WAEC Commerce 2012 Theory — Question 6

Model answer

(a) Market segmentation: This is a deliberate act on the part of seller to divide his customers into different set based on some criteria best chosen by him. (b) Factors that influence market segmentation: - nature of the goods being sold: if the goods can be transferred from one place to another, segmentation of the market will be a bad idea. - distance between the two markets: there must be reasonable distance between the two market which the seller intends to segmentise. - income of the buyers: also, the income of the buyers also must be considered before segmenting market, if not, the segmentation will just be a futile effort. - cultural difference of the buyers: also, cultural differences can be a motivating factor to segregate market. - law that regulate the sector. - finally, buyers interest also can influence market segmentation. (c) Advantages of advertising: - through advertising, the sales level of the firm can be improved - it serves as means to sensitise the public about the product - it is used to create awareness about the product - it serves as a means of generating feedback about the product of the organisation - advertisement help to create employment.