segmentation, target marketing and positioning

Question 1

market segmentation definition

Answer 1

the process of diving a market into distinct groups of buyers with similar requirements

-stp approach
define customer groups, select those they wish to serve, then integrate the marketing mix to establish a unified image of the product relative to the competition

Question 2

requirements for effective market segmentation

Answer 2

-adequate size
is the segment profitable enough
-measurability
can info about the buyers be obtained
-accessibility
can the firm market ‘make contact with’ the segment
-responsiveness
are the segments different from each other
-compatibility
do the firms strengths match the state of the market.

Question 3

steps of segmentation

1.define the market

Answer 3

– A market is the set of all actual and potential buyers of a product. They share a particular need or want that can be satisfied through exchange.

Question 4

steps of segmentation

2. segmenting markets

Answer 4

– Demographic/social
• age, sex, location, family size, family life cycle, income, occupation, education, religion, nationality
– Psychographic
• lifestyle or personality characteristics.
– Behavioural
• knowledge of, attitude towards, uses for and responses to a
product
– Benefits sought
• delivery, product features, price/service

Question 5

steps of segmentation

2. segmenting process

Answer 5

define market
select basis for segmentation
conduct research
profile segments

Question 6

steps of segmentation

3.targeting

Answer 6

Selecting one of more of the market segments and developing marketing programs (including products) that are tailored for each segment
consider
-segment size and growth
-segment structural attractiveness 
-company objectives and resources

Question 7

4. positioning

Answer 7

Positioning is the process of creating in the mind of consumers an image, reputation or perception of the organisation or its products relative to competitors
– Product differentiation
• Performance, style, design, durability, etc. – Services differentiation
• Delivery, installation, repair, training, etc. – Personnel differentiation
• Employees’ competence, skills, knowledge, etc.
– Image differentiation
• Company image, brand image, etc.