Answer to Question #271990 in Marketing for Malefa

Question

Lorraine has received a lump sum of R500 000.00 from her retirement fund. She intends to use these funds to start a student accommodation business. In order to start this business, Lorraine would need approximately R1 million, funds are needed for building the students accommodation apartments and to register with various regulatory bodies. She has to source additional funding in order to realise this dream. In the business plan, Lorraine has outlined the following: • Accommodation will be offered ONLY to students in Cape Town, Johannesburg, Mpumalanga and Polokwane. • ONLY females will be approved to reside in these houses, between the age of 18 - 35. • Marketing of the business will be done on community Radio stations only at the four mentioned cities. • It is going to be a family business, Friends and relatives are in support of the idea but are not able to support the business financially. Q.4.1 Identify the TWO basis or Criteria for segmentation referred to in the above scenario. Justify your choice.

Answer 1

Demographic segmentation - only females between the ages of 18 to 35 years will be housed.

Geographical segmentation - only students from the four regions that is Polokwane, Mpumalanga, Capetown and Johannesburg will be served.