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What is an example of market segmentation? (A) A bank offering reward points to loyal customers (B) A breakfast cereal manufacturer using advertising to target specific age groups (C) A sporting goods store dividing the floor space into sections to assist customer flow (D) A biscuit manufacturer repackaging its product as a result of increased market competition - HSC - SSCE Business Studies - Question 5 - 2007 - Paper 1
Question 5
What is an example of market segmentation? (A) A bank offering reward points to loyal customers (B) A breakfast cereal manufacturer using advertising to target spec... show full transcript
Worked Solution & Example Answer:What is an example of market segmentation? (A) A bank offering reward points to loyal customers (B) A breakfast cereal manufacturer using advertising to target specific age groups (C) A sporting goods store dividing the floor space into sections to assist customer flow (D) A biscuit manufacturer repackaging its product as a result of increased market competition - HSC - SSCE Business Studies - Question 5 - 2007 - Paper 1
Step 1
What is an example of market segmentation?
Answer
Market segmentation involves dividing a broad consumer or business market into sub-groups of consumers based on shared characteristics. Among the given options:
- Option A focuses on customer loyalty but does not classify consumers into segments based on characteristics.
- Option B demonstrates market segmentation as the cereal manufacturer targets specific age groups, effectively dividing the market to reach different needs and preferences.
- Option C is about store layout, which does not constitute market segmentation.
- Option D discusses repackaging in response to competition, lacking the specific segmentation criteria.
Therefore, Option B is the correct answer as it directly relates to market segmentation.