Market segmentation

Give some examples of market segments

• Age

• Gender

• Religion

• Ethnicity

• Income

• Politics

• Location

What is market segmentation?

The process of splitting up a market into manageable segments.

What do some businesses target?

Some businesses target just one segment, others produce a range of products for different segments.

What is geographic segmentation?

Targeting a group based on their location.

e.g. regions, cities, neighborhoods.

What is demographic segmentation?

Age/ gender/ income/ socio-economic groups/ ethnicity.

What is psychographic segmentation?

Targeting a group with specific attitudes, opinions or lifestyles.

What is behavioural segmentation?

Targeting based on usage rate, loyalty, time and date of consumption etc.

What is income segmentation?

Based on level of income and profession.

What is the top income segment?

Higher managerial such as chief executives and directors.

What is the second top income segment?

Intermediate managerial such as solicitors, accountants and doctors.

What is the C2 income segment?

Skilled manual work such as plumbers, electricians and carpenters.

What things does behavioural segmentation look at?

• Reasons for making purchases e.g. needs, emotional, rewards.

• Frequency of purchase e.g. heavy user.

• Time of purchase e.g. seasonal, weakly.

• Brand loyalty.

What can the businesses that produce different products for different segments do?

Businesses that produce different products for different segments can increase revenue.

e.g. airlines charge much more for first class than economy on flight and can increase revenue.

What may customers be more loyal to?

Customers may be more loyal if products are tailored to their needs.

What can some businesses do by market segmentation?

Some businesses can market a wide range of goods.

How is advertising benefitted from market segmentation?

Advertising can be targeted at specific market segments so that advertising spend is more effective.

What is easier through market segmentation?

Becomes easier to identify and launch new products.

What can be identified for market segmentation?

Most profitable and least profitable customers can be identified so budget is not wasted.