3.3d - STP: Targeting and Positioning Flashcards
Targeting definition
Deciding on which consumers or market segments a business will sell to
What are the different approaches to targeting?
- Concentrated marketing (niche marketing)
- Differentiated marketing
- Undifferentiated marketing
What does concentrated marketing involve?
Targeting one or two segments
What does differentiated marketing involve?
Targeting several segments and adapting the marketing mix to appeal to each segment
What does undifferentiated marketing involve?
Ignoring segments and trying to reach entire market with a single product and marketing mix
Niche market definition
A smaller segment of a market with specific needs and wants
Advantages of targeting a niche market:
- Charge more
- Less competition
- Specialist area
- Customers are more loyal
Disadvantages of targeting a niche market:
- Possibly lower profits due to limited customers
- Risk of over-dependence on single market
- Likely to attract competition
- Vulnerable to market changes
Mass market definition
The largest part of the market where there are many similar products on offer
Advantages of targeting a mass market:
- High revenues
- High levels of marketing creates a barrier to entry for new firms
Disadvantages of targeting a mass market:
- High costs
- Vulnerable to competition
- Less scope to add value to products
What does positioning involve?
Understanding how to position your product in relation to others within the market
What features can a business use to position a product in order to achieve a competitive advantage?
- Differentiated features
- Pricing
- Use of product
- Target market
What are the influences on positioning?
- State of the market
- Company’s current products (will position new products in similar place)
- Attributes of company (position to match strengths and weaknesses)
