Business Studies - 0450 CIE

How And Why Market Segmentation Is Undertaken:

Muhtasari

Not all customers are the same. The chocolate a small child loves is not the luxury box an adult buys as a gift; the car a high earner desires is not the one a budget-conscious family chooses. Smart businesses stop treating 'the market' as one big blur and instead split it into groups of similar customers. That splitting is called market segmentation.

In this lesson you will learn how markets can be segmented, by age, income, location, gender and more, why segmentation benefits a business, and how to recommend and justify the right method of segmentation for a given situation. By the end you will be able to target a product at the customers most likely to buy it.

Malengo

  1. How markets can be segmented, e.g. according to age, socio-economic grouping, location, gender
  2. Potential benefits of segmentation to business
  3. Recommend and justify an appropriate method of segmentation in given circumstances

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Maelezo ya Somo

A business with a limited marketing budget cannot appeal to everyone at once. By dividing the market into segments and aiming its product and advertising at the right segment, a firm spends its money where it works hardest and increases sales. Segmentation underpins almost every marketing decision, and exam questions often ask you to choose and justify a method for a particular product.

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Tathmini ya Somo

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  1. Market segmentation means dividing a market into: A. fixed and variable costs B. groups of customers with similar characteristics C. public and private sectors D. exports and imports Answer: B
  2. Selling a budget car to low earners and a luxury car to high earners is segmentation by: A. age B. socio-economic group (income) C. location D. gender Answer: B
  3. A benefit of market segmentation to a business is that it: A. removes all competition B. makes marketing spending more cost-effective C. eliminates the need for a product D. guarantees zero costs Answer: B
  4. Selling waterproof coats only in a rainy region is segmentation by: A. gender B. income C. location/region D. lifestyle Answer: C
  5. A segment whose needs are not currently being met is called a: A. gap in the market B. balance of payments C. break-even point D. trade credit Answer: A

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Vitabu Vinavyopendekezwa

Cambridge IGCSE and O Level Business Studies
Cambridge IGCSE and O Level Business Studies
Manukuu: Fifth edition
Mchapishaji: Hodder Education
Mwaka: 2018
ISBN: 978-1-5104-2123-3
Maelezo: Endorsed textbook with full coverage of the 0450/0986 syllabus, case studies and exam-style questions.
Cambridge IGCSE and O Level Business Studies Revised Coursebook
Cambridge IGCSE and O Level Business Studies Revised Coursebook
Manukuu: Third edition
Mchapishaji: Cambridge University Press
Mwaka: 2018
ISBN: 978-1-108-56398-7
Maelezo: Endorsed coursebook with international case studies and activities for the Core and Supplement content.

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