Lecture 2 Flashcards
What is market segmentation?
It is when we separate the market into smaller groups, allowing companies to focus on a specific consumer base
What is the purpose of market segmentation?
The purpose of market segmentation is to enable firms to tailor the marketing mix to meet the needs of those segments
What is a niche market?
A niche market is a smaller market close to the main core target market
What sets a niche market apart from the core?
They have a set of distinctive traits that set them apart from the core such as different needs, desired benefits, etc
Could a niche market become a target market?
Yes it can (ex. electric cars)
What are the four terms of segmentation?
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioural segmentation
What is geographic segmentation?
It is when the market is divided into different geographical units
What is demographic segmentation?
It is when the market is divided based on factors such as age, gender, and family size
What is psychographic segmentation?
It is when the market is divided based on social class, lifestyle or personality characteristics
What is behavioural segmentation?
It is when the market is divided based on consumer behaviours
Why is age important?
It is important because consumer needs change over time with age, leading to different consumer needs and wants
Why is income important?
It is important to consider income when coming up with a marketing strategy as there are consumers who care about the price of a product and those who do not
Why is education important?
Different buyers will consume information differently leading to the necessity of identifying how to most effectively convey a message to a certain group
Why is social class important?
We need to consider what values a firm is wishing to appeal to
Why is lifestyle important?
We need to consider how a product may fit into the life of the consumer
What is user status?
Is the consumer a returning user? A new customer?
Why are occasions important?
Its important to consider when you would like a consumer to purchase a product
Why are benefits sough important?
Its important to take into account the benefits consumers my be searching for, allowing the firm to set them apart from the competition
What are the factors that companies must take into account when deciding which market segment they wish to target?
Segment size and growth
Segment structural attractiveness
Company objectives and resources
What is differentiated marketing?
Involves marketing in a number of segments, developing separate marketing strategies for each. By zoning in on a market can lead to increased sales
What is undifferentiated marketing?
Involves ignoring segment differences and offering just one product/service to the market, aka the firm creates a product that appeals to the largest amount of consumers possible
What is concentrated marketing?
It is a marketing-coverage strategy that involves the firm going after a large share of one or a few submarkets
What are the factors that are involved in ensuring that the position chosen allows companies to gain competitive advantage?
This includes the brand reputation, awareness and product advantages that are shown in the advertising
What are the 3 focuses of positioning strategies?
- They can focus on specific product attributes
- They can focus on the benefits they offer
- They can focus on how the product is positioned directly against a competitor
