What does 'segmentation' in marketing refer to?

Segmentation in marketing refers to the practice of dividing a broad market into sub-groups based on shared characteristics, which includes demographic, geographic, psychographic, and behavioral factors. This approach allows companies to tailor their marketing efforts and product offerings to meet the specific needs and preferences of different consumer groups, resulting in more effective and targeted marketing strategies. By understanding the unique attributes and behaviors of each segment, marketers can develop more relevant messaging and create products that resonate with various audiences, ultimately leading to increased customer satisfaction and loyalty.

This focus on shared characteristics helps to identify distinct groups within a larger market, allowing businesses to better address the diverse demands of their potential customers and optimizing their marketing strategies accordingly.