Lecture 7 Targeting and Positioning Flashcards
What does market segmentation do?
Identifies bases for segmentation
Determines important characteristics of each market segment
What does market targeting do?
Evaluates the potential and commercial attractiveness of each segment
Select one or more segments
What does product positioning involve?
Developing a detailed product positioning for selected segments
Develop a marketing mix for each selected segment
What 3 factors are used for evaluating and selecting target segments?
Segment size and growth
Segment attractiveness
Company objectives and resources
What is size and growth of the segment relative to?
This is relative to the organisation
What is thought about in terms of size and growth?
Don’t have to go after the biggest market with the most growth
Can target smaller markets, this may not be attractive for some but not for others
What is meant by competitive position?
Are there lots of strong aggressive competitors in that market place?
Is it easy for new entrants to enter? Are there substitutes on offer?
Porters Five Forces
What does size involve?
How large is the target market and is it worth pursuing
What does expected growth involve?
Even if the market is small, it may be profitable if there are indications that it will grow
What sort of competitive position is attractive?
Low competition equals attractive market
Why is cost to reach important?
Need to know if the market is accessible with the chosen tactics
Why is compatibility important?
The market needs to be aligned to the goals
What are Porter’s five forces?
Competitors Buyers Substitutes Suppliers New entrants
In Porter’s five forces what is important in terms of competitors?
Market share/ volumes
Market sectors/ product/ service type
Market responses
In Porter’s five forces what factors make buyers important?
Price/ total purchases
Buyer concentration versus firm concentration
Ability to backward integrate
price sensitivity
In Porter’s five forces what factors make substitutes important?
Switching costs and propensity to substitute
Relative price performance of substitutes
In Porter’s five forces what factors make suppliers important?
Differentiation of inputs
Supplier concentration
Threat of forward integration
Switching costs
In Porter’s five forces what makes new entrants important?
Economies of scale
Government policy
Capital requirements
Proprietary products/ services/ technologies
What are 4 main threats to competitors on Porter’s five forces?
Threat of new entrants
Bargaining power of buyers
Threat of substitutes
Bargaining power of suppliers
What will compatibility of a market influence?
Size and growth
Competitive position
What needs to be thought about when looking at market compatibility?
The firm’s long term objectives
In terms of compatibility, when should a company enter a market segment?
A company should only enter a market segment in which it can create superior customer value and gain advantage over its competitors
What does the target market include?
This consists of a set of buyers who share common needs or characteristics
What is the chosen target market based on?
Segment analysis
In what way can targeting be carried out?
At different levels with a range of strategies
What are the 4 types of targeting strategy?
Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Concentrated (niche) marketing
Micromarketing
What does undifferentiated marketing involve?
It targets the whole market with one offer and ignores the segments
What does differentiated marketing involve?
Separate market segments are targeted with separate offers for each
What does concentrated marketing involve?
Concentrating on one or a few segments or niches
What are the two types of micromarketing?
Local marketing
Individual marketing
What is local micromarketing?
Targeting a city, neighbourhood or specific store
What is individual micromarketing?
Targeting one person
What does undifferentiated marketing focus on?
It focuses on what is common in a segment but not what is different