1.2.3 Market segmentation

Question 1

What is segmentation?

Answer 1

Market research will show that a particular
product appeals to a specific group of people
Businesses need this information to identify
groups with similar wants and needs

Question 2

Market segment - Location

Answer 2

A business may decide to
sell its product in just one
country, one region (like
Scotland), or in an even
smaller area

Question 3

Market segment - lifestyle

Answer 3

Customers can be grouped
according to the way they
lead their lives and the
attitudes they share

Question 4

Market segment - Income

Answer 4

Establishing a group’s disposable income is
important so that products can be targeted to
the relevant income group

Question 5

Market Mapping – why?

Answer 5

Can spot a gap in the market
Can focus on features to make their products different
to competitors

Question 6

Market segment - demographics

Answer 6

Demographics mean statistical data relating to the population
and particular groups within it

Question 7

Market segment
Age

Answer 7

Each age group will have different needs and
wants in terms of products and services

Question 8

Market mapping – how?

Answer 8

In order to identify a gap in the market, it may
be useful for a business to construct a diagram
of where competitors are on two axes