Segmentation, Targeting and Positioning

Question 1

What is a Market?

Answer 1

A GROUP of people, who, as INDIVIDUALS or as organisations, have needs for products and have the ABILITY, WILLINGNESS, and AUTHORITY to purchase them.

Question 2

What is a Market Segment?

Answer 2

INDIVIDUALS, GROUPS OR FIRMS with one or more similar characteristics that cause them to have similar product needs

Question 3

What is Market Segmentation?

Answer 3

The PROCESS of DIVIDING a total market into groups with relatively SIMILAR product needs to design a marketing mix that matches those needs.

Question 4

The Target Market Selection Process:

Answer 4

1. Identify the appropriate targeting strategy
2. Determine the segmentation variables
3. Develop market segment profiles
4. Evaluate relevant market segments
5. Select specific target markets

Question 5

The Target Market Selection Process:

Step 1 - Identify the Appropriate Targeting Strategy:

Answer 5

Undifferentiated strategy - Organisation design a SINGLE marketing mix and DIRECTS it at an ENTIRE market for a particular product
Concentrated Strategy - Organisation targets a SINGLE MARKET segment using ONE marketing mix
Differentiated Strategy - Organisations targets TWO OR MORE SEGMENTS by developing a MARKETING MIX for each. E.g. Bonds were for men, now are for men and women.

Question 6

The Target Market Selection Process:

Step 2 - Determine the Segmentation Variables:

Answer 6

Demographic variables
Geographic variables
Psychographics
Behavioural variables

Question 7

The Target Market Selection Process:

Step 5 - Select Specific Target Markets:

Answer 7

Segmentation analysis will show if the consumer needs are HOMOGENEOUS and would benefit from an undifferentiated targeting strategy

Question 8

What is Product Positioning?

Answer 8

CREATING and MAINTAINING a certain CONCEPT of a product in customers’ mind

Question 9

Why would Product Repositioning be necessary?

Answer 9

May be required to STRENGTHEN market share and PROFITABILITY