Target Marketing and Differentiation Flashcards
Target marketing Definition
A target market is a group of potential customers with needs and wants that a business wishes to satisfy
What are the 4 main elements and dimensions of consumer markets
Demographic, Geographic, Psychographic, Behavioural
What does Demographic segmentation look at?
Based on specific variables: Age, gender, income, education, ethnicity, family size and life stage, religion and occupation category
What does Geographic Segmentation look at?
Targets products to people who live at a particular shop or specific location e.g. think of local fruit shops, dental shops
Climate is also a consideration for many industries - e.g. textiles, clothing and footwear or sports industry’s
Consumers in a cold climate like Melbourne look for complete different clothing items than those who live in a hot climate like Cairns
Population density - it is not enough to know how many consumers live in a specific state or city, our have to know how many people live in a particular radius.
Psychographic Segmentation
This refers to a consumer’s lifestyle and activities, personality, values, hobbies, degree of risk aversion, motives and opinions.
This assists with overall marketing strategy and targeting of promotional avenues
Attitudes = how we feel during the day, when were happy are we more likely to spend more rather when we are sad
Lifestyle and activities = someone who is striving for a healthy lifestyle may buy healthy foods, sports clothes etc.
Socio-economic groups: if you have a high paid job you are more likely to purchase prestigious items
Behavioural Segmentation
This looks at how consumers seek varying benefits from products and will use them in different ways.
Identifying what customers want from the product, or the benefits they seek, is a key aspect of this dimension.
Benefits may include quality, status, savings or convenience.
For example = customers who travel frequently, membership of the Qantas Club may offer benefits they seek such as faster check-in, extra baggage allowance, accrual of frequent flyer points and use of the Qantas Club lounge for refreshments, business facilities and meeting spaces, along with shower facilities.
Qantas also uses customer loyalty tools such as its Frequent Flyer program and Qantas Club to achieve loyalty status as, the more you fly with Qantas, the greater the rewards you receive
What is Product Positioning?
Þ Where your product/service fits in the market place and outlines all the features that make your product unique/ why that product is better than other product
How does a STP help a business
Þ Using an STP map helps a business focus on the audience (target market), rather than on the product or service.
STP Maps definition
As STP maps are based on perceptions (insight) from the consumer, they are also called perceptual maps.
What does the STP Map show me?
The STP map shows how consumers see competing products in the market, based on key attributes (like quality, price etc.).
What does the STP Map mean for the business?
When viewing an STP map, a business can either position its product to fill a gap in the market or elect to compete against other businesses with awareness of their positioning.
