judgements are most likely included in marketing decisions in the following situations

When the products of business is new says there’s no previous information to base predictions

When trends have changed so that it would be unwise to predict on the basis of past statistics

When the factors influencing sales are not easy to quantify fashion items and the entertainment industry option difficult to predict and an experienced manager may be able to deliver more accurate forecast in any attempt based on statistical data

Question 32

What do businesses rely on in business planning?

Answer 32

Businesses rely on accurate data and forecasting in their business planning

Question 33

What happens if sales are overestimated?

Answer 33

If sales over estimated there’s likely to be a waste of resources as a firm will produce too much. The cost to the firm will depend on whether the products are perishable and how expensive they are to store.

Question 34

How does underestimation cause issues with market decisions and planning?

Answer 34

The opportunity cost of loss sales is high, especially if customer Goodwill is undermined

Question 35

Out of appropriate data and personal opinion which is easier for marketing managers to justify decisions for?

Answer 35

In general, it is easier for marketing managers to justify decisions if they are based on appropriate data rather than personal opinion