Market Segmentation
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Market Segmentation

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    Market Segmentation Market Segmentation Presentation Transcript

    • TARGET MARKETS
      • Marketing is costly so organisations need to be sure that they are communicating with the people most likely to buy their product.
      • Eg Expensive adverts shown at the wrong time on TV are a waste of money
    • UNDIFFERENTIATED MARKETING or MASS MARKETING
      • Some products appeal to the majority of us – so all marketing is aimed at the general population.
      • Aimed at most or all of the market. This type of marketing is likely to be expensive.
      • This strategy is likely to be used where the product cannot be easily differentiated to suit the needs of particular groups of people
    • 2
      • this can involve marketing different products or services to different groups of people (segments) or promoting the same product in different ways.
      • Eg banks having different types of accounts for different groups of users.
      • Eg Ford produce different cars for different customers
      • Eg BT has different packages for different customers
      DIFFERENTIATED MARKETING
    • Question
      • Distinguish between undifferentiated and differentiated marketing. (1)
    • MARKET SEGMENTATION
      • Market research will show that a particular product appeals to a specific group of people. Producers need this information to identify groups with similar needs.
      • Breaking down a market into sub-groups is called market segmentation.
    • Market Segmentation
      • Gender
      • Age
      • Income
      • Occupation
      • Lifestyle
      • Hobbies
      • Religion and Race
      • Geographic location
      • Level of Education
      • Social class
    • WHY USE MARKET SEGMENTATION?
      • The main reason is that the information would allow more sales to be made
      • to gain greater knowledge about customers so that it can vary the product
      • prevent promoting products to the wrong people
      • to target particular groups
      • to market a wider range of differentiated products
    • Benefits of Segmentation
      • Sales should increase
      • Satisfy customer needs more successfully
      • Customer feedback more easily obtained
      • Reduced costs as money is not wasted on ineffective advertising and promotion
      Add to notes
    • Questions
      • Outline the benefits of market segmentation. (3)
      • For each of the products listed below suggest the most likely target market:
        • Chanel No.5
        • The Herald Newspaper
        • Glasgow university law degree
        • Fresh and Lo semi-skilled Milk
        • Ford Focus
        • BMW Mini
    • NICHE MARKETING
      • Companies identify a “gap” in the market.
      • This involves a business aiming a product at a particular, often tiny,
      • segment of the market.
      • WHY?
      • Small firms can sell in markets which have maybe been overlooked by or or ignored by other firms.
      • They can avoid competition in the early stages
      • Can focus on the needs of the consumers in these segments.
      • Many small firms have just one product
      • Examples of Niche Markets:
        • The Whisky Shop
        • Tie Rack
    • Niche Market
      • PROBLEMS –
      • Does not spread risk
      • In time, market may attract large business which can benefit from economies of scale
      • can be more and frequent swings in consumer spending than in a large market.
    • Question
      • Describe a niche market. (1)
      • Explain the advantages and disadvantages of operating in a niche market (4)
    • Solutions
    • MARKET SHARE
      • This is the proportion of a particular market held by a product/business.
      • Indicates which business is the market leader.
      • It might influences the strategy or objectives of a business, eg to increase their share by 5%.
      • It may also be an indication of of the success or failure of a business or its strategy.
    • MARKET SHARE
    • PROBLEMS WITH MARKET SHARE
      • Share may be measured in different ways. (Sales revenue, profit, sales volume), BTs share might be different if sales rev from calls was used.
      • type of product on which the market share
      • is based,
      • eg may have been different if
      • mobile phone companies had been included
    • Market Growth
      • Market growth takes place when the total number of people buying a product or service increases in the whole market.
      • Eg:
      • 2000 – there were 21,000,000 users of mobile phones in the UK
      • 2007 – there were 37,000,000 users of mobile phones
      • Therefore the market has grown by 16,000,000 in 7 years
      • Just as products go through a lifecycle, so do entire markets.
    • Question
      • Distinguish between market share and market growth. (1)
      • Solution: