marketing - segmentation

Question 1

Why do businesses segment the market?

Answer 1

To enable them to specifically target customers with the most appropriate products/identify their target market.

Question 2

What are the 4 ways in which a market can be segmented?

Answer 2

• Gender
• Age
• Income
• Location

Question 3

What do customers in each segmentation group have?

Answer 3

Similar characteristics.

Question 4

How do businesses target gender?

Answer 4

Target either males or females by changing the market mix to affect a specific gender.

Question 5

Give an example of a way in which a business would go about targeting age.

Answer 5

Targeting a specific stage in the life cycle e.g. teenagers or “grey power” (over 55s).

Question 6

Why do businesses target location?

Answer 6

People in different geographical areas show different characteristics.

Question 7

Why do businesses target income?

Answer 7

Income can have a direct influence on what customers are willing and able to buy.

Question 8

What does income segmentation sometimes make use of?

Answer 8

Socio-economic groups.

Question 9

How do businesses target income?

Answer 9

Increase price point of products to attract a more affluent market segment.

Question 10

Give 2 benefits of market segmentation.

Answer 10

• Targeting advertising so spend is more effective
• Most and least profitable customer demographics can be identified
• Least profitable markets can be avoided
• Becomes easier to identify new products
• Helps the business improve existing products
• Helps the business improve customer service
• Dominate within segments (increase market share)