Topic 1 – Market Segmentation 5
Key Term Definition
Market segmentation
Splits up the market into sub groups based on similar
characteristics to enable a business to better target
relevant customers
Mass market
Where a business sells to the largest part of the
market where there are many similar products on
offer
Niche market
Where a business targets smaller segments of a
larger market, where customers have specific wants
and needs
Important Key Terms
Market
segment
Age
Gender
Income
Geographi
cal
location
Lifestyle
Ways of Segmenting a Market
Why do businesses identify their target market and
build up a customer profile?
Getting this right means that businesses are less likely to waste money on
marketing and promotion and also means that they are more likely to make
more profit as their target audience is more likely to buy the products
Why do businesses segment the market?
Dividing the mass
market
Businesses do this to target the right products at the right people,
to satisfy customer needs, and to increase sales and profits.
Targeting the right
products at the right
people
Targeting the right products at the right people is very important.
Getting this right means that businesses are less likely to waste
money on marketing and promotion.
Satisfying customer
needs and wants
. Customer needs change constantly so it is important that
businesses are able to keep up with and match these needs
consistently. Getting products to match specific needs increases
satisfaction, creating brand loyalty
Increasing sales and
profits
By targeting specific customer groups, business can increase their
sales and profits. Segmenting products means that businesses are
likely to create products and services that have a higher chance of
selling
