What does "market segmentation" involve?

Market segmentation involves dividing a broad target market into subsets of consumers who share common needs, preferences, or characteristics. This process is essential for businesses to identify and understand different groups within the overall market. By segmenting, companies can tailor their marketing strategies and product offerings to meet the specific needs of each segment more effectively, allowing for a more personalized approach that can enhance customer satisfaction and loyalty.

By understanding the unique attributes and behaviors of different segments, companies can allocate their resources better and engage with consumers in a manner that resonates with them. This can lead to improved marketing outcomes, as messages and products can be aligned more closely with what different groups are seeking. Additionally, segmentation can help in identifying new market opportunities where underserved groups may exist.