Principles of Marketing - Market Segmentation

Flashcards on the topic of Market Segmentation. These cards cover key vocabulary terms and concepts related to market segmentation.

Market Segmentation

The process of segregating the customers of a particular market into smaller segments, within which customers have similar wants, needs, or demands.

Measurability (in Market Segmentation)

The ability to quantify and analyse a segment’s characteristics (e.g., demographics) through data collection and analysis to determine its size and purchasing power.

Relevance (in Market Segmentation)

The segment should be substantial and valuable enough to justify dedicated marketing efforts, holding sufficient potential for profitability.

Accessibility (in Market Segmentation)

The chosen segment must be reachable through available marketing channels to effectively communicate and distribute offerings.

Feasibility (in Market Segmentation)

The segment should allow for practical, tailored marketing programmes that are realistically implementable, considering the organisation’s resources and capabilities.

Distinction (in Market Segmentation)

Each segment should have unique characteristics, leading it to respond differently to various marketing offers, ensuring targeted approaches yield unique results.

Responsiveness (in Market Segmentation)

The market segment should respond to the marketing programs, gauged by understanding the motives for buying amongst a particular segment of customers.

Effective Demand (in Market Segmentation)

The segment has adequate buying power, i.e., willingness to buy coupled with the ability to pay for the product.

Size (in Market Segmentation)

The segment should be sufficiently large to generate profits but manageable enough to be effectively served.

Growth Orientation (in Market Segmentation)

A segment should offer potential for future expansion, ensuring sustained relevance and profitability.

Profitability (in Market Segmentation)

Assessing long-term profitability is crucial. High-end brands may achieve profitability through lower volumes and higher margins, while mass-market brands rely on volume sales for profitability.

Compatibility (in Market Segmentation)

The organisation’s resources, expertise, and brand identity must align with the segment’s demands, ensuring effective positioning and competitiveness within the segment.

Geographic Segmentation

Dividing a market based on location-related factors such as country, region, city, climate, or population density.

Demographic Segmentation

The process of dividing the market based on demographic factors such as age, gender, income, education, occupation, family size, and life stage.

Psychographic Segmentation

Categorises consumers based on psychological traits, lifestyle choices, values, interests, and social status.

Lifestyle Segmentation

Considers consumers’ daily activities, interests, and hobbies, reflecting how they spend time and prioritise their lives.

Personality Traits Segmentation

Categorises consumers according to individual characteristics, such as being adventurous, extroverted, or conservative.

Values and Beliefs Segmentation

Targets consumers who prioritise specific causes, such as environmental sustainability, social responsibility, or ethical sourcing.

Social Status Segmentation

Divides the market based on economic standing, class, or social aspirations, catering to consumers’ desire for luxury, premium, or value products.

Attitudes and Interests Segmentation

Focuses on aligning products with consumers’ attitudes towards activities, hobbies, and societal issues.

Behavioural Segmentation

Divides the market based on consumer behaviours, attitudes, and responses to products or services. This segmentation approach examines specific ways that customers interact with a brand.

Purchase Occasion Segmentation

Considers when consumers are most likely to buy a product, such as during specific seasons, events, or holidays.

Benefits Sought Segmentation

Customers may purchase the same product for various reasons, seeking distinct benefits. Understanding the desired benefit helps brands develop offerings that directly address customer needs.

User Status Segmentation

Segments consumers into categories such as non-users, first-time users, regular users, and ex-users. This differentiation helps brands address each group with tailored messaging.

Usage Rate Segmentation

Consumers can also be segmented by how frequently they use a product. High-frequency users, moderate users, and occasional users have varying levels of brand interaction.

Loyalty Status Segmentation

Brands often segment based on loyalty, differentiating between brand loyalists, switchers, and those indifferent to the brand.

Benefit Segmentation

Divides consumers based on the specific benefits they seek from a product or service. This approach recognises that customers may purchase the same product for varied reasons.

Targeting

Selecting specific market segments based on an organisation’s ability to satisfy its needs better than competitors.

Undifferentiated Marketing

Targets the entire market with one broad strategy, treating all consumers as having similar needs and preferences.

Differentiated Marketing

Involves targeting multiple distinct market segments with tailored products or services for each.

Concentrated Marketing

Focuses all resources on a single market segment, tailoring products and marketing strategies exclusively for that group.

Micromarketing

Customises products and marketing efforts to suit the needs of narrowly defined groups or individuals including local and individual marketing.

Mass Customisation

Combines mass production's cost advantages with individual marketing's personalisation.

Differentiation

Involves creating a product or service that offers unique attributes valued by customers. The goal is to make the offering distinct and desirable compared to competitors.

Positioning

Refers to how a product or brand is perceived in the minds of the target audience relative to competitors.

Product Attributes Positioning

Highlights specific features or characteristics of a product that differentiate it from competitors.

Benefit Positioning

Focusing on the product's benefits or outcomes, this strategy addresses the emotional or practical advantages that resonate with the target audience.

Use or Application Positioning

This approach considers the product ideal for a particular use or situation. It aligns the product with specific activities or occasions, making it more relevant to certain customer groups.

User-Based Positioning

User-based positioning tailors the brand or product to a specific demographic or user group. This strategy establishes a connection by directly addressing the preferences or identity of the target audience.

Competitor-Based Positioning

This strategy compares a product directly to its competitors, highlighting superiority or unique aspects that set it apart.

Quality or Price Positioning

Brands using this strategy position themselves as offering premium quality or competitive pricing, depending on their target market.

Symbolic or Cultural Positioning

Symbolic or cultural positioning connects a brand to deeply rooted cultural values, lifestyles, or social ideals, creating an emotional bond with its target audience.

Problem-Solution Positioning

Problem-solution positioning identifies a specific issue faced by the target audience and presents the product as the ideal solution.