Theme 1 - Market Segmentation

Question 1

What’s market segmentation

Answer 1

Market segmentation is the process of dividing a broad target market into smaller, more defined groups of consumers who share similar needs, characteristics, or behaviors.

Question 2

Advantages of market segmentation

Answer 2

• Targeted Marketing- allows businesses to create tailored marketing strategies for specific groups, increasing effectiveness of campaigns
• Better consumer understanding- companies can gain insights into customer needs and preferences
• Increased sales and profitability- higher sales as products and marketing resonate more with those customers
• Competitive advantage- by serving specific segments better than competitors, businesses can differentiate themselves in the market place

Question 3

Disadvantages of market segmentation

Answer 3

• Increased costs- creating different marketing strategies for various segments can be expensive
  Complexity- managing multiple segments can be complicated, requiring more recourses and efforts to make sure each segment is effectively targeted
• limited reach - focusing on specific segments may cause businesses to overlook potential customers, limiting overall sale opportunities