Segmentation, Targeting and Positioning Flashcards
In theory, what are the advantages of mass marketing and producing one product for all?
- Lowers costs of marketing and production
* Simpler to manage
What is the reality and disadvantages of mass marketing one product for all?
- 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
What is market segmentation?
The identification of individuals or organisations with similar characteristics that have significant implications for the determination of marketing strategy.
What sport has particularly used market segmentation?
Football clubs with fan databases to help segment target market
What are the advantages of market segmentation?
- 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
Explain the stages of segmenting, targeting and positioning
- 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)
What are the main categories and sub-categories used for market segmentation?
- Behavioural- benefits sought, usage, occasion
- Psychographic- lifestyle, personality
- Profile-demographic, socio-economic, geographic
Explain the usage sub-category of behavioural market segmentation?
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
Explain the occasions sub-category in behavioural segmentation?
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
What is an example of market segmentation in sport?
Sport England database on different parts of the population and their segments-used by sports organisations to target certain groups
Explain the demographic subcategory in profile segmentation
• 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
Explain organisational segmentation
Organisational market can be segmented into two broad categories: macro segmentation and microsegmentation
What is macro segmentation?
Focuses on the characteristics of the buying organisation such as size, industry, location
What is micro-segmentation?
More detailed and concerns decision making within each macrosegment e.g. choice criteria, decision making process
What is target marketing?
The choice of which market segment(s) to serve with a tailored marketing mix.
What are the target marketing strategies?
- Undifferentiated marketing.
- Differentiated marketing.
- Focused marketing.
- Customized marketing.
What is undifferentiated target marketing?
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
What is a differentiated marketing strategy?
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
What is focused target marketing?
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
What is a customised strategy of target marketing?
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.
What are the criteria for assessing which segments to taregt?
- 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
What is positioning?
Ability to clearly position a product or service offering in the market place.
What are the key tasks in positioning?
- Segment the market
- Target specific makret
- Design how to give customers a differential advantage
What are the keys to successful positioning?
- 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
What analysis tools can be used to help position products?
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
How can a company reposition a product?
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
What may cause positioning strategies to fail?
- Lack of creativity
- knowledge of customers
- Structural integration
