(a) Explain the meaning of market segmentation
(b) List and explain four factors to be considered in segmenting a market
Explanation
a)Market segmentation is the act of dividing a market into sub-markets of buyers with common needs or characteristics and designing a marketing mix to satisfy their needs and wants.
b(i) Factors to be considered in segmenting a market:
i. Income
ii. Sex/Gender
iii. Geographic location
iv. Age
v. Family size
vi. Benefit sought/needs;/Behaviour
vii. Occupation
vii. Education
ix. Social class
x. Ethnicity/Culture/Religion;
xi Rate of usage
(b)(ii) Explanation of factors affecting market segmentation:
i. Income: This looks at the consumer's disposable income. This group is made up of high, middle or low income earners. Their purchasing power and needs vary according to their income levels.
ii. Sex/Gender: Here the gender of the consumers is taken into consideration when grouping the market, i.e whether they are males of females.
iii. Geographic location: Under this, the market is grouped based on the location of the consumers. it can be urban, semi-urban, local, foreign or rural area. It may also take into consideration climatic or regional conditions.
iv. Age: Here, the grouping of market is done in line with the age of the consumers. That is children, teenagers, adults or the aged.
v. Family size: The number of people in a family will affect the size of their purchases.
vi. Benefits sought/needs/ behaviour: This is based on the consumers needs, wants and buying behaviour.
vii. Occupation: Market can be grouped to address the occupational requirements of the consumers. Different occupations determine the needs and wants of a buyer.
vii. Education: Educational level can affect what consumers demand. So, the market could be grouped based on the educational levels to satisfy their needs.
ix. Social class: One's standing or status in the society affects one's choices of goods. Hence, market may be grouped in line with different social status
x. Ethnicity/Culture/Religion: Market segmentation could be based on races, beliefs, religion and ways of life.
xi. Rate of usage: This take into consideration how consumers use the products. There are long or short period of usage and large or small product size usage.