Observation

The candidates who attempted this question performed poorly as they could not provide the required responses to the various parts of the question.  The required responses to the various parts of the question are as follows:

(a)        Market Segmentation is the process of dividing a market made up of customers with different needs, wants and characteristics into distinct groups of similar characteristics in order to satisfy their needs effectively with different marketing efforts.  Market segment, on the other hand, is a group of consumers who share similar characteristics and also respond similarly to company’s marketing effort.

(b)        Methods of Segmenting a Market

-           Geographic Segmentation:
This method organizes customers into groups on the basis of where they live. For instance, a market could be grouped based on region, states, city, and neighbourhoods.  The products are designed in a manner that they would appeal to the customers based on their different locations.

-           Demographic Segmentation: 
This involves grouping the broad market based on such demographic characteristics like income, occupation, age, gender and education.

-           Psychographic Segmentation: 
It involves dividing the market segments based on different personality traits like value, attitude, interest and life style of consumers.

-           Benefit Sought Segmentation:
This involves grouping the market based on the benefits the consumers seek. 

-           Behavioural Segmentation:
This involves dividing the market based on differences in the consumption behavior of consumers taking into account patterns of buying, usage, spending time and money.