Topic 2: Segmentation, Targeting, Differentiation and Positioning Flashcards
Market segmentation
involves analysing a market with the aim of directing marketing focus towards smaller segments of buyers with distinct characteristics or behaviours that might require tailored marketing strategies or mixes.
Market targeting (or targeting)
consists of evaluating each market segment’s attractiveness and selecting one or more market segments to enter.
Differentiation
involves differentiating the firm’s market offering from that offered by competitors, to create superior customer value
Positioning
consists of arranging for a market offering to occupy a clear, distinctive and desirable place in the minds of target consumers relative to competing products.
four important segmentation topics
1) segmenting consumer markets,
(2) segmenting business markets,
(3) segmenting international markets and (4) requirements for effective segmentation.
main variables that might be used in segmenting consumer markets
geographic, demographic, psychographic and behavioural variables
Geographic segmentation
calls for dividing the market into different geographical units, such as nations, regions, states, local government areas, cities or even neighbourhoods
Demographic segmentation
divides the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationality
Behavioural segmentation
divides buyers into segments based on their knowledge, attitudes, uses or responses to a product
Psychographic segmentation
divides buyers into different segments based on social class, lifestyle or personality characteristics
market segments must be
•Measurable: The size, purchasing power and profiles of the segments can be measured.
•Accessible: The market segments can be effectively reached and served.
•Substantial: The market segments are large or profitable enough to serve.
•Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.
•Actionable: Effective programs can be designed for attracting and serving the segments.
In evaluating different market segments, a firm must look at three factors
(1) segment size and growth,
(2) segment structural attractiveness, and
(3) company objectives and resources
target market
consists of a set of buyers who share common needs or characteristics that the company decides to serve
Market targeting can be carried out at several different levels. Figure 6.2 shows that companies can target
very broadly (undifferentiated marketing),
very narrowly (micromarketing) or
somewhere in between (differentiated or concentrated marketing).
Undifferentiated marketing
firm might decide to ignore market segment differences and target the whole market with one offer