Marketing - Strategies Flashcards
define market segmentation
involves dividing the total market into groups of people who share one or more common characteristics
what is the aim of market segmentation
The ultimate aim of market segmentation is to increase sales, market share and profits by better understanding and responding to the desires of the different target customers
what are the 4 main ways to segment a market
demographic, geographic, psychographic, behavioural
define geographic segmentation
the process of dividing the total market according to geographic locations
- businesses may need to divide the consumer market into regions because consumers in different geographical locations have different needs
define demographic segmentation
the process of dividing the total market according to particular features of a population eg. size of the population, age, sex, income, cultural background and family size
define psychological segmentation
the process of dividing the total market according to personality, characteristics, notices, opinions, socioeconomic group and lifestyles
- focuses on why people behave the way they do
define behavioural segmentation
the process of dividing the total market according to the customers relationship to the product
- this includes customers knowledge of, attitude towards or benefits sought from the product
- Identifying what customers want from the product is an important aspect of behavioural segmentation - by determining the benefits desired, marketers can design products that directly satisfy these needs
what is product and service differentiation
Occurs when products that are the same or similar are made to appear different from and/or better than those of competitors
- by achieving this, the seller is able to gain a little more control in the marketplace, especially with price
what is product/ service positioning
the technique in which marketers try to create an image or identity for a product compared with the image of competing products
- REpositioning focuses on changing what customers associate with the brand and sometimes competing brands.
what are some of the main differentiation points
-customer service
- environmental friendliness
- convenience
- social and ethical issues eg. ethical consumerism, fair trade movement
define product (in terms of the mktg mix)
goods or services that can be offered in an exchange for the purpose of satisfying a need or want
define total product concept
the tangible and intangible benefits (attributes) a product possesses → most products are combinations of tangible and intangible services
what are the main aspects of product
branding and packaging? NOT SURE THIS MIGHT BE BS
define branding
name, term, symbol, design or any combination of these that identifies a specific product and distinguishes it from its competition
benefits of branding
- helping customers: identify specific products they like, evaluate quality of products, reduce their level of perceived risk of purchase and gain a psychological reward that comes from purchasing a brand that symbolises status and prestige
- can help increase repeat purchases because consumers recognise products and are already familiar with the business
what are the main branding strategies
manufacturers brand, private/ house brand, generic brands
define packaging
the development of a container and the graphic design for a product
what are the benefits of packaging
- Well designed packaging gives a positive impressions of the product and encourages first time customers
- Packaging also preserves the product, protects the product from damage, assists with the display of the product and makes transportation and storage easier
Labeling = the presentation of information on a product or is package
→ Marketers can use labels to promote other products or to encourage proper use of products and therefore greater consumer satisfaction with products
what are the three main pricing methods
cost based pricing, market based pricing, competition based pricing
define price
the amount of money a customer is prepared to offer in exchange for a product
define market based pricing
a method of setting prices according to the interaction between the levels of supply and demand
→ when demand for a product is greater than its supply, there will be a shortage in the market = price increases
→ when the supply of product is greater than its demand, a surplus will exist in the market = price decreases
define cost based pricing
a pricing method derived from the cost of producing or purchasing a product and then adding a markup
- price = cost + cost markup percentage
benefits of market based pricing
benefits of cost based pricing
→ drawbacks include: difficult in accurately determining an appropriate makeup percentage as well as the fact that the product is priced after production and associated costs are incurred without taking into account the other elements of the marketing mix or the state of the market