3.3d STP: Target and Positioning Flashcards
What does targeting involve?
Deciding on which customers or market segments a business will sell to
Niche marketing definition
Where a business targets a smaller segment of a larger market
Advantages of niche marketing
- Businesses can charge more
- Less competition
- Customers are more loyal
Disadvantages of niche marketing
- Possibly lower profits
- Risk of overdependence on a single market
- Likely to attract competition
Mass marketing definition
Where a business sells into the largest part of the market where there are many similar products on offer
Advantages of mass marketing
- High revenues
- High level of marketing creates barrier to new firms
Disadvantages of mass marketing
- High costs
- Vulnerable to competition
- Less scope to add value to products
What does positioning involve?
Understanding how to position your product in relation to others within the market
How can a business position a product to give a competitive advantage?
- Have a USP
- Pricing
- Use of product
What are the three approaches to targeting?
- Concentrated marketing
- DIfferentiated marketing
- Undifferentiated marketing
Features of concentrated marketing:
- Targeting one or two segments
- Good for smaller businesses with limited resources
- Known as niche marketing
Features of differentiated marketing:
- Several segments targeted and product and marketing mix is adapted to appeal to each segment
- Only feasible for large companies
Features of undifferentiated marketing:
- Segments are ignored and company tries to reach entire market with single product and marketing mix
- Widely used products e.g. toothpaste
Influences on positioning:
- State of market
- Company’s current products
- Attributes of company
