Segmentation Flashcards
What is segmentation?
Occurs when a market is divided into different groups of needs and wants.
What ways can a market be segmented?
1) By gender: Is common for people of different genders To have. Different needs and require different products.
2) By age: Different age groups may have different needs.
3) By location: Some businesses choose particular locations to target suitable customers.
4) By income: Some businesses target customers on high incomes, while others may meet the needs of those on lower incomes.
Why do businesses segment markets?
To provide customers with the most suitable products: Goods and services that more fully meet the needs of one or more market segments are more likely to satisfy greater numbers of customers And this will in turn lead to higher sales.
Price products more flexibly: A business that segments its market can sell different products at different prices to meet the needs of its customers. This can increase revenue from sales.
Develop new product successfully: If a business has segmented the market in which its products are sold, it will have more detailed understanding of its needs. This will assist the business in developing new products to meet these needs and can help maintain customer loyalty.
What is a market?
A place where buyers and sellers come together to exchange goods and services.
What two ways can the size of a market be measured in?
1) The quantity of products sold.
2) The value of product sold: The value is total revenue received from the sale of all products in the market over a period of time.
