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What is Market Segmentation?

Market Segmentation refers to the process of dividing the clientele of an organization into different groups based on their needs and buying behavior. This division allows organizations to target specific groups efficiently and provide relevant products and services.

Features of Market Segmentation:

1. Market Segmentation helps recognize the potential customer base that organizations can target.
2. Efficient communication channels should be used to make market segmentation accessible to various people.
3. Market segmentation should be reliable and stable over a longer period.
4. Market segmentation should be substantial, providing meaningful insights.

Why should the customers in a market be categorized into segments?

Categorizing customers into segments offers several benefits:

1. Understanding the needs and preferences of consumers becomes easier.
2. Organizations can design effective strategies based on segmentation findings.
3. Customized products and services can be created and provided to cater to specific market segments.
4. Unfruitful market spending can be avoided by targeting profitable segments.
5. Segmentation facilitates product development and innovation.

Methods of Market Segmentation:

1. Geographic: Segmentation based on factors such as location, region, and development rate.
2. Psychographic: Segmentation based on lifestyle, preferences, attitudes, opinions, values, and social status.
3. Business Market: Segmentation based on variables like business size, buying approach, and targeted product usage.
4. Behavioral: Segmentation based on consumer behavior, attitudes, choices, knowledge, response, and product usage.
5. Demographic: Segmentation based on factors like location, income group, gender, age, religion, social class, nationality, race, and ethnicity.

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