3.8 - Market Segmentation

Question 1

What is Market Segmentation?

Answer 1

Dividing the market into segments in which customers share common characteristics

Question 2

What are the Socio-Economic Groups?

Answer 2

A - Top management
B - Middle management
C1 - Junior management
C2 - Skilled manual
D - Semi skilled
E - Casual workers, unemployed and pensioners

Question 3

What are the main segmentation criteria types?

Answer 3

Demographic
Geographic
Income
Behavioural

Question 4

Describe the Demographic segmentation criteria

Answer 4

Identifies subgroups of the population based on social and economic profile characteristics of individuals and households

Examples - Age and Gender

Question 5

Describe the Geographic segmentation criteria

Answer 5

Identifies subgroups of the population based on where people live

Question 6

Describe the Income segmentation criteria

Answer 6

Identifies subgroups of population based on levels of income and profession/socio-economic group

Examples - Regions, cities, neighbourhoods

Question 7

Describe the Behavioural segmentation criteria

Answer 7

Identifies subgroups of population based on behavioural patterns of the consumer rather than their characteristics

Examples - Brand Loyalty and Reason/frequency and time of purchase

Question 8

What are the benefits of Market Segmentation?

Answer 8

Better matching of customer needs
Enhanced profits for business
Better opportunities for growth
Retain more customers
Target marketing communications
Gain share of market segment

Question 9

What are the drawbacks of Market Segmentation?

Answer 9

Lack of information and data
Difficult to measure and predict consumer behaviour
Hard to retain customer segments once identified

Question 10

What are segments measured in terms of?

Answer 10

Sales Value- Amount of money spent on products

Sales Volume - Quantity of items a business sells