1. How would you define market segmentation? ( 5 marks)
A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. Generally three criteria can be used to identify different market segment. Homogeneity 同质化, common needs within segment. Distinction区别, unique from other groups.Reaction活跃, similar response to market.For example, an athletic footwear company might have market segments for basketball players and long-distance runners. As distinct groups, basketball players and long-distance runners will respond to very different advertisements. 2. How do geographic segmentation and demographic segmentation differ? (10 marks)

Geographic segmentation is based on climate, density, market size, world or states. Many companies use climate if their products or services rely on the weather, such as snow shovels, melting pavement salt, wave runners and boats. For example, USA is more interested in targeting geographic locations that are located near the park in a 100-mile radius. They believe some customers will fly in from out of state, so in addition, they will target large-density areas nearby. However, demographic segmentation is extremely important to all marketing departments since the data is easily available and does drastically affect buying patterns. Age, income, gender, ethnic background 民族背景 and family life cycle are all important factors of demographic segmentation. Example, the park is going to use an age range of 2-60 years of age so they can include kids, teens, parents and even grandparents. The income level would have to be middle to upper class - $50,000 annual income or above -