Market Segmentation Flashcards
1
Q
What is market segmentation?
A
Splitting the market into different groups based off similar characteristics
2
Q
What are the 4 types of ways to segment the market
A
Psychographic
Demographic
Behavioural
Geographic
3
Q
Benefit of Market Segmentation? (6)
A
- Can target a specific group
- Rather than create a product for all groups
- Can understand and adapt to wants and needs effectively
- Product will be differentiated
- Increase price without fall in demand
- Increase revenue etc
4
Q
Drawback of Market Segmentation? (7)
A
- Need to create multiple products
- To meet the needs of different segments
- Therefore unable to benefit from the marketing economies of scale
- As they target at a smaller group of customers
- This means R&D used to produce the product
- Will be spread over less units leading to an increase in fixed costs
- Lower Operating profit
