2.3 Market Segmentation Practice Questions

Text 2 — Ladle & Loam Ltd

Ladle & Loam Ltd is a recipe-box delivery business set up in 2019 by entrepreneur Martina Ochoa. Customers order online and a box of fresh ingredients, together with recipe cards, is delivered to their home. The business delivers to three cities in the north of England and employs 24 people.

Martina uses market segmentation. The boxes are grouped into three ranges: 'Family Favourites', aimed at busy families; 'Lean & Green', aimed at health-focused single customers; and 'Two for Dinner', aimed at couples aged over 60. Boxes are priced between £14 and £38 per box.

In 2024 Martina spent £48,000 on advertising, most of it on social media.

Martina now plans to launch a new range of desserts in 2026.

Table 2 Sales revenue of Ladle & Loam Ltd by range (2023 and 2024)

Range	2023 revenue (£)	2024 revenue (£)
Family Favourites	240 000	309 000
Lean & Green	186 000	201 000
Two for Dinner	94 000	130 000
Total	520 000	640 000

Fellside Clothing Ltd

Fellside Clothing Ltd is a private limited company based in the north of England. It makes waterproof walking jackets, which it sells online and through its three shops in towns close to a national park. A Fellside jacket is priced at £180. There are many businesses selling outdoor clothing and some sell waterproof jackets for under £60.

Market research carried out by Fellside shows that most of its customers are aged 55 and over, are retired and have a high disposable income. They walk at weekends and told Fellside that they want a jacket that will last for many years rather than a cheap fashion item.

Fellside advertises in a walking magazine that is read by 40 000 people each month and it sponsors a walking festival held near its shops each spring. It is now designing a lighter jacket with larger pockets and easier zips, features that customers in this group said they wanted.

Knockwell Studio

Knockwell Studio is a fitness business in Stoke-on-Trent owned by Dan Mercer. Dan rents a church hall on three evenings a week and runs boxing-fitness classes. A single class costs £6 and a monthly pass costs £30. He employs two part-time instructors.

When members join, Dan asks for their age and their reason for joining. He uses this information to divide his 300 members into the age groups shown in Table 1. He has found that members aged 16–25 mostly join to train with friends, while members aged over 40 are more likely to say they want to improve their general fitness. Most members aged 16–40 work or study during the day.

Dan is planning a new daytime class and must decide which group of customers to aim it at. He pays the hall rent and an instructor for each class, however many people attend.

Table 1: Knockwell Studio members by age group

Age group	Number of members
16–25	96
26–40	120
41–55	54
Over 55	30