Session 4 Flashcards
(21 cards)
What is segmentation?
Identify variables that allow you to break up the market into different groups of people
What is targeting?
Evaluating the attractiveness of the segments, and choose a segment to market to
What is positioning?
Orient your marketing actions to meet needs of the target segment
What is market?
People or organizations with needs or wants and the ability and willingness to buy
What is market segment?
A subgroup of people or organizations that (1) have a similar product needs; (2) will respond similarly to marketing action
Market segmentation?
The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
What is undifferentiated/mass marketing?
Marketing to the entire market in the same way
What is goal of undifferentiated/mass marketing?
Reach the widest audience possible
What are advantages and disadvantages of undifferentiated/mass marketing?
A: Save resources because you only have to manage one product
D: Not all products truly have a mass appeal
What is differentiated/segmented marketing?
Separate offerings for separate target markets
What is goal of differentiated/segmented marketing?
Increase sales in each target market
What are advantages and disadvantages of differentiated/segmented marketing?
A: Create strong market presence
D: Can be expensive and challenging to succeed in multiple target markets
What is concentrated/niche marketing?
Focus only on small target market
What is concentrated/niche marketing?
Establishing a competitive advantage amongst this ‘minimum viable audience’
What are advantages and disadvantages of concentrated/niche marketing?
A: Saves resources - especially good strategy for smaller companies
D: Vulnerable to changes in demand amongst the niche market
Why do we segment? (3) + (1) thing we must ensure
- More precise definition of who your customers are and what they need
- Clarify marketing objectives
- Improve resource allocation
- BUT, we need to find a segment that is small enough to serve, and large enough to be profitable
How to segment (2 principles)?
- Know your market (and deliver what THEY need)
- Aim to be the best for the particular market segment you serve (be best at something, good enough at everything else, deliver value to customers better than competitors)
How to segment (5 parts)?
- Establish strategy and objectives
- Group buyers into segments
- Evaluate segment attractiveness, target market size
- Select your target segment(s)
- Take marketing actions to reach target segments
How to group customers into segments? (3)
- Understand the benefits that the customers seek
- Partition the market and develop prototypical customer profiles based in those benefits
- Find observable segmentation bases (geography, demographics, psychographics, behaviors) that discriminate among the benefit segments.
What are observable segment bases (4)?
- Geographic (country, province, city, rural/urban)
- Demographic (age, gender, family size, income)
- Psychographic (personality, lifestyle, attitudes)
- Behavioral (observed behaviors like prior use)
What are 5 criteria for choosing desirable target market?
- Size
- Growth
- Cost of reaching them
- Compatibility/ ease of entry
- Competitive position
