2.1.8
Market Segmentation
Market Segmentation
Market Segmentation
Market segmentation is the process of dividing potential customers into different groups based on characteristics like age, gender, income and much more. Businesses use market segmentation for a variety of reasons:


Choosing market mix
Choosing market mix
- When choosing the product, geographic, promotional and price segmentation can help a business to understand its customers’ needs and wants.
- For example, Next provides clothing aimed at infants and toddlers using its Next Kids range.


Choosing promotion
Choosing promotion
- Advertising in a newspaper probably is not the best way to target teenage girls, but a teenage magazine like Bliss might be.
- Segmenting a market can give businesses ideas about how best to promote their products.


Market mapping
Market mapping
- Market mapping is a process to identify a gap in the market by looking at what competitors offer.
Methods of Market Segmentation
Methods of Market Segmentation
Customers can be segmented based on lots of different variables:


Gender
Gender
- Some products are aimed primarily at either males or females.
- Boohoo.com is an online fashion retailer that primarily targets females. Advertising to lots of males may not be the most effective strategy.


Age
Age
- Products can be aimed at a specific age range.
- A business is unlikely to advertise mobility scooters to people under 40.


Location
Location
- Customers’ wants and needs often change based upon where they live or where they are born.
- There are many supermarkets focusing on Polish food on some high streets in the UK.
- It makes more sense for these supermarkets to locate where there are lots of Polish families living.


Income
Income
- Certain products (luxury products) need to be aimed at people who earn a certain amount of money.
- For example, high end kitchens (priced at £20,000) are more likely to be effective advertising in magazines like Ideal Home or the Sunday Times because these magazines tend to have readerships with high incomes.
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
Jump to other topics
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
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