How do businesses divide a market, choose who to target, and position their product?
Market segmentation and its bases (demographic, geographic, psychographic and behavioural); targeting strategies; product positioning and perceptual maps; niche and mass marketing; and the benefits and drawbacks of segmenting a market.
A focused answer to the Eduqas A-Level Business statement on segmentation, targeting and positioning. Covers the bases of segmentation, targeting strategies, product positioning and perceptual maps, niche versus mass marketing, and the benefits and drawbacks of segmenting a market.
Reviewed by: AI editorial process; not yet individually human-reviewed
Have a quick question? Jump to the Q&A page
Jump to a section
What this theme is asking
Eduqas expects you to know how a market is divided into segments, on what bases, how a firm chooses which segment(s) to target, how it positions its product against rivals, and the difference between niche and mass marketing. This is the bridge from understanding the market to designing a marketing mix that fits a chosen group.
What segmentation is and why firms do it
Segmenting lets a firm tailor the product, price, promotion and place to each group, target its limited budget where returns are highest, spot gaps and opportunities, and build loyalty by meeting needs precisely.
The bases of segmentation
Targeting
Once a market is segmented, the firm chooses a targeting approach:
- Undifferentiated (mass) targeting: one offer for the whole market, ignoring segment differences (suits standardised products and large firms).
- Differentiated targeting: several offers for several segments (a car maker selling small, family and luxury models).
- Concentrated (niche) targeting: one offer for one small segment, where the firm specialises.
The choice depends on the firm's size and resources, the product, and how different the segments' needs are.
Positioning and perceptual maps
A positioning map helps a firm see crowded areas (intense competition) and empty areas (potential gaps), and decide where it wants its brand to sit. A firm aiming for a premium image positions itself high on price and quality; a value brand positions low on price.
Niche versus mass marketing
Niche marketing targets a small, specialised segment. It lets a firm specialise, build strong loyalty, charge a premium and avoid head-on competition with large rivals, which is why it suits small firms. But the market is small, limiting growth, and the firm is vulnerable if the niche shrinks or a big competitor enters.
Mass marketing targets a large, broad market with a standardised product. It exploits economies of scale and high volume, but margins are usually lower and competition fierce, and it suits large firms with the capacity to serve a wide market.
Examples in context
A breakfast-cereal maker segments demographically and behaviourally, with sugary cartoon-branded cereals for children and high-fibre cereals for health-focused adults. A small label uses concentrated niche targeting for sustainable activewear, charging a premium to loyal buyers. A supermarket's own-brand range uses mass marketing across the whole market. A new cafe uses a positioning map to find a high-quality, mid-price gap.
Try this
Q1. State two bases on which a market can be segmented. [2 marks]
- Cue. Any two of: demographic, geographic, psychographic, behavioural.
Q2. Explain one benefit to a small firm of targeting a niche market. [3 marks]
- Cue. It can specialise and tailor its offer precisely, building strong loyalty and charging a premium while avoiding direct competition with large rivals.
Exam-style practice questions
Practice questions written in the style of WJEC Eduqas exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
Eduqas 20204 marksExplain two ways a business could segment the market for breakfast cereals. (4)Show worked answer →
A short-answer question rewarding two bases of segmentation, each applied to cereals.
Demographic segmentation by age: cereals aimed at children (colourful, sweet, with cartoon characters) versus those aimed at adults (high-fibre, healthy), so the product and promotion match the group.
Behavioural or lifestyle segmentation by health-consciousness: cereals for health-focused buyers (low sugar, high protein) versus indulgent treats, so the firm can position each product to its segment.
Markers reward two valid bases (others: income, gender, geographic region), each clearly applied to cereals. A bare list of bases with no application limits the marks.
Eduqas 20228 marksAnalyse the benefits to a small clothing business of targeting a niche market rather than the mass market. (8)Show worked answer →
A levels-of-response analysis. Benefits of a niche: the firm can specialise and tailor its product and marketing precisely to a small group, building strong loyalty and often charging a premium; it faces less competition from large rivals and needs less capital than serving a mass market; a small clothing business can compete where it could not against high-street giants. Develop a chain: a focused niche (sustainable activewear) lets the firm command higher prices and loyal repeat custom, raising margins despite low volume. Balanced analysis notes the risks (small market limits growth, vulnerable if the niche shrinks or a big rival enters), but the question asks for benefits, so lead with the focused, less-competitive, premium-margin advantages. The top band develops reasoning rather than listing.
Related dot points
- The nature and purpose of marketing; marketing objectives such as sales, market share, growth and brand; the relationship between marketing and corporate objectives; market orientation versus product orientation; and the role of marketing in adding value.
A focused answer to the Eduqas A-Level Business statement on marketing objectives. Covers the nature and purpose of marketing, marketing objectives (sales, market share, growth, brand), the link to corporate objectives, market versus product orientation, and the role of marketing in adding value.
- The marketing mix (product, price, promotion and place) and the extended mix; the product life cycle and extension strategies; the Boston Matrix; channels of distribution; promotional methods; and the need for an integrated, coordinated mix.
A focused answer to the Eduqas A-Level Business statement on the marketing mix. Covers product, price, promotion and place and the extended mix, the product life cycle and extension strategies, the Boston Matrix, distribution channels, promotional methods, and the need for an integrated mix.
- Pricing strategies including cost-plus, price skimming, penetration, competitive, psychological, predatory and dynamic pricing; the factors influencing price; and the link between price, demand and the rest of the marketing mix.
A focused answer to the Eduqas A-Level Business statement on pricing strategies. Covers cost-plus, skimming, penetration, competitive, psychological, predatory and dynamic pricing, the factors influencing price, and how price links to demand and the rest of the marketing mix, with a worked cost-plus calculation.
- The meaning and types of markets; market size, share and growth; primary and secondary market research; quantitative and qualitative data; sampling and its reliability; and the value and limitations of market research.
A focused answer to the Eduqas A-Level Business statement on markets and market research. Covers types of markets, market size, share and growth, primary and secondary research, quantitative and qualitative data, sampling and reliability, and the value and limitations of market research, with worked calculations of share and growth.
- Price and income elasticity of demand and their calculation and use; the distinction between elastic and inelastic demand; the implications for pricing and revenue; marketing strategy; and digital and e-commerce marketing.
A focused answer to the Eduqas A-Level Business statement on elasticity and marketing strategy. Covers price and income elasticity of demand, calculation and interpretation, elastic versus inelastic demand and the effect on revenue, marketing strategy, and digital and e-commerce marketing, with worked elasticity calculations.
Sources & how we know this
- Eduqas A Level Business Specification (A510) — Eduqas (2015)