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Market Segmentation

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Introduction

Market Segmentation Market segmentation is all about deciding what products to make and sell by finding out who the likely customers are going to be (e.g. aiming at young or old people.) By knowing this businesses are most likely to be making bigger profits rather than businesses that don't know the market network inside out. In order to target certain customers, businesses break down the market for certain products into different groups. This is known as Market Segmentation. Businesses can segment their market in different groups such as AGE, GENDER, INCOME, and AREA. There are other ways of segmenting such as: Repeat Customers Impulse Buying Planned Buying Brand Loyalty There are numerous reasons why businesses should attempt to segment their markets carefully. ...read more.

Middle

As you might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups. This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process. The main demographic segmentation variables are summarized below: Age Age is always needed and wanted with customers, so Marketers design, package and promote products differently to meet the wants of different age groups. Good examples include the marketing of toothpaste (contrast the branding of toothpaste for children and adults) and toys (with many age-based segments). Life-cycle stage A consumer stage in the life cycle is an important variable - particularly in markets such as leisure and tourism. ...read more.

Conclusion

This method divides the population up according to their occupation (i.e. Job) or the occupation of the head of the household (such as the mother or father in the family). The table below illustrates this method. Social grade Social status Head of household's Occupation A Upper middle class Higher managerial, administrative or professional such as doctors, lawyers and company directors. B Middle Intermediate managerial, administrative or professional such as teachers, nurses and managers. C1 Lower Middle class Supervisory or clerical and junior managerial, administrative or professional such as a shop assistant, clerks and police constables. C2 Skilled working class Skilled manual workers such as carpenters, cooks and train drivers. D Working class Semi-skilled and unskilled manual workers such as fitters and storekeepers. E The poorest in society State pensioners or widows, casual or lower grade workers, or long-term unemployed. ...read more.

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Here's what a star student thought of this essay

3 star(s)

Response to the question

This essay explains market segmentation in a concise way, offering an insight into how it can aid a business. At times, they assert their knowledge when I would have personally explained further. For example in the introduction, I would've made ...

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Response to the question

This essay explains market segmentation in a concise way, offering an insight into how it can aid a business. At times, they assert their knowledge when I would have personally explained further. For example in the introduction, I would've made reference that businesses who don't segment their market can't target marketing, thus affecting their profitability.

Level of analysis

This piece of coursework is able to identify how a business may segment their market. It was nice to see an example, showing how toothpaste is marketed differently depending on the age. Although this point is strong, the sentence introducing the paragraph makes no sense: "Age is always needed and wanted with customers". In my experience, essays can be penalised for such poor grammar as it doesn't display full understanding. Make sure you proof read any pieces of coursework! Whenever talking about market segmentation, and in particular age, I always mention price-discrimination. Bus services are able to charge different prices to different age groups to maximise their profits due to the different elasticities of demand. Analysis such as this will gain high marks. Although this essay ably notes how markets can be segmented, it doesn't really explain how a business can benefit from identifying their segments. For example, when saying that gender can be targeted, the essay could add that females are more likely to read magazines, so advertising can be allocated there.

Quality of writing

The essay is written well, but at times it is a bit colloquial. Phrases such as "knowing inside out" shouldn't be used in a piece of coursework - trying to cut out these phrases may help you find a technical term which is a useful alternative, increasing the level of analysis. I'm not quite sure why "Marketers" is capitalised in the middle of a sentence, or why "AGE, GENDER" is in block capitals. Although this doesn't affect the content, marks are always given for quality of written communication so it is key to give a good impression.


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