Why do businesses use market segmentation?

Segmentation lets a business design products and promotions for a particular group of customers. Targeted marketing wastes less money and can raise sales.

What are the four main ways of segmenting a market?

A market can be segmented by gender, age, location and income. Many businesses combine several of these.

What is segmentation by age?

Segmentation by age groups customers into age bands such as children, teenagers and the over-60s. A holiday company may run separate holidays for young families and for older travellers.

What is segmentation by gender?

Segmentation by gender aims products at men or at women. Razor and cosmetics brands often run separate ranges for each.

AQA GCSE Business 8132

Business in the Real World

Topic overview What a business is and why people start one Goods, services, needs, wants and factors of production Business sectors, entrepreneurs and a changing business environment Sole traders, partnerships, limited companies and not-for-profit organisations Business aims and objectives Why business objectives differ and change Stakeholders and their influence on businesses Factors affecting business location Business planning and basic financial terms Expanding a business and economies of scale

Influences on Business

Topic overview E-commerce and digital communication Ethics, the environment and sustainability Interest rates, employment and consumer spending Globalisation and exchange rates Employment, health and safety and consumer law Competition, risk and uncertainty

Business Operations

Topic overview Job, flow and lean production Managing stock: just in time and just in case Suppliers, procurement, logistics and supply chains Quality control, quality assurance and TQM Customer service and the sales process

Human Resources

Topic overview Organisational structures, span of control and delegation Recruitment, selection and contracts of employment Financial and non-financial methods of motivation Induction, on-the-job and off-the-job training

Marketing

Topic overview Identifying and satisfying customer needs Market segmentation Purpose of market research and primary and secondary research Market research methods and interpreting findings Pricing methods and factors affecting price New products, USP, brand image and the Boston Matrix Product life cycle and extension strategies Promotional methods and the promotional mix Channels of distribution, e-commerce and m-commerce The integrated marketing mix

Finance

Topic overview Sources of finance Cash flow and cash flow forecasts Financial calculations and average rate of return Break-even charts and margin of safety Income statements and statements of financial position Profit margins and judging financial performance

Marketing

Market segmentation

3 things to know
Paper 2

Overview

Segmentation and target markets, dividing a market by age, gender, location and income with examples from cars, toys and bakeries, its benefits and drawbacks, and niche against mass markets.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

How does a niche market differ from a mass market?

Key term

What is market segmentation?

Key term

What is a target market?

Questions from this subtopic

Each one with the model answer underneath.

1
What is market segmentation?
Model answer
Market segmentation is dividing a market into groups of customers with similar characteristics. Each group is called a market segment.
2
What is a target market?
Model answer
A target market is the group of customers a business aims to sell its product to. A target market is often one or more market segments.
3
Why do businesses use market segmentation?
Model answer
Segmentation lets a business design products and promotions for a particular group of customers. Targeted marketing wastes less money and can raise sales.
4
What are the four main ways of segmenting a market?
Model answer
A market can be segmented by gender, age, location and income. Many businesses combine several of these.
5
What is segmentation by age?
Model answer
Segmentation by age groups customers into age bands such as children, teenagers and the over-60s. A holiday company may run separate holidays for young families and for older travellers.
6
What is segmentation by gender?
Model answer
Segmentation by gender aims products at men or at women. Razor and cosmetics brands often run separate ranges for each.

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Business in the Real World

Influences on Business

Business Operations

Human Resources

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