MARKETS /. Segmentation, targeting and positioning

market share

the portion of a market that a particular business controls (often measured in percentage)

market leadership

The position at which a business has the largest market share in a market

Market growth

The rate at which the size of the market is increasing

Market concentration

The degree of competitiveness within a given market. High concentration means a few companies control most of the market share, indicating less competition, while low concentration means many companies share the market, suggesting a more competitive landscape.

Benefits of being a market leader

• economies of scales

• premium pricing

• Greater publicity and brand exposure 

• Easier to attract and recruit qualified stakeholders

disadvantages of being a market leader

• diseconomies of scales

• higher standards —> be stricter

• increased competition

Marketing Plan

A marketing plan outlines a firm's marketing objectives and the marketing strategies used to achieve these objectives: 

• Marketing budget

• anticipated difficulties and potential solutions 

• Marketing mix 

• Strengths and weaknesses of competitors 

• SMART marketing objectives 

• Methods of market research

Marketing process

• Marketing audit

• Set marketing objectives 

• Plan marketing strategies

• Monitor and review performance 

• Evaluation

Marketing audit

An examination of the current climate in which the business operates

Marketing objectives

Marketing audit allows companies to set informed marketing goals, whether that be long-term or short-term

Monitor and review performance

Checking and monitoring progress

Evaluation

Evaluation and determine if the business has met their goals

Target market

A market for a particular good or service consists of different types of customers, subdivided into market segments. 

Market segment

A distinct group of customers with similar characteristics (such as age and gender), similar needs and wants. 

Consumer profile

records held about individual customers, used as a guide for determining whom to target with certain products

Consumer profile characteristics

• demographic

• geographic

• psychographic

Demographic factors

 Demography is the study of the characteristics of the human population within a certain area, country or region. The range of demographic variables include: 

• Age

• Gender

• race and ethnicity

• Religion

• income and soci-economic class

Geographic factors

Geographic location impacts the needs and wants of customers. This falls into two broad categories: location and climate

psychographic factors

Those that consider the emotions and lifestyles (hobbies) of customers. These factors include: 

• hobbies and interests 

  values 

• religion 

• Status

• culture 

Product position map

a visual tool. that reveals customer perceptions of a product compared to others in the market

Prenium products

goods and services of high quality and high prices

Bargain products

goods and services of high quality but with low prices

Economy products

low prices and low quality

Cowboy products

poor quality, but highly priced used to deceive customers and used short-term tactic to gain sales

niche marketing

targeting a specific and well-defined market segment

advantages of niche marketing

• there is a better focus whilst mass marketing has no real focus,

• less competition —> businesses can charge higher prices for their unique and exclusive products --> higher profit margins on its products

• Businesses become highly specialized in meeting the need and wants of their niche target market

disadvantages of niche marketing

• Limits number of potential customers due to small market size

• Fewer opportunities to exploit economies of scale --> average costs tend to be higher

• The threat of larger firms entering the market might endanger the survival of businesses operating in niche markets

Mass marketing

undifferentiated marketing --> ignores targeting individual market segments

adv of mass marketing

• gain from huge potential economies of scale by suppling products in mass markets, thereby helping them to cut unit costs and raise profit margins

• No need to modify marketing strategies for different market segments --> saves both time and resources

• Catering for larger markets --> establish larger customer base

disadv. of mass marketing

• not suitable for all businesses due to the high barriers to entry required for mass production

• lots of competition

• lack of focus --> can be wasteful

Unique selling point / proposition

any aspect of a business, product or brand that makes it stand out from those offered by competitors

Common ways for differentiation (marketing mix)

• product

• place

• price

• promotion

• people

• processes

• physical environment (the physical location can make it easier for customers)

• packaging

First mover

an advantage gained by a company that first introduces a product or service to the market

Targeting

each distinctive market segment having its own specific marketing mix, depending on whether the business operates in niche or mass markets

mass market

undifferentiated market, large group of different market segments. These segments consist of people in different demographics and geographics. Also, their wants and needs may be different