SEGMENTATION + TARGETING + POSITIONING Flashcards
What is a market segment?
A sub group of consumers with simmilar characteristics in a given market
What is market segmentation?
The process of dividing the market into smaller or distinct groups of consumers in order to meet their needs and wants
Ways to segment the market
- Demographic: According to the varying characteristics of the population. (Age, Gender, Religion etc)
- Geographic: According to deifferent geographical sectors (different countries or rural/urban)
- Phsychographic segmentation: Accoridng to lifestyle or personality (socioeconomic status or values)
Advanatges of Segmentation
- Helps identify existing gaps and new opportunities
- Designing for a specific group increases sales and profitability
- Minimizes the waste of resources through identifying the right customers
Limitation of segmentation
It can be expensive, speciallly if the firm is studying a large segment
What is a target market?
A group of consumers with common needs or wants that a business sells or serves to.
What is targeting?
The process of marketing to a specific market segment
Mass Marketing
- Firm ignores the specific market segments and targets the entire market
- Business considers the common needs and wants
- Aims to sell to many customers to maximize their sales
Segmented Marketing
- Tragets several segments + develops appropriate marketing mixes for each of these segments
- Firms can gain a stringer position in each segment. This increases sales and market share.
Niche Marketing
- Appeals to smaller and more specific market segments
- Good startegy for smaller firms that have limited resources
- Few competitors
- Take advantage of opportunities that have been overlooked by larger firms
- Enables businesses to make their products more efficiently and effectively
Consumer Profile
Understanding consume profile is key to effective targeting.
Consumer profile is the characteristics of consumers of a particular product in different markets based on their gender, age, income level among other characteristics.
Positioning
Product positioning involves analyzing how consumers define or percieve a product compared to other products in the market.
Marketers have to plan positions that will give them competitive advatages.
Importance of a position map
- Helps establish competitors or threats
- Identify important gaps or opportunities
- Simple and quick way of representing data
- Helps firms target specific segments