The market segmentation strategy known as frequency marketing focuses on:

• A. setting prices based on consumers' willingness to pay
• B. rewarding customers for repeat purchases to increase consumer loyalty
• C. offering discounts to attract new customers only
• D. dividing the market according to demographic characteristics

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of market segmentation, which involves dividing a broad consumer or business market into sub-groups based on shared characteristics.
2. Step 2: Recognize that frequency marketing is a specific type of market segmentation strategy that targets customers based on their purchase behavior, particularly how often they buy.
3. Step 3: Identify that frequency marketing aims to reward customers for repeat purchases, encouraging loyalty and increasing the likelihood of continued buying.
4. Step 4: Differentiate frequency marketing from other strategies such as setting prices based on willingness to pay, offering discounts only to new customers, or segmenting by demographic characteristics.
5. Step 5: Conclude that frequency marketing focuses on rewarding repeat customers to build consumer loyalty, rather than just attracting new customers or segmenting by demographics.