Business Studies�Marketing Segmentation Notes

Revision notes on marketing segmentation for AS Business Studies.

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Angela Emma Rudd BMA
3rd October
Business Studies ­ Marketing
A market analysis involves a detailed examination of market conditions, such as
the size of the market, market shares and market segmentations.
The Size of the Market
An estimate of the market size can be made in terms of total volume of sales
(amount sold) or the value of sales (value being in pounds). Firms will be
interested in both the existing and future size of the market.
Market Share
The market share of a firm or brand is the percentage that it has of the market
Segments within the Market
A segment is a part of a market made up of consumers with similar needs and
characteristics. If firms can identify particular segments then they can target
these and adjust their market accordingly. Segmentation happens in most
Ways of Segmenting Markets
There are many different ways of segmenting markets
Age ­ many products are aimed at particular age groups in society.
Gender ­ male or female
Income ­ business produce goods and services fro groups with particular
levels of income
Socioeconomic groupings ­ this is a method of segmenting people
based on the income and jobs. Different categories include A, B, C1, C2,
D and E. Group A are senior managers and professionals and group E
are low income and unemployed people.
Usage rate ­ some firms distinguish between heavy users and light users
of their product.
Purchase occasions ­ this is about when people buy things, if people buy
certain products at certain occasions then producers try to increase the
number of occasions when the product would be bought.
More modern methods of segmentation focus on the motives people have when
they buy a product.
Is Segmentation Worth it?
If a firm can identify different groups within a market, it can offer products that
precisely match their requirements. Instead of producing one version of their
product or service for everyone, firms can adjust what they do according to the

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Angela Emma Rudd BMA
3rd October
different needs of each segment, which should lead to more sales and profit. A
firm must weigh up the potential benefits with the possible costs.
What makes Market Segment Attractive?
Not all market segments are necessarily attractive. A market segment must be
big enough to be worth competing in. for an assetled approach it must also fit
with the firm's own strengths.…read more


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