Question

1. Define market segmentation and note the bases on which marketers segment. (b)Discuss why segmentation is such a key marketing concept. (c) Discuss how your team chose the market segment(s) for your group project.

NOTE THIS IS A MARKETING QUESTION

Answer 1

Answer

Market Segmentation:

Market Segmentation is a process of dividing the market of potential customers into different groups and segments based on certain characteristics. The member of these groups shares similar characteristics and usually have one or more than one aspect common among them.

Bases of Market Segmentation:

• Gender

The interests, needs and wants of males and females differ at many levels. Thus, marketers focus on different marketing and communication strategies for both. E.g clothing, and jewellery industry,

• Age group

Most of the products in the market are not universal to be used by all the age groups. Hence, by segmenting the market according to the target age group

• Income

Income decides the purchasing power of the target audience. It is also one of the key factors to decide whether to market the product as a need, want or a luxury

• Place

The place where the target audience lives affect the buying decision the most. A person living in mountains will have less or no demand for ice cream than the person living in a desert.

• Occupation:

Occupation influences the purchase decision of the audience. Engineer, entrepreneur & doctor has different purchasing habits.

• Usage
• Lifestyle

(b) why segmentation is such a key marketing concept.

Market Segmentation is a convenient method marketer use to cut costs. It allows them to be specific in their planning and thus provide better results. It ultimately helps them to target the niche user base by making smaller segments. The importance of market segmentation is that it allows a business to precisely reach a consumer with specific needs and wants. In the long run, this benefits the company because they can use their corporate resources more effectively and make better strategic marketing decisions

(c) Discuss how your team chose the market segment(s) for your group project.

Size: of Segment. How big is the market segment you are going to target. Niche markets have a lesser size but then the growth rate is fantastic.

Growth rate: you need to see the growth rate before you choose a market segment.

Profitability

Economies of Scale

Risk: Understanding the amount of risk associated with your market segment is important before choosing a market segment.