Customer Driven Marketing Strategy

Market segmentation divides the market into subgroups. A market segment consists of customers with similar needs and wants.

• Demographic

• Geographic

• Psychographic

• Behavioural

A target market is a group of people or an organisation the firm tries to target with its product or service. The firm identifies the target market's needs and wants, based on which it implements the appropriate marketing mix.

Once the segmentation is complete, you need to decide which customer segment you want to target with your product or service. Selecting this customer segment is known as targeting. This strategy aims to identify small, well-defined target groups.

Positioning involves determining where your brand or product stands concerning others on the market. Positioning is a vital part of marketing strategy, as it influences how customers perceive your product offering.

The STP marketing model is a market segmentation, targeting, and positioning process.

The value proposition is a product or service feature that brings additional value to the customer. The value proposition makes a product or service stand out from competitors' similar products or services. It is the value you promise to bring your customers if they buy your product.

It is important to segment your customers because you get to understand your customers on a deeper level through segmentation. During segmentation, customers are divided into subsets based on shared characteristics, which provides insight into the different types of customers purchasing the firm's products or services.

Targeting is also essential, as selecting the most attractive customer segment from a marketing perspective is necessary, i.e., which segment will be most interested in buying your products? This customer segment, or segments, will be the ones you focus your marketing on.

Positioning your product is crucial because it determines how your customers will view your product or service compared to those of competitors. This step is vital as it helps you define your product offering and the value you bring to your customers (value proposition).

All the answers are correct.

The first step is segmentation.

Positioning.

Segmentation, targeting, and positioning interrelate as they are all prerequisites to the marketing mix. Segmentation is followed by targeting, which is followed by positioning, making up the STP marketing model. These steps are essential for understanding your customers and your product offering better. They also allow you to understand which customers to focus your marketing strategy on and how to make your product the most successful from a marketing point of view.

Market segmentation divides the market into different subgroups. A market segment consists of a group of customers who have similar needs and wants. It is the marketer's goal to identify the appropriate subgroups of consumers.

It is possible to segment markets based on descriptive characteristics like demographics or geographic location. Another type of segmentation involves looking at the different types of behavior demonstrated by a consumer group.

• Age

• Income 

• Gender

• Family size 

• Occupation 

• Rural vs. city 

• Country

• Climate 

• Time zone 

• Lifestyle 

• Personality 

• Values ​​and beliefs 

• Hobbies 

• Interests 

• Hard-core loyals: stick to one brand only 

• Split loyals: are loyal to a few brands at a time 

• Shifting loyals: those that change their loyalty from one brand to another

• Switchers: are not loyal to any specific brand

Income

Lifestyle

Psychographic segmentation is a segmentation technique in which consumers are divided based on psychological traits that influence their purchase patterns.

• Insight into consumer behaviour, buying habits, and purchase patterns. 
• Allows organisations to understand consumer needs. 
• Helps organisations come up with effective marketing campaigns to target specific groups of consumers.

Only statement I. is correct.

Market segmentation increases profits and cuts costs

Mass marketing is a strategy in which businesses decide to target an entire market with their product or service. Mass marketing is where a business sells to the largest part of the market. A mass market involves a lot of different product options for consumers. Customer needs in this type of market tend to be less specific.

Niche marketing involves outlining and understanding the needs and wants of customers in the small (niche) market segment. Niche segments are usually created by identifying needs and wants that are not addressed by the mass market or by other businesses.

Generic brands appear as a result of mass marketing. A generic brand is a product without a universally recognised brand name or logo. These types of products are usually not advertised. Sometimes generic brands are synonymous with a product, meaning consumers treat the brand name as if it were the product.

• Kleenex 

• Chapstick 

• Bubble wrap 

• Jacuzzi 

Both statements are correct.

The price of niche market products tends to be relatively low.

• Benefits of large-scale production (economies of scale). 

• The potential to minimise unit costs. 

• The market is more competitive.
• It can be hard to persuade consumers of the superiority of the product due to the lack of differentiation.

• Customers could be easier to find and reach.
• The company gains market expertise due to the specialised skill set required to manufacture the product or operate the service. 
• More loyal customers as limited options exist.

• Higher unit costs.

• Could attract competition if the product or service is successful.

A.

B.

D.

D.

Niche brand

Niche

True

Small and Large

Mass marketing 

Generic brand