Which term describes dividing customers into groups that share common characteristics so that a business can aim its product at them?
Market segmentation
What is meant by 'target market'?
A group of customers with shared characteristics that a product is aimed at
Which term describes the practice of aiming a business's promotional activities only at the group of customers most likely to buy its product?
Targeted marketing
What is meant by 'customer retention'?
Keeping existing customers buying from a business over time
Which term describes the proportion of total sales in a particular industry that is held by one business?
Market share
What is meant by 'competitive edge'?
An advantage that makes a business more appealing to customers than its rivals
What is meant by 'brand loyalty'?
Customers repeatedly choosing to buy from the same business over time
Which of these is a benefit of market segmentation for a small business?
It helps products to match the needs of a chosen customer group
How does segmenting the market help a business to understand its customers better?
It groups customers who share similar characteristics and needs
A business selling hiking equipment advertises in a walking magazine because walkers are its target group. What is the benefit of this?
The promotion is seen by customers who are likely to buy
Why can effective market segmentation increase customer retention?
Customers are satisfied with the product and buy from the business again
How does market segmentation help a business to increase its profits?
It sells more because its products suit the target customers
What does an increase in market share mean for a business?
It sells a larger proportion of all the sales in its market
Why does targeting one customer group help a business to develop its brand?
The group gets to know the business and trusts its products
How can knowing its target market help a business to develop ideas for growth?
It can spot new products that the target customers would buy
A business splits its customers into groups and finds that one group is most likely to buy its new product. How does this help the business to make decisions?
It knows which customers to aim its product and adverts at
How can segmenting its market help a small business to increase its market share?
It wins more of the sales in its market from rival businesses
Why is it easier for a business to write its marketing messages once it has segmented its market?
It knows the needs and interests of its target group
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