3.1 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

Which market segments would this product appeal to?

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

How would you change this product so that it appealed to young males?

• Leave the colour as boys like this colour anyway
• Change the colour to blue and use different pictures to fairies, by using superheroes. 

Which market segments would this service appeal to?

• Male and females with children, over 18, any income, who enjoy holidays as a lifetsyle choice
• Males and females, 60+, without children, who are sporty and have high incomes