3.3.3 Flashcards
(20 cards)
What is segmentation?
= The process of identifying different groups of similar needs
List the 4 groups of segmentation approaches
- Geographical
- Demographic
- Behavioural
- Income
List 4 benefits of segmentation
- Reduces risk
- Low cost for supplies
- Increased brand loyalty
- Reduces brand sensitivity
- Reduces wasted promotion
- Reduces price sensitivity
- Easy to reach target audience through specific needs
List 4 disadvantages of segmentation
- Time consuming
- Expensive to research
- Opportunity cost
- Additional marketing activities required
- Potential for the brand to lose its identity
What does whether a business benefits from market segmentation depend on? List 3
- Consumer behaviour varying
- If particular segments can be identified
- If the firm can reach the segment directly
- If profit is generated
What is targeting?
= The process of a business deciding which segments to operate in
Lisf 4 influences on choosing the target segment
- Corporate objectives
- Customer needs
- Nature of product
- Competition
- Costs
- Sales volume
- Profit margin
- Potential growth of the segment
- Size of the segment
What is positioning?
= How a business’ products are perceived relative to their competitors
What is market mapping?
= A tool that analyses market conditions in order to identify the position of a product or brand
List 2 reasons as to why market mapping useful
- Helps identify gaps in the market
- Helps make more justified decisions about consumer needs
- Shows where demand is high
- Allows you to see how competitive the market is
What are the 5 key factors which may influence a company’s positioning?
- Benefit of the product
- Competition
- Product use
- Product user
- Pricing
What are the 5 values of market positioning?
- Allows sales maximisation
- Reduce costs
- Encourages focus
- Increases efficiencies
- Gives scope for high sales
What is mass marketing?
= Devising a product and marketing strategy to appeal to a large number or customers
What is the logic behind mass marketing?
= Creation of generic products which have a universal appeal in the market and its large pool of customers
List 2 advantages and disadvantages of mass marketing
- Large scale production
- High revenues
- Barriers to entry
- R&D
- Increased brand awareness
- Fixed capital
- Changes in demand
- Effects of standardisation
- Competition
- Adding value
What is niche marketing?
= Tailoring a product and its marketing strategy to cater for a specialised group of its customers
What is the logic behind niche marketing?
= Creation of a unique specialised product which places greater emphasis on quality over scale
List 2 advantages and disadvantages of niche marketing
- Less competition
- Low costs
- Small scale production
- Tailor made products
- Lower profits
- Changes in demand
- Market entry
What is product differentiation?
= The degree to which consumers see a particular brand as being different from competitor brands
List 4 ways in which businesses differentiate from competitors
- USP’s
- Prices
- Quality
- Advertisements
- Loyalty cards
- Allergen free
- Branding
- Ethicality
- Widening the product portfolio
