Market segmentation- Niche and Mass markets

• What is market segmentation?

  Technique to target products at customers
• Why is market segmentation important for businesses?

  It identifies specific customer needs and wants
• How are market segments usually measured?

  In terms of sales value or volume
• What are the reasons businesses need to segment their markets?

  • Different benefits desired by customers
  • Varying willingness to pay
  • Diverse media consumption
  • Different purchasing quantities
  • Timing and location of purchases
• What are the potential benefits of market segmentation for a business?

  • Better matching of customer needs
  • Enhanced profits
  • Growth opportunities
  • Higher customer retention
  • Targeted marketing communications
• How does market segmentation help in pricing strategies?

  It allows businesses to raise average prices
• How can market segmentation influence customer loyalty?

  By marketing products for different life stages
• What is the impact of careful segmentation on marketing costs?

  It can lower costs and improve reach
• What are the characteristics of niche markets?

  • Targets smaller segments with specific needs
  • Builds specialist skills and knowledge
  • Higher prices and profit margins
• What is niche marketing?

  Targeting a smaller segment of a larger market
• What are the advantages of niche marketing for small businesses?

  • Less competition
  • Clear focus on target customers
  • Development of market expertise
  • Ability to charge higher prices
  • Higher profit margins
  • Increased customer loyalty
• What are the disadvantages of niche marketing?

  • Lack of economies of scale
  • Risk of over-dependence on one product
  • Attracts competition if successful
  • Vulnerable to market changes
• What is mass marketing?

  Selling into the largest part of the market
• What are the key features of a mass market?

  • Majority of customers in the market
  • General customer needs and wants
  • Higher production output and capacity
  • Associated with low-cost operations
  • Heavy promotion and widespread distribution
• What is a disadvantage of market segmentation related to research costs?

  It requires time and money for research.
• Why is it a disadvantage that markets change?

  Customer needs also change over time.
• What is a disadvantage of market segmentation regarding consumer preferences?

  It takes time to research what people like.
• What is a potential risk of focusing on one market segment?

  You may miss potential growth in other segments.
• What is a cost associated with market segmentation?

  Costs of research.
• What is a risk associated with market segmentation?

  Risk of stereotyping.
• How might market segmentation affect economies of scale?

  It may not benefit from economies of scale.
• What are the ways to differentiate products?

  • Superior product quality
  • Branding
  • Wide distribution across all major channels
  • Sustained promotion
• Why is superior product quality important for differentiation?

  It helps to stand out in the market.
• How does branding contribute to product differentiation?

  It creates a unique identity for products.
• What is the benefit of wide distribution across major channels?

  It increases product accessibility to consumers.
• Why is sustained promotion important for product differentiation?

  It maintains consumer awareness and interest.