Segmentation and Targeting Flashcards
What does it means to “segment” a market?
It means dividing a market into smaller groups with distinct NEEDS, CHARACTERISTICS or BEHAVIOR, who might require a separate product or marketing mix. (Reached more efficiently and effectively)
To be useful, market segmentation must be:
- Measurable
- Accessible
- Substantial
- Differentiable
- Actionable
What are the different ways of segmenting a market?
- Geographical
- Demographic
- Psycho-graphic
- Behavioral
What does it mean to segment a market “geographically”?
It means to segment a market into units such as nation, states, countries or cities. (Different needs and wants in different geographical locations)
What does it mean to segment a market “Demographically”?
It means to segment a market based on variables such as age, gender, family size, family cycle, income.
What does it mean to segment a market “Psycho-graphically”?
It means to segment a market based on social class, lifestyle, or personality characteristics.
What does it mean to segment a market “Behaviorally”?
It means to segment a market based on their knowledge, attitude or responses to a product.
Under demographic segmentation, what does it mean to use “age and life-cycle segmentation”?
It means to offer different products or use different marketing approaches for different age and life-cycle groups.
What are some segmentation groups under behavioral segmentation?
- Occasion
2. Benefit
What is “Occasion segmentation”?
Dividing a market into groups according to occasions when buyers get the idea to buy actually make their purchase, or use the purchased item.
What is “benefit segmentation”?
Dividing a market into groups accoridng to the different benefits that consumers seek from the product.
What are some factors under benefit segmentation?
- User status (non-users, ex, first time)
- Usage rate (light, medium and heavy users)
- Loyalty status (Loyalty points)
How does a firm effectively target the market?
- Evaluation criteria (of own company)
2. Target market selection
What are the 3 factors firms consider for evaluation criteria?
- Size and growth (of market)
- Structural attractiveness
- Firm’s Characteristics
Under targeting, what are the different types of marketing?
- Undifferentiated marketing
- Differentiated marketing
- Concentrated
- Micromarketing
What is undifferentiated marketing? (mass)
Undifferentiated marketing is where marketers focus to appeal to the biggest number of buyers
What is differentiated marketing?
Differentiated marketing is where there are different marketing programs for different segmentations.
What is concentrated marketing?(niche)
Concentrated marketing is where marketers target one sub-market (cater to small group of customer)
What is micro-marketing?
Micro-marketing is where marketers tailor products and marketing program to suit the taste of specific individuals.
What are the pros and cons of undifferentiated marketing?
(+): super cost efficient
(-): It overlooks smaller segments
What are the pros and cons of differentiated marketing?
(+): More sales than undifferentiated marketing
(-): Increase business cost/Possible over segmentation
What are the pros and cons of concentrated marketing?
(+): Good for resource limited firms
(-): Higher risk: due to limited segment, it can turn sour or have big competitor.
Under targeting, If company have finite resources which marketing strategy should they adopt?
Concentrated. This is because it requires low resources.
Under targeting, if a company has limited number of product variability, which strategy should they adopt?
Undifferentiated. This is because with low variability it is difficult to target specific segments. hence, company should just mass market.
Under targeting, if the company is introducing a new product, which strategy should they adopt?
- Undifferentiated: if there is only 1 version of the product.
- Concentrated marketing if the company start out with less resources.
Under targeting, if the company is targeting market with changing taste and preference, which strategy should they adopt?
Undifferentiated marketing. Since it is difficult to identify specific segments, it is better to just target all segments.
Under targeting, if the company have vast resources, which marketing strategy should they adopt?
Differentiated marketing. This is because differentiated marketing is expensive, yet able to generate more sales than undifferentiated marketing.
Under targeting, if the company have high number of product variability, which strategy should they adopt?
Differentiated or Concentrated marketing: Able to product different products for different resources but differentiated marketing is more expensive.
Under targeting, if the company is marketing a matured product, which strategy should they adopt?
Differentiated marketing: This is because there are more products in the market already, hence able to target different segments.
Under targeting, if the company is targeting a market with unchanging tastes and preferences, which strategy should they adopt?
Differentiated marketing. This is because they would be able to identify and target different segments effectively.
