Market Segmentation and Competitive Advantage Flashcards
What is market segmentation:
Market segmentation is when a business splits a market in different sections of consumers, each with a similar set of needs.
What are the 4 types of market segmentation:
- Geographic Segmentation
- Demographic Segmentation
- Psychographic Segmentation
- Behavioural Segmentation
What is Geographic Segmentation:
-Grouping customers together based on where they live.
What is Demographic Segmentation:
-Grouping customers based on their age, gender, income, social class, ethnicity or religion.
What is Psychographic Segmentation:
-Grouping customers based on their attitudes, opinions and lifestyles.
What is Behavioural Segmentation:
-Grouping customers based on their behavior towards a product, i.e. their usage rate and loyalty towards the product.
What is Competitive Advantage:
-Competitive Advantage means to gain something over your competitors by having a unique feature which makes your product superior to theirs.
Ways businesses can get competitive advantages:
Product design.
Product quality.
Promotion.
Customer service.
Other ways businesses can get competitive advantages:
-Delivery times.
Ethical stance.
Flexibility.
What are two key sources of competitive advantages:
- Cost advantage: where a business is able to produce its product at lower cost than the competition.
- Differentiation advantage: Where a business is able to differentiation its product
What is Cost advantage:
-Where a business is able to produce its product at lower cost than the competition.
What is Differentiation advantage:
-Where a business is able to differentiate its product from the competition such that customers perceive superior value.
