WAEC Commerce 2013 Theory — Question 8

Model answer

(a) Market segmentation is a deliberate act on the part of seller to divide his customers into different segments best suited/best chosen by him. (b) Factors to be considered in segmenting a market: 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 markets 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.