Market Segmentation + Mapping + Product Differentiation (1.1.2/1.1.3) Flashcards
What are the ways to segment a market? (6 ways)
-Age
-Gender
-Income
-Hobbies/Lifestyle
-Interests
-Location
What is Market Segmentation?
When the Market is split into different sections to narrow down which section of the market is likely to buy your products.
Why should Brands segment the Market?
Brands segment the market so they can target certain people and not everyone. If they were to advertise their brand to everyone a lot of people wouldn’t be interested so it would be a waste of money whereas by segmenting the market and only targeting a certain group they aren’t wasting money. It can lead t0 more sales if you focus on target market.
Why Brands shouldn’t segment the Market?
If Brands segment their market then a business could be missing out on sales due to the people interested in a hobby that includes the brands products. It could be that a person is starting to do horse riding and need all the equipment but if a Brand only targets people who already horse ride then they are missing out on the sales of the new people. It also means there isn’t much room to grow as only scouting one group.
What is Market Mapping?
A map that helps a business Spot a gap in the market. Helps to understand your competition, encourages you to do research and encourages you to develop ways of creating a competitive advantage.
It means that there less competition and doesn’t guarantee success, can increase costs of a business as have to take out market research.
What is Product Differentiation?
The process of making a product unique or distinctive.
How does Product Differentiation set you apart from competitors? (5 ways)
-Its hard to copy
-Build a connection with customers
-Strengthen Brand Loyalty
-Adding value increases price
-Increased Profit Margins
