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Define the term market segmentation - Leaving Cert Business - Question C (i) & (ii) - 2015
Question C (i) & (ii)
Define the term market segmentation. Illustrate two methods a business could consider to segment its market.
Worked Solution & Example Answer:Define the term market segmentation - Leaving Cert Business - Question C (i) & (ii) - 2015
Step 1
Define the term market segmentation.
Answer
Market segmentation involves dividing up the market into distinct, identifiable sections that share common characteristics. This process allows a firm to identify who their target market is effectively.
Essentially, it entails segmenting a broad target market into smaller sub-markets consisting of consumers or businesses that possess similar needs and preferences. Once these segments are identified, businesses can design and implement targeted strategies to meet the specific needs of each group.
Step 2
Illustrate two methods a business could consider to segment its market.
Answer
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Demographic Segmentation (who are you targeting?)
This method segments the market based on demographic characteristics such as age, income, gender, and more. By analyzing these demographics, a business can tailor its strategies accordingly. For instance,
- Age Group: A business might target different age groups like children or adults with specific products.
- Gender: Products may be tailored to males or females, such as different clothing lines or cosmetics.
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Geographic Segmentation (where are you targeting?)
In this approach, businesses classify their market based on geographic boundaries like nations, states, or cities. For instance,
- Regions: A company might design different marketing strategies for rural versus urban areas.
- Local Markets: Businesses can focus their efforts on local markets, targeting specific regions, such as holiday promotions for certain areas (e.g., Fáilte Ireland segmenting the country into regions).