Segmentation:

Question 1

What is market segmentation?

Answer 1

The process in which a single market is divided into submarkets or sections

Question 2

What is are the advantages of segmentation?

Answer 2

• recognises that all consumers are not identical
• Products and marketing activities can be altered to meet the different needs of diverse groups of consumers and targeted more precisely
• Less expensive and wasteful than marketing products at wide market segments
• May increase loyalty if the consumer feels that their needs are being met, which can lead to repeat purchases

Question 3

What are the disadvantages of market segmentation?

Answer 3

• Not everyone within a segment will behave in the same way
• It may be difficult to identify a segment, and consumers can belong to multiple segments at the same time
• Segmentation requires more detailed marketing research, which can prove costly — but beneficial — to the business
• A segment may be identified, but it may be too small and unprofitable to cater to

Question 4

What are the ways to segment a market?

Answer 4

Demographic
Geographic
Income
Behavioural

Question 5

What does demographic segmentation involve?

Answer 5

Breaking up a market into groups of customers with similar characteristics, such as age, gender and family circumstances e.g. differences in men and women, men tend to be less price-sensitive than women when shopping

Question 6

What does geographic segmentation involve?

Answer 6

Breaking up a market into groups of customers who live, work or spend their leisure time in defined locations e.g. urban VS rural customers

Question 7

What does income segmentation involve?

Answer 7

Breaking up a market into groups of customers with different levels of income, including their wealth e.g. high incomes VS limited budgets

Question 8

What does behavioural segmentation involve?

Answer 8

Breaking up customers who make different lifestyle, health or dietary choices that can provide opportunities for businesses e.g. vegetarians VS meat eaters