The term 'market segmentation' refers to?

Market segmentation refers to the process of dividing a broader market into smaller, distinct groups of buyers who have diverse needs, characteristics, or behaviors. This approach allows marketers to tailor their strategies to fit the specific preferences of each segment, leading to more effective marketing efforts and better customer satisfaction. By identifying and understanding these segments, businesses can create targeted marketing campaigns, develop products that meet the specific needs of particular groups, and ultimately enhance their competitive edge in the market.

The other options presented do not accurately capture the essence of market segmentation. Promoting a product across a wide audience implies a one-size-fits-all approach, which contradicts the idea of tailoring strategies to different consumer groups. Evaluating competitors' market share focuses on competitive analysis rather than the grouping of consumers based on shared characteristics. Targeting only high-income consumers represents a narrow and specific approach that doesn’t encompass the broader practice of segmenting the market into various groups, which may include low, middle, and high-income consumers, alongside other demographic and psychographic factors.