Market Segmentation, Targeting, and Positioning in Business

What is the difference between customers and consumers?

Customers purchase the product while consumers use the product.

What is a target market?

A specific group of consumers or organizations most likely to want a company's products or services.

Why do businesses need to identify a target market?

It helps businesses focus their time on the people most likely to buy their product, rather than wasting resources trying to appeal to everyone.

What are four benefits of using target marketing strategies?

1. Connect directly with a specific audience. 2. More cost-efficient advertising. 3. Establish customer loyalty. 4. Create new and improved products.

What is mass marketing?

A strategy that assumes a product will appeal to all customers in that market.

What is market segmentation?

Breaking down marketing into smaller segments and classifying customers by specific characteristics.

What are two advantages of mass marketing?

1. Higher profit. 2. Simplicity.

What are two disadvantages of mass marketing?

1. Doesn't account for customer differences. 2. Can be expensive due to 'wide net' strategies.

What are two advantages of market segmentation?

1. Identify the most effective target market. 2. Differentiate your brand from competitors.

What are two disadvantages of market segmentation?

1. Costly and time-consuming. 2. Mistakes in identifying segments can lead to wasted money.

What is market share?

The percentage of total sales in an industry generated by a certain company.

How can companies use market segmentation to increase market share?

By analyzing their status relative to their competition.

What are the four main types of market segmentation variables?

1. Demographics. 2. Psychographics. 3. Geographics. 4. Behavioral.

Give an example of demographics in market segmentation.

Porsche targeting high-income consumers.

Give an example of psychographics in market segmentation.

A bike company targeting a mountain bike to an outdoorsy person.

Give an example of geographics in market segmentation.

A Porsche convertible targeting people in warmer climates.

Give an example of behavioral segmentation.

Netflix suggesting movies based on what a person has watched.

How does behavioral segmentation help companies understand customer loyalty?

It shows how often customers buy and their loyalty patterns.

How might a coffee shop use behavioral segmentation?

By offering rewards for daily customers and sending coupons to occasional visitors.

Why segment a market based on generational differences?

To effectively reach and connect with specific generations.

How might marketing to Generation Z differ from marketing to Baby Boomers?

Gen Z might use TikTok collaborations, while Baby Boomers might use billboards or Facebook ads.

What is a customer profile?

The 'ideal customer' a business wants to reach, including basic info like age and interests.

Why do marketers invest time in creating customer profiles?

To understand customers better and create effective ads.

How do companies use segmentation to develop targeted customer profiles?

By segmenting the market to analyze each piece of their target customer.

What is positioning?

How a company wants its brand/product to be perceived by its target customers.

Why is positioning important for companies?

It helps customers see what makes their product unique.

What are the steps to create effective positioning strategies?

1. Identify the target market. 2. Research what matters most. 3. Highlight what makes the product unique.

What does SWOT analysis stand for?

Strengths, Weaknesses, Opportunities, Threats.

How does SWOT analysis connect to target marketing?

It helps companies understand how to better serve their target market.

What are internal factors in SWOT analysis?

Strengths and Weaknesses that come from inside the company.

What are external factors in SWOT analysis?

Opportunities and Threats that come from outside the company.