U2 AOS2 KK4 Market Segmentation

Question 1

Define market segmentation.

Answer 1

Market segmentation is the classification of customers or potential customers into groups or sub-groups (market segments).

Question 2

Why do businesses classify customers into market segments?

Answer 2

It helps businesses to understand their customers so that they can attract them to their product, which in turn helps them to establish a customer base and brand identity.

Question 3

Identify four market segments.

Answer 3

Behavioural
Geographic
Demographic
Income

Question 4

Demographic segment includes…

Answer 4

Age
Gender
Family size/stage
Income
Occupation
Education
Race
Religion
Nationality

Question 5

Behavioural segment includes…

Answer 5

-When customers buy
-How much customers buy
-Brand loyalty
-The benefit customers want from the product

Question 6

Income segment includes…

Answer 6

Socio economic grouping based on incomes

Question 7

Geographic segment includes…

Answer 7

-Region of the country
-Physical location (Metro or Regional)
-Characteristics of area (coastal, winery region, alps, agricultural etc)
-Spending patterns of the area.
-Climate
-Post codes

Question 8

Businesses segment markets to…
Increase ___________
Improve __________________
Use resources ____________
Increase customer _______
Create a competitive _____
Expand their __________
Form long-term __________

Answer 8

Sales
Personalisation
Efficiently
Loyalty
Advantage
Reach
Relationships