Market Segmentation Basics

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Questions and Answers

What is the primary purpose of market segmentation?

To minimize production costs

To produce a single product for all markets

To analyze competitor strategies

To identify and serve different customer groups effectively (correct)

Which of the following best describes geographic segmentation?

Identifying customers based on their lifestyle choices

Grouping consumers by their buying behavior and preferences

Splitting the market into different geographical units (correct)

Dividing the market based on consumer age and income

How does KFC utilize geographic segmentation?

By tailoring its menu offerings to local tastes (correct)

By discounting prices based on location

By focusing solely on digital marketing strategies

By offering the same menu globally

What is a common practice of Coca-Cola in geographic segmentation?

Tailoring advertising campaigns to local cultural norms Signup and view all the answers

Which example demonstrates geographical segmentation by Uniliver?

Introducing toothbrush in countries without regular use of one Signup and view all the answers

What implication does the location parameter have in geographic segmentation?

It can range from small neighborhoods to entire continents Signup and view all the answers

Which of the following is NOT a factor considered in geographic segmentation?

Consumer income Signup and view all the answers

Geographic segmentation allows companies to tailor their marketing strategies based on which factor?

Local customs and traditions Signup and view all the answers

What is the primary focus of occasion-based segmentation?

Tailor marketing efforts to specific events or occasions Signup and view all the answers

How does loyalty segmentation typically categorize customers?

By their frequency of purchase and engagement level Signup and view all the answers

What distinguishes heavy users from light users in the usage segmentation strategy?

Heavy users purchase most frequently, while light users purchase infrequently Signup and view all the answers

Which of the following is a key criterion for effective segmentation as per the MASDA framework?

Measurable characteristics of the segment Signup and view all the answers

Which of these benefits would likely appeal to customers with oily skin?

Oily skin fix Signup and view all the answers

What type of segmentation would focus on customers purchasing for birthdays?

Occasion-based segmentation Signup and view all the answers

Which segment would likely be characterized as medium users?

Customers who rarely purchase but do so occasionally Signup and view all the answers

What common characteristic is associated with vegan or cruelty-free consumers?

Preference for non-irritating ingredients Signup and view all the answers

Which of the following is NOT a parameter used in demographic segmentation?

Emotional Stability Signup and view all the answers

How is the concept of demographic segmentation applied in the examples provided?

Using parameters like age and income Signup and view all the answers

Which statement exemplifies demographic segmentation effectively?

A television advert based on family size and age variations Signup and view all the answers

What demographic factor is primarily used by the companies selling Elephant House products?

Age Signup and view all the answers

Surf Excel and Sunlight are examples of demographic segmentation that focuses on which parameter?

Income Signup and view all the answers

An example of demographic segmentation based on generation would be?

Products targeted at Millennials versus Baby Boomers Signup and view all the answers

The term 'family size' in demographic segmentation typically refers to?

Household composition and its impact on purchasing patterns Signup and view all the answers

Which of the following best describes the role of 'occupation' in demographic segmentation?

It significantly influences disposable income and buying patterns. Signup and view all the answers

Study Notes

Market Segmentation Overview

Market segmentation involves dividing a market into distinct groups of buyers based on differing needs, characteristics, or behaviors.
The goal is to identify and effectively serve diverse customer groups by customizing marketing strategies to their unique preferences.

Bases for Segmentation

Geographic Segmentation:
- Involves segmenting markets based on geography such as nations, regions, cities, or neighborhoods.
- Example: KFC and McDonald's adjust their menus to suit local tastes.
- Coca-Cola adapts advertising for cultural relevance, as seen in their Ramadan campaigns in the Middle East.
Geographic Parameters:
- Location can vary in scale from neighborhoods to continents.
- Unilever’s product offerings differ based on local dental practices, promoting mouthwash in areas where toothbrushes are less common.
Occasion Purchasing:
- Businesses target customers based on significant events or holidays, driving tailored marketing efforts.
- Examples include products for special events like weddings or seasonal purchases for back-to-school sales.
Loyalty Segmentation:
- Customers are categorized based on their purchasing history and engagement levels with a brand.
- Starbucks uses a loyalty program that rewards purchases through its app, encouraging repeat business.
Usage Segmentation:
- Classifies customers as heavy users, medium users, or light users based on purchase frequency.

Criteria for Effective Segmentation (MASDA)

Measurable: Segments must be quantifiable in terms of size, purchasing power, and demographic attributes.
Example: In urban areas like China and Japan, capsule hotels serve budget-conscious consumers, while demand for traditional hotels remains high among tourists.

Demographic Segmentation

Involves categorizing consumers based on variables like age, gender, family size, income, occupation, and education.
Example: Soft drink brands may market products designed specifically for children or youth based on age demographics.

Psychographic Segmentation

Focuses on social class, lifestyle, or personality traits to define market segments.
Luxury brands like Rolex appeal to affluent consumers, while Redbull targets adventurous and energetic individuals.

Personality Traits

Personality segmentation recognizes unique sets of traits influencing consumer behavior.
Openness pertains to willingness for new experiences, while conscientiousness relates to organization and attention to detail.

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Description

Explore the fundamentals of market segmentation and its significance in marketing strategies. Learn how dividing buyers into distinct groups helps tailor products and marketing approaches to meet varying customer needs. This quiz will deepen your understanding of effective marketing practices.