Market Segmentation And Product Positioning Flashcards
What is Undifferentiated or Mass Marketing?
- Undifferentiated or Mass marketing
Focus on common needs of consumers in a market
and makes one homogenous offer to the whole market. i.e beef or wheat
What is Differentiated or Target Marketing
- Differentiated or target marketing
buyers have diverse needs - make heterogeneous
(different) offers.
Focus on segment with large number of
buyer/consumer with similar needs.
This marketing approach used for differentiated products / brands e.g. Uncle TOBYS
cereals OR Kellogg’s
Why is there Market Segmentation?
• Consumers and businesses have different needs, wants and demands and it is impossible for most organisations to successfully appeal to the entire market.
• Fundamental to the market success of all businesses / firms is to identify potential customers / consumers and to understand their needs.
•Market segmentation enables the organisation to form a strategy for a group (or segment) that has common features, rather than trying to market to everyone.
• The marketer seeks to identify and understand those parts
of the total market to which it can offer the most value.
What are the two broad market categories and segmentation?
a. Consumer markets (also known as B2C markets) that consists of households and individuals that buy products for private consumption.
b. Business markets (also known as B2B markets) that consists of individuals and organisations that purchase products to resell, to use in production or in business operations.
• In the food system, segmentation can be applied to all the buyers i.e.:
i. industrial users
ii. food services
iii. retailers
iv. final consumers
What is Macro Segmentation?
- Macro Segmentation such as
– Location – city, region, state, country, international region
– Size – small, medium & large (relative to company)
– Type of potential customer companies – processors, retailers,
exporter/importer, ingredient use, food service, wholesaler/distributor e.g. a supplier marketing pastry margarine could group the large companies as pie manufacturers, frozen pastry manufacturers, croissant manufacturers and biscuit manufacturers.
What is Micro Segmentation?
- Micro Segmentation - buyer company’s internal processes:
- suchasbuyingprocesses – centralised/decentralised, – local/regional/global
- technical expertise or product and service needs
– routine, modified rebuy or new task buying
- small, medium, large or irregular volumes
e.g. the above firms could be micro segmented as nationally owned or multinational companies; large, small or low volume purchasers
What are the two broad spectrums that Food and Market Segmentation are divided into?
Food Service Market Segments divided into two broad spectrums:
1. Commercial Customers such as fast food, fine dine restaurants, coffee bars etc. OR Company Organizations such as chain, group, caterers by size; by cuisine offered i.e. French, Italian and so on
2. Institutional Markets i.e. type of intuition, size and service provided e.g. hospital, prison or university
iii. Retail Market Segments varies from country to country & can
be divided into
– Hyper markets
– chain supermarkets
– small super markets
– corner or convenience stores
– specialty stores and so on.
What is the Market Segment?
- Market Segment is a group of customers or consumers that have similar attitudes or behaviour towards a product i.e. defined by similarities.
- Market Segmentation is the process of identification of such groups.
What is Targeted Marketing?
•Targeted marketing is based on buyers or consumers grouped into segments. It aims to meet their needs and wants in common that are a good match with the organisation’s ability to deliver value better than competitors.
What does Market Research do ?
• identify the different market segments & select those most suitable • the needs of customers and consumers in the segment Desk top research Field research Macro market opportunities Specific markets Segments The marketing mix • Product • Price • Place • Promotion specifically designed for • positioning products, prices, marketing channels and promotions for each segment for final market strategy
When does Market Research begin?
- Consumer market research begins with understanding consumers’ needs and attitudes (secondary (used 2nd time) & primary (collected) data sources)
- Industrial marketing follows the same process as consumer market research but the data sources might be different such as industry statistics
What is Secondary Market Research?
Secondary market research uses a range of secondary data sources such as
• government reports and trade statistics • international reports and statistics
• reports and surveys from a range of sources
What is Primary Market research?
Primary market research is gathering and analysis of first hand data to determine consumer attitudes towards different products (such as usage patterns, buying quantities, preparation methods, eating habits and so on). Some of the methods are as follows: • face to face interviews • consumer surveys • focus groups • industrial market surveys Examples: •Fast Food in Australia •Restaurant consumer segments by Income
What are the requirements for effective Market Segmentation?
To be of value, market segments must have the following characteristics:
• Measurable - size & purchasing power of segment
• Accessible - degree segment can be reached & serviced
• Substantial - segments are large & profitable enough to warrant differentiation
• Actionable/Responsive - degree different market mix can be designed & implemented (product, price, promotion & place)
• Align with company objectives
• Company can out compete other organisations
What are the 5 segments consumer markets can be put into?
Consumer markets can be segmented using five broad approaches:
- Geographic
- Demographic
- Socio-cultural
- Psychographic
- Behavioural
