chapter 9 - segmentation, targeting and positioning

Question 1

segmentation

Answer 1

identifying groups of similar needs and wants within a market

Question 2

demographic segmentation

Answer 2

segmentation concordant with the characteristics of the people in the target population

Question 3

geographic segmentation

Answer 3

segmentation groups need and wants based on geographical area in which customers are based

Question 4

behavioural segmentation

Answer 4

focuses on what customers usually do

• when they buy
• wether or not they are brand loyal
• the benefit they want from the product

Question 5

the value of segmentation

Answer 5

allows managers to understand what different groups want and tailor products to suit their needs
enables more focused and efficient marketing, time and money not wasted

Question 6

targeting

Answer 6

choosing which segments to focus on

Question 7

a business will target segments where it thinks:

Answer 7

• there is sufficient demand and potential profit to justify the investment
• it has the ability to be competitive and gain sales

Question 8

niche marketing

Answer 8

a business focusing on a specific segment

groups of customers are smaller but have clearly defined needs and wants

Question 9

value of niche marketing

Answer 9

may be possible to compete within a bigger market, without directly challenging bigger businesses and so being seen as less of a threat (may respond aggressively if challenged)

Question 10

downsides of niche marketing

Answer 10

• may not be particularly big therefore business may be vulnerable to losing some customers
• total profits may be relatively low
• if niche grows and becomes more popular then this may attract bigger businesses

Question 11

mass marketing

Answer 11

does not try to match needs of a specific segment precisely, aims to provide products that meet some of the needs of most of the people

Question 12

to be successful in the mass market requires

Answer 12

larger volumes to fulfil orders

therefore requires investment and capacity

Question 13

risks of targeting mass markets

Answer 13

• levels of investment required
• potential difficulties of competing against other business already in this market
• increasing numbers of niche providers gradually reduce demand as consumers look for something that meets their needs more precisely

Question 14

positioning

Answer 14

how a businesses products are perceived relative to their competitors