MARKET SEGMENTATION Flashcards
What is the market
The market is like a pizza, and each slice represents certain types of people in the market. For example:
5 slices of a pizza might represent the female OAPs in the market, and the rest of the market representing the rest of the market
What is the mass market
MASS MARKET: Everybody - People from different sides of life in the same market. Like milk, you can sell that to the rich and to the poor.
What is a niche market
NICHE MARKET: Small group of similar consumers. This is what we are doing in market segmentation
What is market segmentation
The process of dividing the mass market into subgroups of consumers with similar characteristics. Like:
Demographic
Geographic
Income
Behavioural
Here are some examples of market segmentation
Females aged 16 - 18, studying A level courses
Geographic - All residents in the SE7 postcode area
Incocome - All males in the C1 socio economic group - YOU NEED TO LEARN THIS
Behaviours - the characteristics like green consumers
Mix - Males aged 21 - 24, educated to university standard, living in the Manchester area, and interested in sports.
What is demographic segmentation
Demographic = the study of a population
Age
Gender
Level of education
Race
Religion
Family size
Stage in life - empty nesters (parents whose children have left home)
What is geographic segmentation
Defines market categories based on where people live: For example, climate, regions and urban vs rural.
People in different areas, often display different needs:
Urban vs rural vehicles (urban cars tend to be smaller, cheaper on congestion charge - Rural vehicles like trucks, jeeps and offroaders.
Clothing in areas with different markets - The clothing that is stocked in dubai, is a lot different to the clothing stocked in the UK in winter)
Taste, traditions and cultural norm
What is income segmentation
Divides the population by their economic characteristics. For example: working class, upper class, lower class.
What you need to avoid in the exam
Avoid using: Upper class, lower class and working class (those were just an easy to understand way) instead use these socioeconomic groupings:
(They are organised using letters)
A - Higher managerial such as chief executives and directors
B - Intermediate managerial such as solicitors, accountants and doctors
C1 - Supervisors, clerical or junior professionals, such as teachers and junior managers
C2 - Skilled manual labour such as plumbers, electricians and carpenters.
D - Semi and unskilled workers, bin men, car cleaners, window cleaners
E - Pensioners, casual workers, students and unemployed
What is behavioural segmentation
Behavioural segmentation:
Groups the customers by their interest, activities and hobbies.
Health conscious consumers
Elical/ environmental consumers (green consumers)
Hobbies and interests
Habitual consumers
Preferred patterns of buying (For example: online & late at night)
What are uses of market segmentation
Can be used to identify gaps in the market
Allows a business to target their marketing specifically at groups of consumers
allows specialised products to be designed to meet consumer needs
Allows specialised products to be designed to meet consumers needs
What are limitation of market segmentation
Difficulty accurately categorising consumers
Risk of not satisfying target market
Risk of not identifying potential consumers
Need to be identify changes in market segments
