SGS Business 1.2.3 Market Segmentation

Market segmentation:

• Divides customers into sub groups

• Is a method of promotion

• Is a qualitative form of market research

• Transports products to customers

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 '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

An internet travel agent sells expensive round the world cruises. Which of the following market segments is the travel agent most likely to target?

• Families with children under 5

• Local residents

• People with high incomes

• Young, single men

The particular market segment at which a business aims its products is known as the:

• Target Market

• Unique Selling Point

• Main Market

• Market Leader

The market for a product or service can often be broken down into different area where customers have distinct needs and wants. These areas are called market:

• Sections

• Segments

• Synergies

• Forces

Which of the following is an advantage of using market segmentation?

• It allows a business to charge higher prices

• It lets a business invest more in plant and machinery

• It saves business money by avoiding the need for TV advertising

• It allows a business to target its promotional strategy more effectively.

What is a disadvantage of using market segmentation?

• You can't sell your products to everyone

• It is rarely effective

• It requires additional market research

• Not everyone likes tangerines

A disadvantage of market segmentation is...

• Making different product variants for different segments is expensive

• It will lead to products better suited to customer needs

• It will reduce marketing costs by not targeting unprofitable segments

• It helps businesses avoid entering overly-competitive markets

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