Chapter 9 / Segmentation, Targeting and Positioning

Question 1

What is market segmentation?

Answer 1

Dividing the market into groups with similar characteristics or needs. e.g into age or income groups

Question 2

What is market targeting?

Answer 2

Deciding which market segment to focus on and adapt the product and the marketing mix to this group.

Question 3

What is market positioning?

Answer 3

This is when you positon the product in the target customers minds so they see it as better than the competition.

Question 4

In what ways can you segment a market?

Answer 4

Demographics - a company may target a specific age range, gender, occupation even family size.
Geographic - Neighbourhood, city, country. E.g.
( irn bru )
Income - high incomes, luxury brands aim a high-income people

Question 5

What is segmentation useful for?

Answer 5

Identifying new customers,markets and products.

Question 6

What is segmentation bad for?

Answer 6

Distracting companies to ignoring potential customers’ needs.

Question 7

What are the different ways to target segments?

Answer 7

1) Concentrated marketing involves targeting 1-2 segments
2) Differentiated marketing is when several segments are targeted and the product is adapted to the segments.
3) Undifferentiated marketing is when the segments are ignored and the company tries to reach the market with 1 product.

Question 8

What are niche and mass markets?

Answer 8

Concentration marketing is Niche Marketing, with less competition as larger business don’t target smaller markets.
Mass markets are designed to appeal to lots of consumers.

Question 9

Positioning of a product in a customer’s mind

Answer 9

Once segments are decided a company needs to think about positioning.
Positioning is creating an image of your brand or product in the mind of your target customer.
Customers have a mental map of the market and will position new products besides the alternatives.
To position your product well you have to convince target customers that your product has benefits for them.

Question 10

What influences positioning?

Answer 10

1) State of the market - if the economy is in recession then companies make customers believe it’s the best value for money.
2) Company’s current products - the company’s other products are seen as reliable and cheap, and they position new products similarly.
3) Attributes of the company - companies need to position a product to match their strengths and weaknesses.