What Is Market Segmentation?
Market segmentation is the selection of groups of people who will be most receptive to a product. The most common method of segmenting includes demographic variables such as age, race, sex, income, occupation, education, geographic location, household status etc. Much of the segmentation will involve a combination of these variables and no matter how the segments are defined they are characterised by considerable change over time.
The Main Purpose of Segmentation
The main purpose of segmenting a market is to allow a market or sales program to focus on the prospects that are most likely to purchase the products or services on offer. If it is done properly it ensures that the best return for the marketing expense is outlaid. There are definite differences and these depend on whether you are selling to individual consumers or to business customers.
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