80) Explain the different segmentation variables used in segmenting consumer markets.
Answer:
1. Geographic segmentation calls for dividing the market into different geographical units, such
as nations, regions, states, counties, cities, or even neighborhoods. A company may decide to
operate in one or a few geographical areas or operate in all areas but pay attention to
geographical differences in needs and wants.
2. Demographic segmentation divides the market into segments based on variables such as age,
life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.
Demographic factors are the most popular bases for segmenting customer groups.
3. Psychographic segmentation divides buyers into different segments based on social class,
lifestyle, or personality characteristics. People in the same demographic group can have very
different psychographic characteristics.
4. Behavioral segmentation divides buyers into segments based on their knowledge, attitudes,
uses, or responses concerning a product. Many marketers believe that behavior variables are the
best starting point for building market segments.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business
markets.
Difficulty: Moderate
81) Describe how marketers use multiple segmentation bases to their advantage.
Answer: Marketers rarely limit their segmenting analysis to only one or a few variables.
Instead, they use multiple segmentation bases in an effort to identify smaller, better-defined
target groups of consumers who share likes, dislikes, lifestyles, and purchase behaviors.
Companies often begin by segmenting their markets using a single base, and then expand using
other bases.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business
markets.
Difficulty: Moderate
82) Why do companies opt for market segmentation?
Answer: Buyers in any market differ in their wants, resources, locations, buying attitudes, and
buying practices. Through market segmentation, companies divide large, heterogeneous
markets into smaller segments that can be reached more efficiently and effectively with
products and services that match their unique needs.
AACSB: Analytical thinking
Skill: Concept
Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business
markets.
Difficulty: Moderate
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