Market segmentation

Question 1

define market segmentation

Answer 1

splitting the market into sub groups of consumers with similar characteristics, this helps to identify different types of consumers and different needs and wants.

Question 2

name the 4 segmentation methods and an example of what you could segment in each

Answer 2

demographic - gender, age, ethnicity, lifestyle
geographic - by region
income - high income/low income, socio-economic grouping
behavioural - reasons for purchasing, frequency of purchase

Question 3

what can advertising be targeted at? what can be identified?

Answer 3

• specific market segments so that advertising spend is more effective
• most and least profitable customers can be identified

Question 4

define targeting + examples

Answer 4

the process of deciding which segment of the market to focus on - e.g. milky bar buttons are targeted children, flakes are targeted at men

Question 5

nam the two types of markets that can be targeted?

Answer 5

mass and niche

Question 6

define niche market

Answer 6

when a firm targets a small subsection or previously unexploited gap in a larger market - can charge a premium price