Market Positioning and Segmentation

Question 1

Define MARKET SEGMENT

Answer 1

A market segment is a small part of the market that has its own characteristics, wants, needs, habits and buying preferences.

Question 2

In which ways can the business segment their market?

Answer 2

• Demographically
• Geographically
• By income
• By behaviour
• Physchographically

Question 3

What are the benefits to market segmentation?

Answer 3

• More targeted promotion
• Reduced costs due to successful marketing.
• Businesses can better meet consumer needs
• Differentiated products mean premium prices can be charged.
• Customers are likely to be more loyal.

Question 4

Define MARKET MAPPING

Answer 4

Market mapping is a diagrammatic technique that allows a business to identify their position in the market in relation to competitors, helping them to identify gaps and potential opportunities in the market as well.

Question 5

What are the advantages of market mapping?

Answer 5

• Helps firms to identify gaps in the market
• Identifies opportunities to re-position existing products.
• Gives businesses a better insight in how their product is viewed in relation to competitors.

Question 6

What are the disadvantages of market mapping?

Answer 6

• Only measured against two variables
• The market research the map is based on may be inaccurate or bias (particularly if it was collected by that business).
• Although there maybe a gap, there is not necessarily demand

Question 7

Define PRODUCT DIFFERENTIATION

Answer 7

Product differentiation is the unique feature that helps to distinguish a product from its competitors. This can be done through having a USP or building a brand.

Question 8

Define ADDED VALUE

Answer 8

Added value is the difference between the price of the finished product and the costs of making it.

Question 9

What is the socio-economic scale?

Answer 9

A - higher managerial. admin or professional e.g. company director
B - intermediate managerial, admin or professional e.g. middle manager
C1 - supervisory, junior manager or profession e.g. bank clerk
C2 - skilled manual workers e.g. plumber
D - non skilled manual workers e.g. labourer
E - unemployed e.g. state pensioners

Question 10

Define DEMOGRAPHICS

Answer 10

A demographic is a particular portion of a population, divided by factors such as age or gender.