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How does a business divide up its customers and decide who to aim at?

Market segmentation and targeting: the meaning of market segmentation, the main bases for segmenting a market, the benefits of targeting a market segment, and the role of a target market.

A focused answer to the Eduqas GCSE Business C510 content on market segmentation and targeting, covering what segmentation means, the main bases for segmenting a market, the benefits of targeting a segment, and the role of a target market.

Generated by Claude Opus 4.811 min answerUpdated 2026-06-02

Reviewed by: AI editorial process; not yet individually human-reviewed

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Quick answer

Market segmentation is dividing a market into groups of customers who share similar characteristics, so a business can aim its product and marketing at the groups most likely to buy. Markets can be segmented in several ways: by age, gender, income, location (geographic), lifestyle and interests, social class, and how often or why customers buy. A target market is the specific segment (or segments) a business chooses to aim at. Targeting a segment brings real benefits: the business can design a product, price, promotion and place that match that group's needs precisely, so it appeals to them more strongly than a general offer that tries to please everyone; it can focus its marketing on the right people through the right channels, spending its budget efficiently; and it can build loyalty by serving its chosen customers well. The trade-off is that focusing on one segment means a smaller potential market, so a business must choose a segment large and profitable enough to be worth targeting.

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What this topic is asking
What market segmentation is
The main bases for segmenting a market
The target market
The benefits of targeting a segment
Try this

What this topic is asking

Eduqas C510 wants you to understand market segmentation and targeting: what segmentation means, the main bases for segmenting a market, the benefits of targeting a segment, and the role of a target market. The exam often asks whether a business should target a specific group or appeal to everyone, so you must analyse the gains from focusing.

What market segmentation is

Different customers want different things, so treating the whole market as one is rarely effective. Segmentation lets a business focus on the customers it can serve best.

The main bases for segmenting a market

A business often combines bases, for example "young, higher-income, city-based" customers, to define its segment precisely.

The target market

Choosing a target market shapes every marketing decision: the product features, the price level, the style of promotion, and where the product is sold are all set to suit that group.

The benefits of targeting a segment

The trade-off is that focusing on one segment means a smaller potential market, so the segment must be large and profitable enough to be worth targeting. A business with the resources may target several segments with different offers.

Sizing a target segment

Set out the figures

A town has $40{,}000$ adults. A gym targets the segment "adults aged 25 to 40 with a higher income", which it estimates is $25\%$ of the adult population. It expects to attract $8\%$ of that segment as members, each paying $40$ a month.

Size of the target segment

\text{Target segment} = 0.25 \times 40{,}000 = 10{,}000 \text{ people}.

Expected members

\text{Members} = 0.08 \times 10{,}000 = 800.

Expected monthly membership revenue

\text{Revenue} = 800 \times 40 = 32{,}000 \text{ a month}.

Interpret the result

By segmenting and targeting, the gym can estimate that its chosen segment is $10{,}000$ people, of whom it might win $800$ members, worth $32{,}000$ a month. This shows the value of targeting: rather than vaguely "appealing to everyone", the gym can size its market, plan its facilities and marketing around that specific group, and forecast its revenue. It also reveals the trade-off, by focusing on this segment the gym ignores the other $30{,}000$ adults, so the segment must be big and willing enough to pay to make the focus worthwhile, which the numbers help it judge.

Try this

Q1. State three bases a business could use to segment a market. [3 marks]

Cue. Age, gender, income, location, lifestyle, social class, usage.

Q2. A segment is $30\%$ of a $50{,}000$ market. How many people are in the segment? [2 marks]

Cue. $0.30 \times 50{,}000 = 15{,}000$ .

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 20192 marksState two ways a business could segment its market. (Component 1)

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A 2-mark AO1 recall question, one mark per valid basis. Acceptable bases for segmenting a market include: age, gender, income, location (geographic), lifestyle or interests, social class, family situation, and how often customers buy or use the product. Markers want a genuine basis for dividing customers into groups; a vague answer such as "different people" would not score. Naming the basis (such as age or income) is enough for the mark.

Eduqas 20216 marksA new gym is deciding whether to target a specific market segment or appeal to everyone. Analyse the benefits to the gym of targeting a particular segment. (Component 1)

Show worked answer →

A 6-mark Analyse needing developed chains applied to the gym. Benefit one (a tailored offer that attracts the segment): by targeting a clear segment, say young professionals or older members wanting low-impact classes, the gym can design facilities, classes, opening hours and pricing that match that group's needs precisely, so it appeals more strongly to them than a general gym trying to please everyone, winning their custom and loyalty. Benefit two (focused, cheaper marketing): targeting a segment lets the gym aim its marketing at the right people through the right channels (social media for young professionals, local press for older members), so its limited marketing budget is spent efficiently and is more likely to reach genuine prospects. The chain to credit links targeting to a better-matched offer and more efficient marketing. Markers reward two developed benefits applied to the gym, not a generic list of segmentation bases.

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Sources & how we know this

WJEC Eduqas GCSE Business specification (C510) — WJEC Eduqas (2017)