Unit 5.1 - identifying and understanding customers

Question 1

Define market segmentation.

Answer 1

Involves dividing the market ( target / niche markets) into
parts which have specific characteristics

Question 2

Name the ways a market can be segmented. (9)

Answer 2

Age
Gender
Geographic/location
Income
Lifestyle
Ethnic background
Religion
Interests/hobbies
Socio-economic

Question 3

Name the reasons businesses segment the market. (4)

Answer 3

Produce goods and services to meet the needs of individual consumers
Promote and advertise their products to customers in the right place
Charge a price matched to the customers’ ability to pay
It helps to increase sales and profits

Question 4

Define mass market.

Answer 4

A large market of customers which is undifferentiated and that sells products and
services to suit a large number of people.

Question 5

Define niche market.

Answer 5

A smaller part of a large market, with products tailored to specific customer
needs.