1. Starter
Describe the kind of person that typically would buy the following products:

2. Pepsi Challenge

3. Pepsi Challenge

4. What is segmentation? Learning Objectives
LO2: Explain different types of segmentation
LO1: Define segmentation
LO3: Analyse the value of segmentation
LO4: Define what is meant by a market
What is segmentation?

5. What is meant by a market?
Mass market is where there is a very large number of sales of a product
Advantages
Large sales
Economies of scale
Risk spread over a large product range
Opportunities for growth with large potential sales
Disadvantages
Competition
High Costs of advertising
Standardised products produced so may not meet needs of customer

6. What is meant by a market? Cont
Niche market is a small, usually specialised segment of a much larger market
Advantages
Small business can sell to niche markets as large firms focus on mass market
Can focus on needs of individual customer unlike mass market
Disadvantages
Small and limited amount of sales
Often just one product so if this fails often the business fails

7. Market Segmentation
Most markets can be subdivided in several different ways
Market segmentation is the acknowledgement by companies that customers are not all the same
The market can be broken down into smaller sections in which customers share common characteristics

8. How do you do it? Research different types of customers
See if they have common tastes/habits
Identify the segment you wish to focus on, then conduct qualitative research
Decide a product designed not for the whole market but for a specific segment

9. This is tricky but go for it!
Task
In your book think of one product
Explain how the market for this product is segmented into different sub categories
This is tricky but go for it!

10. Housekeeping
Travel
Split into customers with similar interests – not just male/female or age
Gardening
Weddings
Arts and Crafts
Hair

11. How do we segment markets?
Socio-economic group
Age
Region/Location
Gender
Use of product
By lifetstyle
Task: In your books write a definition for each of these types of market segmentation
Extension: Can you think of an example for each type of segmentation to demonstrate how it works?

12. What is the value of segmentation?
Improved sales volume
Increased prices
Increased diversification, therefore less risk and more security
Companies trying to target the younger market to boost sales
Upmarket UK holiday from Butlins, designed the right product and now are used 97% of the year and made £20m in 2014
Made a mass product which was fashionable and cost $68 in October 2007, but by November 2008 they cost $1.50 as they went from hot to what?

13. Present your thoughts
Each group is given a question. You have 5 mins to discuss your answer then you must present it to the rest of the group.
Explain the benefits of producing a large range of cars aimed at different market segments?
Explain why segmenting the market for sports shoes is important and give examples of 3 different segments?
Why may segmentation by age become more important in the future?
Why might it be necessary to use qualitative research before deciding finally on the right positioning for a new biscuit brand?

14. Galaxy Chocolate at 15p head for India
Read the case and select two questions to answer (at least one from the bottom row)
Define market segmentation and explain how it is used in the chocolate industry (4)
Explain two possible reasons why Mars wants to build a market share in India (5)
From the text, analyse how well Mars has used ‘segmentation, targeting and positioning’ in launching Mars Premium chocolate in India (9)
To what extent do you think the pricing strategy for Galaxy is likely to prove successful for Mars? (14)