Market Segmentation 3.1.4

Question 1

What are market segments?

Answer 1

Sub groups of consumers that share similar characteristics (Gender, age, income, etc.)

Question 2

Why do we do market segmentation?

Answer 2

A market contains many different sub groups that have different needs and preferences. Through market segmentation, a company can make different brands of a product or service and then aim each brand at a market segment where the product fits their needs and preferences E.g:

• High income consumers may prefer expensive cars over mid-priced cars compared to middle income consumers preferring mid-priced cars