2.2: Market segmentation

Question 1

Define the term target market

Answer 1

A target market is a group of consumers or organizations most likely to buy a company’s products or services.
Ex: san silvestre students kipling pencil case

Question 2

Market segmentation
- Geographics
- Demographics
- Psychographics

Answer 2

Market segmentation is when a company divides its target market into different groups.

Geographics: Where the customers live
Demographics: Segmented by age, sex, family members
Psychographics: Lifestyle, attributes, personalities

Question 3

Explain the advantages and disadvantages of market segmentation

Answer 3

Advantages:
- helps create products that are want by customers
- ensures appropriate prices
- appropriate promotion offer

Disadvantages:
- High prices due product variation
- High promotional costs
-

Question 4

Define the term niche market
Advantage and disadvantage

Answer 4

Exploiting a specific part of a large market.

Advantages:
- High prices can be charged due speciality of the product
- can avoid competition
- can focus on the needs of the consumer on this segments

Disadvantages:
- Large companies may enter to the market and take sales from the original producer
- cannot take advantage of economy scale making products price higher

Question 5

Prepare a product positioning map