Business Studies Multiple Choice Question – 17 January 2022

Alex Sportswear produce a range of footwear for men, women, children, different sports and other leisure activities.

The most likely reason for Alex to use market segmentation is to …. ?

Select ONE answer:

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

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 1

1. Correct – Market segmentation is the process of dividing a market up into different groups of customers. In a segmented market, customers are more likely to buy products that are made to match their needs, thus increasing Alex’s sales. This increases profitability and reduces the threat of direct competition.
2. Not correct – because Alex will still need to carry out market research into what the different market segments would require
3. Not correct – because Alex will still need to advertise in order to increase awareness of its products to different segments
4. Not correct – because market segmentation increases the range of products as the needs of different segments are identified and provided for

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