Business Studies Multiple Choice Question – 11 August 2021

Footwear retailer Lucy Shoes sells branded leisure, sport and fashion shoes for men, women and children. 

What is the most likely reason for Lucy Shoes to use market segmentation is to?

Select ONE answer:

1. limit the range of products being offered
2. reduce the need for market research
3. more effectively target its market
4. avoid the need to advertise

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct – market segmentation increases the range of products Lucy Shoes will need to offer to meet the needs of the different segments it caters for.
2. Not correct – Lucy Shoes will still need to do market research into the changing tastes and preferences of its market segments.
3. Correct – Definition of market segmentation: Categorises potential customers according to characteristics based on gender, age, income, etc. By segmenting the market Lucy Shoes can match its shoes to consumer wants/needs more accurately. This means it can potentially increase sales and profitability/reduce the threat of direct competition.
4. Not correct – Lucy Shoes still needs to advertise in order to increase awareness of its products to different segments.

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