2.1.5 The marketing plan: Market segmentation

Question 1

1. Define market segmentation.

Answer 1

1. Identifies similar customers customers
   - Attracted to similar advertising of the product
2. Enables you to utilise resources and efforts

• By selling to specific customers, who are interested in the product

Question 2

2. Describe the four market segmentation dimensions that can be used as part of market segmentation.

Answer 2

1. Geographic - Occurs when the market is divided into groups based on location. Ex. countries and states.
2. Demographic - Occurs when the market is divided into groups based on population characteristics. Ex. Male/female and under 30.
3. Psychographic - Occurs when the market is divided into groups based on thought processes and personality traits. Ex. Ambitious and aggressive.
4. Behavioral - Occurs when the market is divided into groups based on the behavior of a consumer towards a particular product or service. Ex. Quality and speed.

Question 3

3. Describe the market segmentation dimensions that was used to determine your target market for the
   business that you developed as part of the Online Social Enterprise Business (OSEB) project is
   considered a social enterprise.

Answer 3

Two market segmentation dimensions.

Demographic -
1. Knowing the age group interested in our service

• Enables us to advertise to teenagers/children
• Who need tutoring

Geographical

• We only provide our service to people within 1 hour distance
• Enables us to advertise to people living in the outskirts of the city and around Malvern

Question 4

4. Explain the importance of market segmentation to determine a target market.

Answer 4

1. To target specific customers, who are interested in their product
2. Businesses will obtain

• More profit
• Not waste time
• Meet the wants and needs of the targeted group
• Through utilisation of marketing resources