1.2.3 - Market Segmentation

Question 1

What are the market segments?

Answer 1

• Location - geographical units
• Behaviour - relating to purchasing behaviour, such as impulse buying
• Income
• Age
• Lifestyle - such as hobbies like travelling
• Other factors - relating to the structure of the population such as religion and ethnicity

Question 2

Advantages & disadvantages of market segmentation

Answer 2

• Allows for matching of product to specific customer needs
• Helps with new product development
• Better targets promotional strategies
• Decreases amount of potential customers by alienating non-target market segments
• Adaptation of promotional strategies to different market segments can be costly

Question 3

What is market mapping?

Answer 3

Illustrates the range of positions that a product can take in a market based on two features, by placing products on a graph with two axis.

Question 4

Advantages & disadvantages of market mapping

Answer 4

• Quick and easy
• Easy to analyse
• Doesn’t take demand into account, only gaps in the market