1. What is the difference between market segments and target markets? Market segments are groups that have been divided into smaller groups from the target market. Target markets are groups of people that a company has decided to market to.
2. What is demographic segmentation? Name and explain at least 5 different ways to demographically segment customers. Segment by tangible personal characteristics. Age, generation, Income, Gender, Family life cycle, Ethnicity, Family size, Occupation, Education, Nationality, Religion, Social class.
3. How would you describe psychographics? Name and explain at least 4 variables can you use to segment customers. Segment by age, income, occupation, education, household size. Activities, Interests, Opinions, and Values.
4. How would you describe product-related (behavioral) segmentation? Name and explain three variables to segment customers. It divides people and organization into groups according to how they behave with or act toward products.
(1) Benefits sought from the product (2) How often the product is used (usage rate) (3) Usage situation (daily use, holiday use, etc.) (4) Buyer's status and loyalty to product (nonuser, potential user, first-time users, regular user).
5. Explain each of these criteria for market segments:
a) Measurable purchasing power and size - The market should be sizeable enough to be profitable given your operating cost. Only a tiny fraction of the consumers in China can afford to buy cars. However, because the country's population is so large (nearly 1.5 billion people), more cars are sold in China than in Europe (and in the United States, depending on the month). Three billion people in the world own cell phones. But that still leaves three billion who don't.
b) Match with marketing capabilities - You might have a great idea to market home electronics to a large number of smaller market