The Reasons Why Businesses Segment The Market - BBC Bitesize

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1. Identifying and understanding customers
2. How markets are segmented
3. The reasons why businesses segment the market

The reasons why businesses segment the market

Businesses segment markets for a range of reasons. The main aim of businesses with segmentation is to divide mass markets. Businesses do this to target the right products at the right people, to satisfy customer needs, and to increase sales and profits.

Dividing mass markets means that businesses split customers into subcategories to provide them with a focus when developing products and undertaking marketing activities.

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.

Type of segmentation	Example
Age	Toys being aimed at children
Gender	Hair products and make-up Clothing
Income	Cars Holidays Clothing Some food items
Geography	Foods having a reputation for being from different locations Selling appropriate footwear in the lake district
Lifestyle	A rugby club only targeting rugby fans A fishing equipment brand only targeting fishermen Holiday companies targeting people looking for holidays

Type of segmentation	Age
Example	Toys being aimed at children

Type of segmentation	Gender
Example	Hair products and make-up Clothing

Type of segmentation	Income
Example	Cars Holidays Clothing Some food items

Type of segmentation	Geography
Example	Foods having a reputation for being from different locations Selling appropriate footwear in the lake district

Type of segmentation	Lifestyle
Example	A rugby club only targeting rugby fans A fishing equipment brand only targeting fishermen Holiday companies targeting people looking for holidays

Satisfy customer needs

Customers have different needs and requirements that must be satisfied by businesses. Customer needs change constantly so it is important that businesses are able to keep up with and match these needs consistently.

An example of a customer need might be a segment of the market requiring low-cost food and drink. A business may set up aiming to meet this need.

Increase 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. For a small business, using segmentation to target a smaller group of customers could give them a higher chance of business survival.

Next upTest your understandingPrevious pageHow markets are segmented

More guides on this topic

• Market research - Eduqas
• The marketing mix - Eduqas
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• Promotion - Eduqas
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