Market Segmentation

Question 1

What are the 6 segments of the market?

Answer 1

Age
Income
Buying habits
Gender
Ethnic, cultural and religious background
Socio-economic groups

Question 2

Why market segmentation in businesses?

Answer 2

Businesses segment their markets based on a range of consumer characteristics. This allows them to target customers within those sectors.

Question 3

Explain market segmentation of age

Answer 3

Different age groups have different needs and spending patterns. Goods and services may be targeted at specific age groups.

Question 4

Explain market segmentation of income

Answer 4

This is a measure of how much a consumer has available to spend.
Those with higher incomes have different spending patterns from those on lower incomes.

Question 5

Explain market segmentation of buying habits

Answer 5

This is a measure of customer loyalty and the frequency of purchasing. Some consumers are very loyal to a brand and will buy it regardless of the price. Others will shop around for the lowest price, or make their decision based on quality or on convenience.

Question 6

Explain market segmentation of genders

Answer 6

Men and women have different tastes and needs, and have different spending patterns.

Question 7

Explain market segmentation of ethic, cultural or religious background

Answer 7

The ethic, cultural or religious background segment will influence the choice of food, fashion, preferences and other factors that affect spending behaviour.

Question 8

Explain the market segmentation of socio-economic groups

Answer 8

This method categorises consumers according to the occupation of the “head of the household’, usually the highest-earning person in the home.
Occupation on its own is no longer considered to be a good method of segmenting consumers.

Question 9

Teenage smartphone users look for value and style. They make choices based on what they read on social media. Samsung and Abercrombie & Fitch focus on social media marketing. What market segment are they targeting?

Answer 9

Age

Question 10

Some retail outlets stock products aimed specifically at women, particularly in fashion. Most clothing stores have larger sections for women’s wear than men’s. What market segment are they targeting?

Answer 10

Gender

Question 11

Some supermarket chains are aimed at lower-income consumers, e.g. Aldi, while others target higher-income customers, e.g. Waitrose. What market segment are they targeting?

Answer 11

Income

Question 12

Halal food producers cater for specific dietary requirements. What market segment are they targeting?

Answer 12

Ethnic, cultural & religious backgrounds

Question 13

Sandi wants to open a sandwich shop in the centre of a busy town. She will make the sandwiches to order with the top-quality ingredients and home-baked bread. Explain how Sandi will categorise her target segments of consumers.

Answer 13

Sandi can categorize her target segments by:

1. Demographics: Age, gender, income, and occupation (e.g., young professionals, students).
2. Geographics: Local customers in the busy town center (e.g., office workers, shoppers).
3. Psychographics: Lifestyles and values (e.g., health-conscious or foodies).
4. Behavior: Purchasing habits (e.g., preference for made-to-order and quick meals).

This helps her tailor her offerings to meet customer needs.