Market Segmentation refers to the process of dividing a broad consumer or business market into smaller, more homogeneous groups of consumers or organizations with similar needs, preferences, or characteristics. This strategic approach allows businesses to tailor their products, services, and marketing efforts to meet the specific demands of each segment more effectively.
By identifying and targeting these distinct segments, companies can optimize their marketing strategies, enhance customer satisfaction, and improve their competitive advantage. Segmentation can be based on various criteria, including demographic factors (such as age, gender, income), geographic location, psychographic traits (such as lifestyle or personality), and behavioral factors (such as purchasing behavior or brand loyalty).