MARKET SEGMENTATION

• What are market segments?

  part of a whole market where a particular customer group has similar characteristics
• What is social class?

  divisions by which individuals and groups are classified on the basis of esteem and prestige acquired mainly through economic success
• What are socio-economic groups?

  a division of people according to social class based on employment status
• What are the methods of market segmentation?

  • location (geographical)
  • demographic
  • lifestyle (psychographic)
• What is location (geographical) segmentation?

  different customer groups likely to have different needs dependant on where they live. e.g. groups living in hot climates have different needs to those in cold climates
• What is demographic segmentation?

  dividing business markets according to age, gender, income, social class, ethnic origin or religion of the population
• What is lifestyle (psychographic) segmentation?

  two people that could be the exact same, have the exact same in common but have completely different spending patterns. Psychographic segmentation is grouping people by lifestyles.
• What are different ways of lifestyle (psyhographic) segmentation?

  • targeted television channels
  • targeted adverts
  • targeted holidays
• What are some benefits of market segmentation?

  • it can increase revenue. This is because some businesses charge higher prices to different customer groups
  • customers may be more loyal to businesses that provide products especially for them
  • may avoid wasting resources if adverts are targeted to those who want to see them