Market Segmentation

Question 1

What 3 Demographics can a business segment their products to ?

Answer 1

• Age
• Gender
• Social Class

Question 2

What are the 6 ways a business can segment their Market ?

Answer 2

• Demographic
• Geographical
• Psychographic
• Lifestyle
• Ethnic Background
• Religion

Question 3

What does it mean, to split a market via Geographical location ?

Answer 3

Splitting by Regions of Country - when businesses target consumers based on where they live

Question 4

What does it mean, to slept a market via Psychographics ?

Answer 4

Splitting a market via Psychographics, means to target consumers with certain personality’s and emotional-behaviour

Question 5

What does it mean, to split a market via Lifestyle ?

Answer 5

Splitting a market via Lifestyle, means to target consumers according to the way they lead their lives, and the attitudes they share

Question 6

What does it mean, to split a market based on Culture and Ethnicity ?

Answer 6

Splitting a market via Culture and Ethnicity, means to target consumers based on ethnic origin, religion and/ or personal beliefs

Question 7

Explain two benefits of Market Segmentation to a Business.

Answer 7

• Increase customer loyalty - Customers will stay loyal to businesses that cater to their needs / wants
• Segmentation may allow businesses to charge higher prices - Because of reduced price sensitivity

Question 8

Explain two drawbacks of Market Segmentation to a Business.

Answer 8

• Increased costs - Due to potential research and/ or development costs
• A business may loose focus of their core ideas - Their products differentiate and loose a core identity