market segmentation

Question 1

What is market segmentaiotn

Answer 1

This is a tactic used by businesses whereby the market is segmented (split) into different groups

Question 2

market segmentation defintion

Answer 2

Definition: identifying different segments within a market and targeting different products or services to them.

Question 3

What is market segmentation sometimes called

Answer 3

Market segmentation is sometimes called differentiated marketing

Question 4

what is a market segment

Answer 4

This is a sub group of a whole market in which consumers have similar characteristics

Question 5

Why are some segments divided

Answer 5

Geographic differences
Demographic differences – age, gender, family size, ethnicity, income, socio economic group
Psychographic factors – lifestyle, hobbies, personality, values & attitudes

Question 6

Why do businesses practice market segmentation?

Answer 6

it is better to get a product or service right for one small group, than get it wrong for all of them

Question 7

Market segmentation requirements

Answer 7

If a firm wants to segment its market, it must have a very clear picture of the consumers in the target market it is aiming to sell in.
Market research will help to build up a profile of the typical consumer

Question 8

3 common types of Market Segmentation

Answer 8

1) Geographic differences
2) Demographic differences
3) Psychographic factors

Question 9

Geographic differences –

Answer 9

consumer tastes differ from area to area. It might make sense for a business to market its product differently depending on where it is sold.

Question 10

Demographic differences

Answer 10

Demography is the study of population data and trends and info such as age, gender, family size, ethnicity
This data can be used to separate markets.
Income levels and social class are 2 important demographic factors that lead to market segmentation

Question 11

Psychographic factors

Answer 11

This involves separating the market according to differences in peoples lifestyles, hobbies, values and attitudes
Ethical businesses often target those customers that are ethically minded themselves

Question 12

Benefits of market segmentation

Answer 12

Businesses define their market more precisely and produce goods & services specifically aimed at them – should increase sales
Different marketing strategies can be used for each segment – may be more effective
Avoids marketing goods at consumers who are not interested in them.

Question 13

limitations of market segmentation

Answer 13

Extensive market research is needed to effectively segment the market
Focusing on one or two segments of the market may leave the business vulnerable to changes impacting those segments
May lead to higher promotional costs as different promotional campaigns may be needed for each segment.