Types of segmentation
- geographic segmentation
- social class
- groups customers according to their attitudes, opinions and life styles
- concentrate on producing one product for one market
- Range of products fpr different segments
- some businesses aim their products to everyone
- it is about meeting the customer needs
- to segment markets according to how consumers relate to a product
- usage rate
- where people live
- different needs
Product orientation = Business develops products based on what it is good at doing.
Market orientation = Business responds to customer needs and wants and designs the product accordingly.
Advantages of market orientation:
- respond more quickly to changes in the market
- be in a stronger position to meet the challenges of new competition
- more confident that the launch of a new productwill be a success
- consult the customer continuously
- set the price of the product at a level that the customer is prepared to pay
Market research = the collection, presentation and analysis of information relating to the market and consumption of goods and services. Iinsights provided by Market research
- dimentions of the market
- competitpor strategies
- customer needs, wants and expectations
- market segments
Market size = the total amount spent by customers biuyign products.
Market share = proportion of total sales in a particular market.
Dynamic market = these types of markets do not stay the same over time, they tend to change. they may grow, shrink, fragment, emerge or completely disappear.
Branding is used to:
- create customer loyalty
- help with product recognition
- develop an image
- charge a premium price when a brand is strong
Risk = the possibility that things will go wrong.
Uncertainty = the unpredictable and uncontrollable events that affect business
- Risk can be assessed and managed.
Mass market = a very large market in which products with mass appeal are targeted. key features of a mass market:
Aims of a Mass market:
- customers form the majority of the market
- customer needs and wants are more general and less specific
- associated with a higher production output and capacity and potential for economies of scale.
- Success usually associated with low cost operations market leading brands.
- create products with universal appeal
- secure leadership of the largest market segment
-build strong brands
- exploit economies of scale to earn high
Marketing = the management process responsible for identifying, anticipating and satisfying customer requirements profitably.
Niche market = smaller market, usually within a large market or industry. Advantages:
- less competition
-builds specialist skills and knowledge
-often charge a premium price
-profit margins often higher
- customers tend to be more loyal
- lack economies of scale
- risk of over dependence on a single product of market
- likely to atract competition
- vulnerable to market changes
Primary research = data that is collected first hand for a specific research purpose
Secondary data = data that already exists and which has been collected for a diufferent purpose
Qualitative data = data which aims to understand why customers behave in a certain way. Based on opinions, attitudes, beliefs and intentions.
Quantitative data = data that is based on larger samples and is more statistically valid. Numerical.
Adding value = the difference between the price of the finished product and the cost of the imputs involved in making it.Ways to add value:
Benefits of adding value:
- build up the brand
- good customer service
- add product features and benefits that customers want
- operate efficiantley
- charge a premium/higher price
- create a point of difference with competitors
- protection against competitors offering lower prices
- focuses business on its target market
Market positioning this is based on consumers perception of products
Market mapping is a diagram that shows the range of possible positions for two features of a product
Product differentiation= how you make your product different from competitorsPurpose of product differentiation
- to stand alone
- no competition
- able to increase prices if costs increase
- protects profit margins