Market Segmentation & Targeting Flashcards

What is market segmentation?

Answer: The process of dividing a broad market into distinct subgroups of consumers with common needs or characteristics

Market segmentation divides a heterogeneous market into distinct subgroups (segments) that share common characteristics, enabling more targeted marketing strategies.

Which of the following is a demographic segmentation variable?

Answer: Household income

Household income is a demographic variable; demographics include age, income, education, gender, and family size — measurable population statistics.

What does psychographic segmentation primarily focus on?

Answer: Consumers' lifestyles, values, interests, and personality traits

Psychographic segmentation groups consumers based on psychological attributes such as lifestyles, values, attitudes, and interests, which go beyond observable demographics.

Which segmentation base divides the market by climate, region, or population density?

Answer: Geographic segmentation

Geographic segmentation groups consumers by location-based variables such as country, region, city size, climate, or urban vs. rural settings.

Which criterion for effective market segmentation requires that a segment must be large enough to generate sufficient revenue?

Answer: Substantiality

Substantiality means a segment must be large and profitable enough to justify developing a tailored marketing strategy for it.

Behavioral segmentation divides consumers based on:

Answer: Their purchase occasions, usage rate, loyalty status, and benefits sought

Behavioral segmentation uses actual consumer actions — such as purchase frequency, brand loyalty, usage occasions, and benefits sought — to group buyers.

A market segment is considered 'measurable' when:

Answer: Its size, purchasing power, and profile can be quantified

Measurability means researchers can obtain and quantify data about the segment's size, purchasing power, and key characteristics.