Market Segmentation Concepts

What is the primary purpose of market segmentation?

Which of the following is NOT a way to segment markets?

How does market segmentation help in product marketing?

Which factor is NOT typically considered in market segmentation?

What does psychographic segmentation primarily focus on?

Which term refers to dividing a market based on consumer habits and usage?

What is a benefit of identifying targeted consumer groups through market segmentation?

What is the main goal of market segmentation?

What is the primary goal of market segmentation research?

Which of the following demographic groups is willing to pay the highest average price for coffee?

How does market segmentation benefit a company in terms of product discovery?

Based on the provided data, which demographic group visits the coffee shop the most frequently?

Which statement is true regarding the total market potential for coffee consumption?

Market Segmentation

Market segmentation is a method of grouping potential customers into categories based on factors like demographics, geography, behavior, or psychographics. This helps businesses understand and target their marketing efforts more effectively.
Market segmentation seeks to identify targeted consumer groups to tailor products and branding effectively.
Market segmentation can be done geographically, demographically, or behaviorally.
Market segmentation helps companies mitigate risk by:
- Identifying products most likely to succeed within a target market
- Determining the best marketing and delivery methods for those products

Criteria for Segmenting the Market

The text does not explicitly list segmentation criteria; however, the provided information suggests that segmentation is based on:
- Demographics (e.g., age, gender, income, education)
- Geographic location
- Lifestyle and behavior (e.g., purchase habits, interests, values)

Market Segmentation Research

Market segmentation research helps companies identify segments within a market.
This research is used to develop tailored strategies and tactics for each identified segment.

Activity

The text presents an example of a market segmentation study focusing on coffee consumption. It uses a hypothetical population of 100,000 people divided into four segments: students, working individuals, retirees, and others.
The study analyzes:
- The percentage of each segment in the total population
- The percentage within each segment that drinks coffee
- The average number of times each segment visits a coffee shop per week
- The price each segment is willing to pay for a cup of coffee
The activity highlights the importance of understanding:
- Who occupies the market
- What they buy
- Why they buy it
- When they buy it
- Where they buy it
- How they buy it
- Who participates in the purchase decision

Dive into the principles of market segmentation and learn how businesses categorize potential customers based on demographics, geography, and behavior. Understand the importance of tailoring marketing strategies to targeted consumer groups for better product success and risk mitigation.