What is a benefit of market segmentation?

Market segmentation is when the market is broken down into categories with customers who hae similar characteristics such as age, tastes or location.A benefit of this is that the business can chose a target market. Some businesses are niche, which means that they appeal only to a small number of people. For example, Tim is planning to open a new health food store on the high street. In order for him to successfully advertise to those who would be interested in this, he would need to segment the market of his town. This would be segmentation according to lifestyles, otherwise known as psychographic segmentation. Only advertising to this segment will save advertising costs and means that Tim has the potential to build close relationships with this small group, which is useful for his new business to encourage repeat purchases.

TL
Answered by Tia L. Business Studies tutor

4193 Views

See similar Business Studies A Level tutors

Related Business Studies A Level answers

All answers ▸

What are the benefits of studying Business Studies?


What is break even?


What is product diversification?


To what extent is appointing a new leader likely to be a good way to improve business performance? Justify with reference to leaders (20 marks)


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences