Market Segmentation, Targeting & Positioning

What is market segmentation?

The process of dividing potential customers into different groups based on characteristics like age, gender, income, and more.

Why do businesses use market segmentation?

To understand customers’ needs and wants and to tailor their marketing strategies accordingly.

What types of segmentation can help a business choose its market mix?

Product, geographic, promotional, and price segmentation.

Why is advertising in a newspaper not effective for teenage girls?

Because teenage girls are more likely to read magazines targeted specifically to them, like Bliss.

What is market mapping?

A process to identify a gap in the market by looking at what competitors offer.

How can gender be a factor in market segmentation?

Some products are aimed primarily at either males or females, such as Boohoo.com targeting primarily females.

Why are age demographics important in marketing?

Products can be aimed at specific age ranges, like mobility scooters not being advertised to people under 40.

How does location affect market segmentation?

Customers’ wants and needs often change based on where they live, leading businesses to focus on specific demographics.

• Like Indian food supermarkets in the UK.

Why is income a significant variable in market segmentation?

Certain products, especially luxury ones, must be aimed at people with a specific income level.

What is the difference between a mass market and a niche market?

A mass market targets a broad audience with general products, whereas a niche market targets a smaller, specialized audience.

What are some advantages of mass markets?

Having more customers, benefiting from economies of scale, and building a strong market presence.

What are some disadvantages of mass markets?

Higher levels of competition and lower profit margins.

What are the advantages of niche markets?

Less competition, specific market focus, development of expertise, higher profit margins, and customer loyalty.

What are the disadvantages of niche markets?

No economies of scale and vulnerability due to an undiverse product portfolio.

Can you name a fast-food company that appeals to the mass market?

Examples include McDonald's, Burger King, and Subway.

What is an example of a business addressing a niche market in the fast-food industry?

Leon, which focuses on healthy fast food.

Example of Niche Product?

Rolex watches