Flashcards in STP Deck (19):
Define segment marketing?
Market split into subsections of people with different needs within the larger market
What is targeted communication?
Where the advertising style differs depending on the target audience
Give 3 benefits of segmenting markets?
- Generates more profit by matching customer needs
- People stick to familiar brands, so will work their way through a product line if they like it (depends on income)
- It's profitable to segment even if it's not necessary
Give 3 disadvantages of segmentation?
- Can be expensive to make lots of specific versions of a product
- Target audience becomes small compared to mass marketing
- Different versions of a product may eat into the sales of the original design
What are the 3 methods of segmentation?
What is the most common method of segmentation?
What are the advantages/disadvantages of demographic segmentation?
Adv: Easy to define and measure - data publicly available
Dis: Demographics are only descriptive - don't identify individual preferences
What are the advantages/disadvantages of psychographic segmentation?
Adv: Detailed about the customers preferences
Dis: More difficult and expensive to collect
What are the 2 stages of segmenting organisational markets?
Describe the macro-segmentation stage of segmenting the market
Identify subgroups within the wider market that share characteristics
Describe the micro-segmentation stage of segmenting markets
Refinement stage - consumers' individual characteristics/preferences determined
More expensive stage
What are the 4 criteria for successful segmentation?
Briefly explain each
Distinctiveness - Boundaries between segments must be clear-cut
Tangibility - Decent-sized segments
Accessibility - Distribution/communications in the segment must be easy to access
Defendability - Company must be able to develop and defend a strong presence/comparative advantage in the segment
What are the 3 types of targeting?
What is undifferentiated targeting?
Where there is one price, one product, and the same promo techniques are used for the whole market (no segmentation - mass marketing)
What is differentiated targeting?
Where a different mix of products and prices cover different areas of the market.
Focus on a few segments
e.g. sports shoes / bread
What is concentrated targeting?
Focus on a single segment of the market
Can be very successful but attracts competitors
e.g. Gluten free products
What is positioning (3 details)?
How the company takes up a distinctive place in the market.
Establishes competitive advantage
Reflected in price, brand image, quality, communications
What is a perceptual map?
A graphical representation of the products position in its environment