Cambridge O Level Business Studies · Syllabus 7115 · Marketing
Market Segmentation
What is Market Segmentation?
The process of dividing a market into distinct groups of customers who share similar characteristics or needs, so that a business can design and communicate an offer aimed at one group rather than at the market as a whole. Common bases are age, socio-economic grouping or income, location, gender, and lifestyle or interests.
This definition is part of the Marketing chapter in Cambridge O Level Business Studies.
Market Segmentation in context
The marketing mix is the combination of product, price, place and promotion that a business decides together, because each element shapes what customers expect of the others and any inconsistency weakens the whole offer. Market segmentation splits a market into groups with similar needs, letting a business choose between a small specialised niche and a broad mass market rather than trying to serve everyone at once. Market research, whether primary data collected for this decision or secondary data that already exists, reduces the risk in these choices without ever removing it, because a sample is not the same as the whole population.