Unit 3
P5; explain how and why groups of customers are targeted for selected
products.
For P5, learners should explain why the different types of target groups are
chosen for different products or services. This should include products for both
consumer and business to business markets and different methods of
segmenting the market. Six different target groups will be sufficient to achieve
the criterion.
Customers from Consumers
A Customer can be an individual or organisation that purchases a good or
service from another individual or organisation. For e.g. Jake purchases a
laptop from Argos.
A Consumer can be an individual or organisation that consumes a good or
service – for e.g. Jake is eating crisps.
It is important to understand who has influence over purchasing decisions
made by customers, this is because it will help a business market its product to
its advantage as they can exploit these factors in order to gain more sales. It is
important for businesses to understand their target audience’s purchasing
behaviour as they can manipulate the market – for e.g. if a business’s target
market is children, parents would be under the influence of children to
purchase the product.
Market Segmentation
Market Segmentation is when the market is split into clear segments of which
consist similar needs and wants within the segment. Market segmentation is a
technique used by businesses to target products specifically at its target
market, this allows them to gain more awareness and increase revenue.
Businesses segment their market because different customers will receive
more benefits from being segmented, they will be more aware of the product
as businesses would advertise their products based on what their target
audience views more – e.g. tv adverts for kids or newspapers for adults.
When markets are segmented, they are usually segmented into the following
groups; Geographic, Demographic, Psychographic and Lifestyle.
Market Definition
P5; explain how and why groups of customers are targeted for selected
products.
For P5, learners should explain why the different types of target groups are
chosen for different products or services. This should include products for both
consumer and business to business markets and different methods of
segmenting the market. Six different target groups will be sufficient to achieve
the criterion.
Customers from Consumers
A Customer can be an individual or organisation that purchases a good or
service from another individual or organisation. For e.g. Jake purchases a
laptop from Argos.
A Consumer can be an individual or organisation that consumes a good or
service – for e.g. Jake is eating crisps.
It is important to understand who has influence over purchasing decisions
made by customers, this is because it will help a business market its product to
its advantage as they can exploit these factors in order to gain more sales. It is
important for businesses to understand their target audience’s purchasing
behaviour as they can manipulate the market – for e.g. if a business’s target
market is children, parents would be under the influence of children to
purchase the product.
Market Segmentation
Market Segmentation is when the market is split into clear segments of which
consist similar needs and wants within the segment. Market segmentation is a
technique used by businesses to target products specifically at its target
market, this allows them to gain more awareness and increase revenue.
Businesses segment their market because different customers will receive
more benefits from being segmented, they will be more aware of the product
as businesses would advertise their products based on what their target
audience views more – e.g. tv adverts for kids or newspapers for adults.
When markets are segmented, they are usually segmented into the following
groups; Geographic, Demographic, Psychographic and Lifestyle.
Market Definition
