2.3 Market Segmentation

Define what is meant by the term 'market segmentation'

• The action or activity of gathering information about consumers' needs and preferences.
• The splitting of the market for product or service into different parts, or segments.

Define what is meant by 'target market'

• Group of customers at which a product or service is aimed, or targeted.
• Splitting the market for a product into different parts, or segments.

Which of the following are methods used to segment a market?

• Age, religion, school you go to, eating habits and views on education
• Age, gender, income, location and lifestyle.

How is a market segmented by 'age'?

• Products can be aimed specifically at males or females or both
• People have different hobbies and interests, which can be connected to income and location.
• Consumers live in different parts of the country and will have different tastes and needs.  Those living in the city might want a smaller car
• Age groups can be split into categories e.g. 0-10, 11-16 or 18+.  Or even by young and old

How is a market segmented by 'gender'?

• Products can be aimed specifically at males or females or both
• People have different hobbies and interests, which can be connected to income and location.
• Consumers live in different parts of the country and will have different tastes and needs.  Those living in the city might want a smaller car
• Age groups can be split into categories e.g. 0-10, 11-16 or 18+.  Or even by young and old

How is a market segmented by 'location'?

• Products can be aimed specifically at males or females or both
• People have different hobbies and interests, which can be connected to income and location.
• Consumers live in different parts of the country and will have different tastes and needs.  Those living in the city might want a smaller car
• Age groups can be split into categories e.g. 0-10, 11-16 or 18+.  Or even by young and old

How is a market segmented by 'lifestyle'?

• Products can be aimed specifically at males or females or both
• People have different hobbies and interests, which can be connected to income and location.
• Consumers live in different parts of the country and will have different tastes and needs.  Those living in the city might want a smaller car
• Age groups can be split into categories e.g. 0-10, 11-16 or 18+.  Or even by young and old

How is a market segmented by 'income'?

• People have different hobbies and interests, which can be connected to income and location.
• Consumers live in different parts of the country and will have different tastes and needs.  Those living in the city might want a smaller car
• The population can also be divided into; low income, middle income and high income. 
• Age groups can be split into categories e.g. 0-10, 11-16 or 18+.  Or even by young and old

Segmentation of a market is done to help with?

• Targeting advertising more accurately
• Increase the amount of products being made
• Improving the quality of goods being sold
• Making sure that workers are happy at work

Which market segments would this product appeal to?

• Young, females, any income, any location
• Any age group, females, high income, living in Scotland, sporty