Chapter 35: Market Segmentation (Version) Flashcards
What is a market segment?
Part of a whole market where a particular customer group has similar needs & characteristics.
Why do businesses target specific market segments?
Businesses target specific segments to meet customer needs more effectively.
Which businesses aim their products at nearly all consumers?
Large food manufacturers target nearly all consumers.
How does location affect market segmentation?
Different locations have varying needs, e.g., hot climates vs. cooler climates.
Provide an example of geographical segmentation.
Different regions have varying tastes in cuisine.
How might rural and urban customer needs differ?
Rural customers might need waterproof boots, while urban customers might prefer compact furniture.
What factors are included in demographic segmentation?
Age, gender, income, social class, ethnic origin, and religion.
How does age influence product targeting?
Products like clothes and holidays are tailored to different age groups.
Give an example of income-based market segmentation.
Chanel targets high-income groups, while Lidl targets lower-income groups.
How do businesses use social class for segmentation?
Businesses use socio-economic groups based on occupations to target products.
Why is ethnic origin important in market segmentation?
Different ethnic groups have varying needs due to cultural differences.
Provide an example of segmentation by religion.
Muslims do not eat pork or drink alcohol, influencing product offerings.
Why might lifestyle segmentation be useful?
It captures spending patterns and preferences beyond geographic or demographic factors.
Provide an example of lifestyle-based segmentation.
Adventure holidays target ‘outdoor types’ who enjoy trying new things.
How can segmentation increase revenue?
Businesses can charge higher prices to specific groups, e.g., airlines with first-class tickets.
Why might segmentation lead to customer loyalty?
A tailored product or service encourages customer loyalty since it is unique and designed specifically for them.
How can segmentation reduce wasted promotional resources?
Targeting ads only at those interested in the product.
Benefit to a business producing & marketing a wide range of goods?
Their brands & products can be targeted at multiple different customer groups (segments), boosting revenue.
Socio- economic groups
Division of people according to social class based on employment status
Methods of market segmentation
Demographic, Lifestyle, Location (Geographical)
