1.2.3 Market Segmentation

Question 1

Market Segment

Answer 1

A group of buyers with similar characterisitics

Question 2

Methods of segmentation

Answer 2

-Demography
-Income
-Gender
-Age
-Location
-Lifestyle

Question 3

Market Segmentation Benefits

Answer 3

-Meet specific needs
-Differentiate products
-Focus on specific groups of customers
-Target marketing activity
-Develop a unique brand image
-Build relationships

Question 4

Market Segmentation Negatives

Answer 4

-Costly to cater for a range of customers
-Focusing on one type of customer can mean you lose others
-Characteristics can change over time

Question 5

Market Mapping

Answer 5

Used to find a gap in the market, and a businesses position in the market
Compares two variable, usually price and quality

Question 6

Market Mapping Benefits

Answer 6

-Helps identify opportunities
-Helps identify competition
-Helps support market segmentation

Question 7

Market Mapping Negatives

Answer 7

-Based on opinions rather than data
-Compares on only two variables

Question 8

Two ways to compete with competition to attract customers

Answer 8

-Price
-Differentiation

Question 9

Differentiation Methods

Answer 9

-Wider product range
-Better customer service
-Stronger brand image
-More convenient location
-Higher quality
-Better design

Question 10

Drawbacks of competition

Answer 10

-Lower prices to attract customers
-Lower profit margins