What is market segmentation?

Market segmentation is a technique used by businesses to divide a broad target market into smaller, more defined groups of consumers. This is done based on shared characteristics such as demographics, interests, behaviors, or needs. By identifying and focusing on these specific segments, companies can tailor their marketing strategies, products, and services to meet the unique demands and preferences of each group, leading to more effective communication and potentially higher sales.

This approach allows businesses to allocate resources more efficiently, create targeted promotions, and develop products that resonate with the specific desires of chosen segments. As a result, businesses can enjoy improved customer satisfaction and increased loyalty. The correct answer highlights the focus on targeting specific portions of the market, which is the essence of market segmentation.