Segemntation

Question 1

Define Segmentation

Answer 1

The division of a market into distinct groups of buyers who have different wants, needs, characteristics and behaviours that require different Marketing Mixes.

Question 2

Define Market Segment

Answer 2

Group of consumers who respond in a similar way to marketing efforts. (therefore they share similar characteristics).

Question 3

What 2 things does Segmentation allow a firm to do

Answer 3

1. Design marketing Mixes to achieve desired responses from their target markets
2. Allows firms to develop growth strategies based upon segments who may desire a firms products.

Question 4

Name the 5 types of segmentation.

Answer 4

Geographic, Demographic, Psychographic, Behavioural, Multi-variate.

Question 5

Define Geographic Segmentation

Answer 5

Divides market into different geographical units, on both macro level(countries) and micro level (Neighbourhoods).

Question 6

Define Demographic Segmentation, and name the 4 key types of this.

Answer 6

Divides market based upon individual characteristics.

1. Age + Life Cycle
2. Income
3. Gender
4. Cultural

Question 7

Name and explain 2 examples of demographic segmentation.

Answer 7

FOREIGN CONSUMERS IN HOST MARKETS
Split based upon affiliation with host culture, and desire to maintain home culture characteristics. Creates 4 types of consumers:

Assimilators
Biculturals
Marginals
Ethnic Affirmers

SOCIOECONOMIC STATUS
-Creates 6 main socio-economic groups in society, who all have codes.

A-Upper Class
B- Middle class
C1-Lower Middle Class
C2-Skilled Working Class
D-Working Class
E-Low Income Earners

Question 8

Define Psychographic Segmentation, with 2 key examples.

Answer 8

• Division of a market based upon social and personality characteristics; more unstable and changeable than demographic.

1. Upper class segment
2. Personality through social media

Question 9

Define Behavioural Segmentation, and give the 4 key types.

Answer 9

-Divides the market based upon consumer behaviour factors.

1. Occasion
2. Benefit-sought Variable
3. Loyalty Status
4. Usage Rate

Question 10

Name the 3 types of microsegmentation done by businesses, and the 1 types of macrosegmentation.

Answer 10

MICRO

Operating Variables (tech)
Personal Characteristics (similarities)
Situational Factors (order size)

MACRO

Purchasing Approaches (existing relationship)

Question 11

Name the 4 types of International Market Segmentation, and what they all aim to do.

Answer 11

• All aim to create distinct groups of buyers across borders.

Geographic Location
Economic Factors
Political Legal Factors
Social-Cultural Factors

Question 12

Define and example Multi-Variate Segmentation

Answer 12

The use of numerous types of segmentation in conjunction, in order to create better defined market segments for targeting. (e.g geodemographic segmentation)

Question 13

Name and explain the 5 criteria for Effective Segmentation.

Answer 13

MASDA

Measurable- Profiles, growth etc. Can be measured easily
Accessible- Segment can be accessed to serve its consumers.
Substantial- Large enough to make a profit
Differentiable- Segments are distinguishable and react differently to marketing efforts.
Actionable- Firm posses the capabilities required to create a marketing mix to serve the segment.

Question 14

Define Segment Profiling, and the 2 reasons it is done.

Answer 14

• A detailed description of a specific market segment across a range of factors.

Done for:

• Asses attractiveness of segments (targeting)
• Design suitable marketing strategies (Marketing Mix)