It is important to understand that there are several perfect ...

[jon_i]

It is important to understand that there are several perfect business models.
 
  Indicate whether the statement is true or false

Question 2

What is the purpose of market segmentation? How are markets typically segmented? Can a company segment its market on more than one dimension?
 
  What will be an ideal response?

[meow1234]

Answer to Question 1

FALSE

Answer to Question 2

The first step in selecting a target market is to study the industry in which the firm intends to compete and determine the different potential niche or target markets in that industry. This process is called market segmentation and is important because a new firm typically only has enough resources to target one market segment, at least initially. Markets can be segmented in many ways, such as by geography (city, state, country), demographic variables (age, gender, family size, income), psychographic variables (personality, lifestyle, values), behavioral variables (benefits sought, product usage rate, brand loyalty) and product type (varies by product). Sometimes a firm segments its market on more than one dimension to drill down to a specific market that the firm thinks it is uniquely capable of serving. For example, in its market segmentation, GreatCall, the cell phone service provider for older people, probably segmented the cell phone market by age and by benefits sought.