5.2 Segmentation Flashcards
What is market growth?
How much the sales in the market have increased (%).
For example if the sales of the market is 100 units and grows to 110 units, then the market has grown by 10%
What is market size?
How big the market is in terms of sales volume, and how big it is in terms of sales value.
What is sales volume?
The number of items sold in the market.
What is sales value?
The amount of revenue generated.
What is the calculation for market growth?
Change in market size/original market size X 100
What is segmentation?
It is the dividing of market into different groups based off of needs and wants.
What are the benefits of segmentation
- Develop its products to fit customer needs more closely.
- Target its cusomers more precisely.
- Set the price appropriately.
What are the way sof segmenting a market?
- By gender
- By age
- By location
- By income
- By their stage in life*
*For example if theyre a family or a new couple out of uni
What is targeting?
Deciding which segment in its chosen market to focus on.
Why will a business target?
- If it thinks it can make a high enough income*
- If the company can compete effectively
- If it covers opportunity cost
*A business wont target a segment if its too small
