2.3a Market Segmentation

Question 1

Define the term ‘market segmentation’

Answer 1

It’s the process of diving a target market into small categories by grouping together consumers with a particular interest or need.

Question 2

Give two possible ways in which a market could be segmented

Answer 2

possible answers include :

• location
• demographics
• gender
• lifestyle
• income
• age

Question 3

What’s the purpose of market segmentation ?

Answer 3

A business needs to know who it’s intended customers are in order to aim its products or services at those target customers.

Question 4

How many types of market segmentations are there ?

Answer 4

4

Question 5

What are the benefits of market segmentation ?

Answer 5

• it can allow customers to feel that their needs are being better targeted and develop loyalty to the business
• it can help products being promoted to the wrong people otherwise there may be resources wasted and possible losses

Question 6

Explain one limitation of market segmentation

Answer 6

Focusing on one segment can cause a business to miss another opportunity elsewhere. This is because other market segments could be far more profitable. As a result , focusing on one segment could lead to an opportunity cost for a business.

Question 7

Define ‘ target market ‘

Answer 7

It’s the market segment at which a business aims it products

Question 8

What is demographic segmentation ?

Answer 8

It’s where a market is divided up based upon demographic differences such as age , gender , race and income

Question 9

What is psychographic segmentation ?

Answer 9

.

Question 10

What are the criteria for a successful segmentation ?

Answer 10

• a market segment must be substantial and have enough potential customers to be viable
• a market segment must be identifiable and measurable

Question 11

What are the benefits of segmentation?

Answer 11

any:

• meet specific customer needs
• differentiate its products
• focus on a specific group of customers
• target its marketing activity
• develop a unique brand image
• build close customer relationships

Question 12

What are the limitations of segmentation?

Answer 12

any:

• targeting a range of different customers with different products and services can be costly
• focusing on one group of customers can cause a business to miss another opportunity
• customer characteristics change over time, such as lifestyle, income and demographics.

Question 13

Explain one way in which effective marketing can help improve the products of a business?

Answer 13

If a business understands its customers’ needs, its products and services can be developed to meet those needs. this means that the products will be more attractive and desirable, leading to a greater number of sales.

Question 14

What is the word for this definition:It’s the process of diving a target market into small categories by grouping together consumers with a particular interest or need.

Answer 14

Market segmentation

Question 15

What is the wor for this definition : It’s the market segment at which a business aims it products

Answer 15

Target market

Question 16

What is the word for this definition :It’s where a market is divided up based upon demographic differences such as age , gender , race and income

Answer 16

Demographic segmentation

Question 17

Targeting affluent customers with luxurious goods is an example of

Answer 17

Economic factors

Question 18

Segmentation of international markets on basis of common languages, religions and customs is example of

Answer 18

Cultural factors

Question 19

Which is an example of Demographic segmenation (Gender)?
A. 
Tesco Value Brand
B. 
Perfume
C. 
Toothpaste

Answer 19

B perfume

Question 20

What does attitude means in business terms

Answer 20

A positive or negative tendency in our perception of objects or people in our environment