Analyse the benefits to a business of market segmentation.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2022). The mark or mark type is shown in brackets.

1. [8] (a) Understanding of market segmentation; Reference to market segmentation in a business context; The identification of sub-groups in a market – customers have similar characteristics, which can be targeted – the division of a diverse market; Marketing plans can be tailored to specific segments – specialisation can be achieved in product distribution, promotion and pricing; Marketing efforts are more efficient – they are made more appropriate to specific customer segments that have been well defined; Gaps/opportunities in a market can be identified and exploited; Advantage to small firms that are not able to compete in the whole market; More focused marketing can increase sales and profits; Identify more opportunities for growth; Retain more customers by a marketing focus that prevents customers switching to competitors. Accept any other valid response
2. [12] (b) Understanding of marketing; Understanding of car manufacturing/sales; Reference to marketing by a car manufacturing/sales business; The role and activities of marketing in business; Marketing objectives that underpin marketing activities – increase market share - strengthen a brand – establish competitive advantage; The importance of marketing objectives for successful achievement of corporate objectives; Analysis of specific marketing activities/methods – market research, marketing mix tactics, marketing strategies; The links between marketing activities and the activities of other business departments, such as operations, finance and HR; Marketing objectives specific to car manufacturing may be analysed - a marketing focus on taking advantage of an expanding market for fuel efficient cars (electric); A judgement may be made using the following arguments: Discussion of whether other business activities might be as important, or more important, than marketing – such as product design, research and development, finance for capital investment, HR for relevant manufacturing skills; Supported judgemental comment on the relative importance of marketing. Accept any other valid response