AS Business: Segmentation & Differentiation

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  • Created on: 20-03-13 22:56
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Market Segmentation is the acknowledgement by companies that customers are not all the same.
A Market segment is a group of customers from the market that have similar sets of characteristics.
How markets can be segmented:
DEMOGRAPHIC e.g. age, gender, income levels, religion, occupation, socio-economic groupings: A is higher professional whereas E is
casual workers and unemployed.
GEOGRAPHIC e.g. postcode groupings, rural/urban, North/South.
BEHAVIOURAL peoples purchasing behaviour.
PHYSCHOGRAPHIC peoples lifestyle, attitudes, personality and values ­ often stereotypes.
Market Differentiation
Mass Marketing
The attempt to create products or services that have universal appeal; aiming the product at the whole market.
The ultimate prize of marketing is the creation of generic bands; they are so totally associated with the product that customers treat the
brand name as if it were a product category e.g. Hoover.
Niche Marketing
Niche market businesses sell specialised, differentiated products that are designed to appeal to their very specigic target audience.
Firms selling niche products can exploit the low price sensitivity created by product differentiation by raising prices.
Small niche operators lack the economies of scale required to compete on price with larger, established operators.
Location Factors

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QUANTITATIVE FACTORS consider the financial impliacations of different locations.
Cost of Land
Accesibilty to Supplies
Accesibility to Labour
Accesibilty to customers
Government Grants or intervention.
Resources/Raw materials.
IT (broadband)
QUALITATIVE FACTORS take into account personal issues and tastes. E.g. Family links.…read more


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