Module E Flashcards
(8 cards)
What is market segmentation
A large diverse fragmented market divided into smaller segments each with their own characteristics and behaviours
What types of markets can be segmented
Consumer markets
Business markets
International markets
Segmentation of a consumer market
Geographic segmentation - divides market into different geographical units
Demographic segmentation - divides market into groups based on demographic segmentation such as age, gender, income, occupation
Psychographic segmentation - divides market into groups based on social class, lifestyle and personality traits
Behavioural segmentation - divides market into groups based on knowledge, attitudes, uses or responses to a product
Segmentation of a business market
Can be segmented:
- Geographically
- Demographically (industry/company size)
- Benefits sought
- Loyalty status
- Purchasing approaches
Segmentation of an international market
Geographic location - segmentation by region such as Africa, Asia, Europe
Economic factors - businesses more active in developing countries like Brazil, India and China
Political-legal factors - Stability of the government is very important to the organisation
Cultural factors
Characteristics of an effective segment
M.A.S.D.A
Measurable - The size and purchasing power profiles of the market must be measured to create relevant advertisements and data
Accessible - Customers easily reached at an affordable cost
Substantial - A substantial number of the market to be penetrated
Differentiable - When segmenting, a company should make sure that different markets respond differently to different marketing strategies
Actionable - market segments need to be actionable, meaning that they have practical value. A market segment should be able to respond to a marketing strategies in a way that can be easily quantifiable
How can targeting be carried out
From targeting broadly to targeting narrowly:
Undifferentiated (mass) marketing - targeting the whole market eg with one offer. Focuses on the general consumer needs
Differentiated (segmented) marketing - targeting several markets and providing separate offers for each
Concentrated (niche) marketing - Targets a small share of a large market. This gives the company a strong position as it has good knowledge of the consumer needs of the segment it serves
Micro marketing - Tailoring products and marketing programs to suit the taste of specific individuals and locations
Can be split into:
; Local marketing - businesses see the individual in every customer
; Personalisation marketing
How can a company differentiate itself from competition
Product differentiation - brands can be differentiated based on features, performance and style
Services differentiation - Firm offers service such as speedy delivery and better after sales service
Channel differentiation - Choosing the right channel through which brand eg online shopping Vs physical shopping
People differentiation - Hiring and training people better than competitors do.
Image differentiation - Choice of symbols which are used in advertising to symbolise the brand eg swoosh of Nike, golden arches of McDonalds
