Segmentation, Targeting and Positioning

Question 1

In theory, what are the advantages of mass marketing and producing one product for all?

Answer 1

• Lowers costs of marketing and production

* Simpler to manage

Question 2

What is the reality and disadvantages of mass marketing one product for all?

Answer 2

• The needs and wants of individual consumers can vary greatly
• What may be suitable for one customer may be completely inappropriate for another
• Consumers – want to stand out from crowd

Question 3

What is market segmentation?

Answer 3

The identification of individuals or organisations with similar characteristics that have significant implications for the determination of marketing strategy.

Question 4

What sport has particularly used market segmentation?

Answer 4

Football clubs with fan databases to help segment target market

Question 5

What are the advantages of market segmentation?

Answer 5

• Target market selection-who are we serving
• Tailored marketing mix- grouping of customers based on similarities
• Opportunities and threats-based on thriving or failing segments
• Differentiation-creating differential advantage over the competition

Question 6

Explain the stages of segmenting, targeting and positioning

Answer 6

• Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation)
• Select one or more market segments to enter (market targeting)
• Establish and communicate the distinctive benefit(s) of the company’s market offering for each selected target segment (market positioning)

Question 7

What are the main categories and sub-categories used for market segmentation?

Answer 7

• Behavioural- benefits sought, usage, occasion
• Psychographic- lifestyle, personality
• Profile-demographic, socio-economic, geographic

Question 8

Explain the usage sub-category of behavioural market segmentation?

Answer 8

light, medium & heavy users e.g. sports consumers may switch between watching FC or doing other physical activities and gym users vary
Brand loyalty status:
• Hard-core loyals
1 brand all the time

• Split loyals
loyal to 2/3 brands

• Shifting loyals
1 brand to another

• Switchers
No loyalty to any brand

Question 9

Explain the occasions sub-category in behavioural segmentation?

Answer 9

Time of day, week, month, year or any defined aspects of life
Buyers - occasions or need/buy product
e.g. gym membership may increase after new year and may be more need purchase

Question 10

What is an example of market segmentation in sport?

Answer 10

Sport England database on different parts of the population and their segments-used by sports organisations to target certain groups

Question 11

Explain the demographic subcategory in profile segmentation

Answer 11

• Age and life cycle/stage:
•Consumer wants, abilities change with age
• But, target may be psychologically young
• Different life stages in same life cycle
e.g. football clubs have discriminatory pricing allowing
cheaper fairs for +50yr olds
Gyms have child creche for gym parents
•Gender
e.g. family areas of football stadiums cater to different tastes often gender-based

Question 12

Explain organisational segmentation

Answer 12

Organisational market can be segmented into two broad categories: macro segmentation and microsegmentation

Question 13

What is macro segmentation?

Answer 13

Focuses on the characteristics of the buying organisation such as size, industry, location

Question 14

What is micro-segmentation?

Answer 14

More detailed and concerns decision making within each macrosegment e.g. choice criteria, decision making process

Question 15

What is target marketing?

Answer 15

The choice of which market segment(s) to serve with a tailored marketing mix.

Question 16

What are the target marketing strategies?

Answer 16

• Undifferentiated marketing.
• Differentiated marketing.
• Focused marketing.
• Customized marketing.

Question 17

What is undifferentiated target marketing?

Answer 17

Organisation—»>Marketing Mix—»>Target Market (everyone)
When there is an absence of segmentation and a single marketing mix is used for the whole market.
• May be due to costs
• No difference in customer characteristics that need to affect the marketing approach

Question 18

What is a differentiated marketing strategy?

Answer 18

When market segmentation reveals several potential targets, specific marketing mixes can be developed to appeal to all or some of the segments. e.g. Nike has marketing mix for athletes, fashion users and normal sports wear users

Question 19

What is focused target marketing?

Answer 19

When a company develops a single marketing mix aimed at one target market as other segments appear unattractive or out of line with business strengths -risky if that segment fails

Question 20

What is a customised strategy of target marketing?

Answer 20

When the requirements of individual customers are unique and their purchasing power sufficient to make a designing a separate marketing mix fo each customer viable.

Question 21

What are the criteria for assessing which segments to taregt?

Answer 21

• Segment Size and growth e.g. ageing profile of fans in football stadia=discounts for younger fans or Sky sports
• Segment structural attractiveness e.g. porter’s 5 forces
• Company objectives and resources e.g. financing

Question 22

What is positioning?

Answer 22

Ability to clearly position a product or service offering in the market place.

Question 23

What are the key tasks in positioning?

Answer 23

• Segment the market
• Target specific makret
• Design how to give customers a differential advantage

Question 24

What are the keys to successful positioning?

Answer 24

• Clarity-clear of target market and differential advantage
• Consistency-maintaining differential advantage to customers
• Credibility- customers must believe in the differential advanatge
• Competitiveness-should offer customers something competitors are failing to supply

Question 25

What analysis tools can be used to help position products?

Answer 25

Spidergram analysis and perceptual mapping to understand position of the brand in the market place and undersdand what attributes are associated with our brand and others

Question 26

How can a company reposition a product?

Answer 26

Using a form of ansoff matrix made of
• Image repositioning (same TM, same product)e.g. bonus point in RU
• Intangible repositioning ( Same product, different TM)e.g. Lucozade or sky sports
• Product repositioning (different product, same TM)
• Tangible repositioning (different product, different TM) e.g. 20/20 cricket

Question 27

What may cause positioning strategies to fail?

Answer 27

• Lack of creativity
• knowledge of customers
• Structural integration