unit 3 - chapter 9 Flashcards
segmentation definition
occurs when similar customers needs and wants are grouped within a market
market segments definition
the groups of similar needs and wants within a market
demographic definition
the characteristics of the people
what are 4 ways to categories by segmentation
- demographic segmentation
- geographic segmentation
- income segmentation
- behavioral segmentation (what customers actually do)
what are the 4 examples that behavioral segmentation analyses
- when the buy
- how much they buy for
- brand loyalty?
- the benefit they want from the product
what are 2 benefits of segmentation
- managers can understand what different groups want rather than treat all customers the same
- cheaper, not wasting money on advertising in the wrong place
targeting definition
occurs when a business decides which segments it wants to operate in
influences on choosing the target market
- there is sufficient demand and potential profits
- ability to be competitive and gain sales
niche marketing definition
focuses on a particular segment of the market
3 benefit of niche market
-compete with bigger market without directly challenging them (no threat)
-consumer loyalty
-more inelastic demand because unique product (higher prices)
2 negatives of a niche market
- total profits quite low, vulnerable to failing
- bigger niche market grows, attracts bigger businesses due to profits available (moving mainstream and competing)
mass market definition
aims to provide products that meet some of the needs of a large proportion of the market
positioning definition
identifies the benefits and price combination of a product relative to competitors
what 3 things needed to survive in a mass market
- larger volumes to fulfil orders
- promotional techniques to reach more customers
-potentially more competition
what are the 2 risks of a mass market
- levels of investment required
- difficulties competing against other businesses already in the market
