3.5.2 Market Segmentation

What is the process of dividing a market into smaller groups with similar characteristics and needs?

• Market research

• Market segmentation

• Market mix

• Product differentiation

What is an example of a demographic characteristic that businesses might use for market segmentation?

• Buying behaviour

• Personality

• Lifestyle

• Ethnicity

What is an example of a psychographic characteristic that businesses might use for market segmentation?

• Age

• Personality

• Gender

• Occupation

Which of the following is not a benefit of market segmentation?

• Increased customer satisfaction

• Improved product design

• Reduced competition

• Increased profits

What is an example of a benefit of segmenting a market by product usage?

• Increased customer satisfaction

• Reduced competition

• Improved product design

• Reduced marketing costs

What is an example of a potential disadvantage of market segmentation?

• Reduced competition

• Increased marketing costs

• Improved product design

• Increased customer satisfaction

Which of the following is not a factor in the size of a market?

• The number of potential customers

• The number of sellers

• The total value of products in the market

• The age of potential customers

How is market growth expressed?

• As a percentage

• By the number of units sold

• In pounds

• A logarithmic function

The total number of products sold in a year was 2,000 and the unit price was £2.00. What is the market size?

(a)  

Which of the following definitions can be used to describe a market? Click all that apply.

• A geographical area where buyers and sellers come together to trade goods and services for payment (e.g. a high street)

• Competition to sell a certain type of product (e.g. the housing market)

• The entire range of products sold by a business

• A type of customer demographic (e.g. the 18 – 21 age range)