Casualty Actuarial Society (CAS) Practice Exam

Behavioristic segmentation divides the market by what criteria?

1. Geographic units

2. Income levels

3. Purchase behavior

4. Age and gender

The correct answer is: Purchase behavior

Behavioristic segmentation focuses on dividing the market based on consumer behaviors related to purchasing products or services. This approach takes into account various aspects of consumer interaction with products, such as their buying habits, brand loyalty, usage rates, and benefits sought. By concentrating on these behaviors, marketers can create targeted strategies that cater specifically to the preferences and needs of distinct groups within the market. This method contrasts with other segmentation criteria, which may include geographic units—addressing where consumers live; income levels—focusing on consumers' financial capabilities; or demographic factors like age and gender. While these other methods classify consumers based on external, static characteristics, behavioristic segmentation delves deeper into the motivations behind consumer actions and choices, allowing for more precise and effective marketing initiatives.