Question 1: Define 'market segmentation' in your own words.

Answer: Market segmentation is the process of dividing a broad market into smaller, specific groups of consumers who have similar needs, preferences, or characteristics.

Question 2: List three different types of segmentation used by businesses.

Answer: Demographic segmentation, geographic segmentation, psychographic segmentation, and behavioural segmentation.

Question 3: Explain why a clothing retailer might choose to target teenagers rather than all age groups.

Answer: Targeting teenagers allows the retailer to focus marketing efforts on a specific demographic with distinct preferences, making advertising more effective and increasing sales among that group.

Question 4: Describe a scenario where geographic segmentation might be used by a business.

Answer: A business might target customers in urban areas with high-income levels for luxury products, while offering budget options in rural locations.

Question 5: Identify two challenges a business might face when segmenting its market.

Answer: Difficulty in accurately identifying and reaching specific segments; increased costs associated with creating tailored marketing campaigns for different segments.

Question 6: Explain the difference between demographic and psychographic segmentation.

Answer: Demographic segmentation divides the market based on characteristics like age, gender, income, and education, while psychographic segmentation is based on lifestyles, values, interests, and personalities.

Question 7: A sportswear company wants to target active young adults. Suggest two marketing strategies they could use.

Answer: Use social media advertising focusing on fitness and lifestyle; sponsor sports events or athletes popular among young adults.

Question 8: Sketch a simple diagram that illustrates how a business might segment its market based on age groups.

Answer: A large circle divided into sections labeled 'Children', 'Teenagers', 'Adults', and 'Seniors', with brief descriptions or examples for each segment.

Question 9: Describe how behavioural segmentation can help a business improve its marketing efforts.

Answer: Behavioural segmentation helps businesses understand customer purchasing habits, loyalty levels, and product usage, allowing them to tailor promotions and products to specific customer behaviors.

Question 10: Identify one benefit and one limitation of market segmentation.

Answer: Benefit: Allows businesses to target specific groups more effectively; Limitation: Can increase marketing costs and complexity.

Question 11: A company notices that a particular product is popular mainly among environmentally conscious consumers. What type of segmentation are they using?

Answer: Psychographic segmentation.