Target markets and segmenting markets- pages 10-13 Flashcards
How do enterprises choose the most suitable promotional mix?
It is based on whether they are targeting a business to business (B2B) market or business to consumer market (B2C).
What is a B2B market?
An enteprises sells its goods to another enterprise. The goods may be raw materials, equipment or items for resale
What is a B2C market?
An enterprise sells its products- goods/services directly to customers at their business
Name a method of promotion in B2B markets…
B2B enterprises generally consist of large companies, Enterprises may use expensive methods of promotion such as advertising nationally- direct marketing or personal selling
Name a method of promotion in B2C markets…
B2C markets, target individual consumers using promotional methods such as money-off vouchers, discounts and loyalty incentives- advertising, sales promotion and public relations
Name a example of a B2C
When you buy a new phone/chocolate bar or anything for yourself
What is a target market?
A particular group of consumers at which a product or service is aimed
Market segmentation definition
This is where a market can be divided into different sections or different segment for various reasons
What is a segment made up of?
Customers who have similar characteristics and needs
Why do enterprises segment the market?
- To better understand the characteristics and needs of the customers better
- To develop products that suit the needs of different market segments
Name the four ways in which a business can segment the market…
- Demographic
- Geographic
- Psychographic
- Behavioral
Demographic segmentation
Covers various characteristics of consumers age, gender, family size, ethnicity/race, religious and cultural beliefs, income and education level
Geographic segmentation
Different needs based on where you live
Psychographic segmentation
Grouping according to social class, attitudes, lifestyle and personality
Behavioral segmentation
Based on how people relate to the product, including consumer spending choices and how often customers buy products (usage rate)
List the types of demographic
age, gender, family size, ethnicity/race, religious and cultural beliefs, income, socio-economic group and education level
Gender meaning in demographic
Men and women have different tastes, interests and needs
Income meaning in demographic
People with higher income may have money to spend on luxury brands, such as designer clothing
Education level meaning in demographic
People with a higher education may earn more and spend their extra income
Socio-economic meaning in demographic
People’s social class is based on their income and type of occupation
Ethnicity/race meaning in demographic
These may influence people’s choice of food, clothing and cultural preferences. Some food companies may target their products at specific communities
Family size meaning in demographic
Larger families usually buy products such as food and washing powder in bigger quantities
Age meaning in demographic
People’s tastes, interests and needs may change at different life stages
Geographic example
Where people live influcences the products they buy, for example people living in cold climates will need different types of clothing compared to people living in hot climates
What are the consumers in psychographic segmentation mainly segmented into?
- Personality
- Likes and dislikes
- Values
- Lifestyle
- Attitudes
- Interests
Spending and consumption in behavioral segmentation
Enterprises will need to take into account how much money customers have available to spend. This can be affected by how well the country’s economy is doing.
Usage rate in behavioral segmentation
This measures how regularly customers buy products
Loyalty in behavioral segmentation
To encourage customers to keep buying their products. an example would be loyalty cards
Desired benefits in behavioral segmentation
Products have features that provide benefits to customers or meet their needs, for example electronic cars for environmentally drivers
