Topic 3: Marketing Management Flashcards
What is market segmentation?
Dividing a market into parts that reflect different customer needs and wants
Benefits of market segmentation (for small firms)
Offers a valuable strategy to break into a market
Benefits of segmentation for large companies
Methods of segmentation
Demographic segments
Geographic segments
Income segments
Behavioural segments
examples of behavioural segmentation
- by occasion
- usage
- loyalty
what is the process of segmentation
- conduct research into different types of customers
- see if there is any trend or correlation
- identify segment you wish to focus on
- devise a product
What is a target market ?
A set of customers sharing common needs and wants that a business decides
Influences on choosing a target market ?
depends on:
mission statement and corporate objectives
size of segments and level of demand
nature of the product
nature of competition
nature of market
What is mass marketing?
when a business sells into the largest part of a market
What is niche marketing?
business targets a smaller segment where customers have specific wants and needs
features of mass marketing
- general wants and needs
- higher production output so potential for economies of scale
benefits of niche marketing
- less competition due to fewer firms
- can charge a higher price
- loyal customers
- profit margins tend to be higher
downsides of niche marketing
- lack of economies of scale
- risk of over dependence, may go out of fashion
- can attract lots of competition of successful
what is market positioning/mapping
the range of positions that a product can take in a market based on two dimensions that are important to customers
advantages of market maps
identifies maps in the market
encourages use of market research
disadvantages of market mapping
- a ‘gap’ doesn’t mean there is demand
the values of segmentation
- improved sales volume
- increased prices
- increased diversification therefore security as you are appealing to multiple segments
what is a product?
anything that is capable of satisfying customer wants
what is brand extension?
business uses brand name on a new product e.g dove soap and dove shampoo
what is brand stretching
when a brand is used for a diverse range of products that aren’t connected
what is the boston matrix
a model that helps businesses analyze their portfolio of products
four categories of the boston matrix
stars
cash cows
question mark
dogs
dimensions of the boston matrix
market share and market growth
what are stars?
- high share of a growing market
- lots of competition
- need heavy investment to sustain growth
- will eventually become cash cows